The Month That Was……February 2019

February 2019 had the ‘whiff’ of a sour tasting canapé prior to the 10 course tasting menu that March 2019 promises to be.

 

Nothing meaty has been achieved politically or economically other than increasing the speed and velocity of the whirlwind engulfing the UK.

 

So sad and so avoidable……we deserve better. Don’t we?

 

Here’s how February 2019 will be remembered……

Political Accident

We are around 30 days from Brexit and the threat of a huge political accident looks increasingly likely. There is a standoff in Westminster that ensures that a majority on anything semi-important can’t be achieved by Theresa May. There is a standoff with the EU who simply won’t negotiate with Theresa May as they know it is pointless as she can’t get a majority on anything other than the current draft agreement is worthless.

 

Ah yes, UK politics at its best!

 

Perhaps the deadline of 29 March 2019 is a good thing in that it will bring everything to a head once and for all……bringing to an end what resembles the embarrassing flirting of a 14 year old at their first disco. Awkward. Very awkward. 

 

On the other hand, we could crash out with no deal having not been able to avoid the political accident.

 

Expect lots of political speak to dominate our media channels:

 

“Let me be clear”  (= lying)

 

“Full and frank / robust discussion”  (= we lied to each other)

 

“I will achieve what I have said I will do”  (= no chance, I am lying to you)

 

Hold on to your hats……the 12^th, 13^th and 14^th of March will be huge days in our modern history.

 

 

Unintended Consequence #1

One of the unintended consequences of the delays to Brexit negotiations is the impact on the UK economy.

 

Factually, the UK economy expanded at its slowest annual rate in six years in 2018 after a sharp contraction in December (1.4%).

 

The Bank of England now forecasts that 2019 will be the worst year for UK economic growth since 2009.

 

I’m not quite sure this was the dream we were sold in the run up to the Brexit referendum were we?

 

A whiff of Hell from the Bank of England? Maybe. (see February’s Biggest Loser……Option 1)

 

 

 

Unintended Consequence #2

Sunderland was a huge voter in favour of leaving the EU……which makes Nissan’s decision to choose Japan over the (originally chosen) Sunderland plant to build the new X-Trail car a bitter pill to swallow.

 

In a letter to workers, Nissan said continued Brexit uncertainty is not helping the firm to "plan for the future". There are not expected to be job losses among Nissan’s workforce of about 7,000 but the decision will curtail the plant’s expansion.

 

Ministers are now considering withdrawing a £60 million package of support for Nissan after it broke a pledge to build the vehicles in the UK.

 

Yet more unintended consequences of the Brexit uncertainty.

 

 

Unintended Consequence #3

Politicians have spent in excess of £100 million on Brexit consultant contracts to aid negotiations. With the Government not having sufficient resources, they have had to agree contracts worth £104 million for outside help on Brexit.

 

Six companies have each received a contract worth £10 million for ‘Cabinet Office Consultancy Support for EU Exit’. Companies with the most valuable Brexit contracts include Boston Consulting Group, PWC and Deloitte.

 

And just for clarity……the ‘eye watering’ £104 million comes from us taxpayers. Brilliant.

 

Tis The Season To Be Banking

It’s that time of year again. Britain’s bank reporting season is here. Among the big four, Royal Bank of Scotland (RBS) kicked off with HSBC, Lloyds and Barclays to follow. The sceptics say that bank numbers are so opaque, complex and prone to flattering assumptions as to be virtually meaningless. They are, however, the only indicator we have on the workings of the institutions at the heart of the British economy (rather than Bank of England best guesstimates).

 

RBS reported profits of £1.62 billion for 2018, more than double it made in 2017.  As we taxpayers are a 62% owner in the company, RBS will make a special dividend payment of £1 billion to the Government……the first in 10 years.

 

Just the small matter of the other £44 billion we spent on the bailout now!

 

February’s Biggest Loser……Option 1 – Donald Tusk

Donald Tusk is a Polish politician who has been the President of the European Council since 2014. In Brexit terms, he is a very big deal in the negotiation process. His voice carries weight.

 

During a press conference Tusk said……“I’ve been wondering what a special place in hell looks like for people who promoted Brexit without even a sketch of a plan how to carry it out safely”.

 

Is it any wonder that we are at a standstill with EU negotiations when that is the calibre of attitude at the other end of the table.

 

 

February’s Biggest Loser……Option 2 – Liam Fox MP

As a European Union member, the UK is automatically part of about 40 trade agreements which the EU has with more than 70 countries. If the UK leaves the EU without a deal on 29 March, it would lose these trade deals immediately.

 

To avoid this, Theresa May's Government says it wants to replicate the EU's trade agreements "as far as possible" and have them ready to go in the event of a no-deal Brexit.

 

So all good for 29^th March then?

 

Errrrr, no. So far we have agreed 6 out of 40 trade deals. 2½ years and this is the sum total. For clarity, the following are the countries we are ‘good to go’, with only Switzerland in our top ten trade partners.

 

Israel

Palestinian Authority

Switzerland

The Faroe Islands

Eastern and Southern Africa

Chile

 

Congratulations Liam Fox (the International Trade Secretary)……you have taken incompetence to a whole new level.

 

 

February’s Biggest Loser……Option 3 – David Cameron

Where are you now?

 

No further questions your honour.

 

And Finally……

As China welcomes the Year of the Pig, America celebrates the third year of the cheetah.

The Month That Was……January 2019

Let me be really clear from the outset……my expectations regarding our Government / MPs / political system giving us anything meaningful to cling on to regarding Brexit are pretty low. And that is being generous.

 

I am a great believer in ‘evidence-based’ opinion. So where does my uncharitable position regarding Brexit come from?

 

Evidence #1

We are a country that was brought to a standstill by a toy helicopter. Figures revealed that the Gatwick drone disruption cost over £50 million……and there is still no evidence that the toy helicopter ever existed at all!

 

Evidence #2

Our Government has hired a company (for around £14 million) to run extra ferries in the event of a no deal Brexit. Good planning given we are just weeks away from this reality……however, this company has never floated a boat and currently owns no boats. Handy, very handy.

 

So, where does January 2019 bring us up to then?

Brexit DisMay

Where to start? What to say? Professor Peter Hennessy, considered to be the top constitutional expert in the country, summed it up perfectly……“I’ve never been so baffled in my life”. Blimey!

 

When you pick through the bones of political and media hysteria, what have we learnt this month?

 

Lesson 1: Political party allegiance has gone out of the window when voting on the Withdrawal Agreement. For the record, 202 MPs voted in favour of May’s deal and 432 against. Among Conservative MPs, 118 voted against their leader’s deal, compared with 196 who backed it.

 

Lesson 2: Given that May is operating within a hung Parliament, she had no choice but to work with and for cross party agreement on the withdrawal. She didn’t and she suffered the consequence with the biggest defeat in Parliament in over 100 years.

 

Lesson 3: Despite this huge defeat, May survived a vote of confidence across all MPs. Whilst there is no confidence in her Withdrawal Agreement, there appears confidence in May’s ability to govern our country. Apparently. Perhaps it could simply be that the threat of Corbyn as Prime Minister is too bad to consider as a credible alternative!

 

Lesson 4: With the penny finally dropped from Lesson 2, May offered to sit and negotiate with Corbyn to try to get some common ground and get the Withdrawal Agreement over the line. He declined talks……yet this is the same man that happily held discussions with Hezbollah, Hamas and the IRA! 

 

Lesson 5: Even if a Withdrawal Agreement can be agreed in Westminster, there are over 800 pieces of legislation that need to be debated and passed by Parliament by 29 March 2019……that’s less than 60 days. It’s taken 2½ years to get to this point……do we really think anybody at W1 can agree on 800 other ‘matters’? 

 

Lesson 6: MPs went back to Parliament on the back of Lesson 1 to table and vote on potential amendments to the Withdrawal Agreement. It took 2½ years for the UK Government to negotiate a Withdrawal Agreement and within two weeks the Prime Minister (and all three Brexit Secretaries) decided to vote against what they had arranged. Farcical.

 

Lesson 7: This moment represents a rock bottom low in British politics. You get the sense that we've spent 2½ years on the road to nowhere. 2½ years of debate, discussion, dispute - and are we any further forward? I’m not sure this was what we were sold in the referendum in 2016.

 

What a divorce being negotiated……what if we ‘leave’ Monday to Thursday and the EU can have us on weekends? Well……as long as we aren't made to go and stay with our crazy Uncle Sam.

Interesting America

The Trump knows he needs a healthy economy if he is to pursue a second term next year. He knows to achieve this he needs an environment of low interest rates to enthuse consumers to spend……and then spend what it doesn’t have through cheap borrowing.

 

The problem is, the Federal Reserve (independent of the US Government) has been putting interest rates up. This is a difficult concept for The Trump to grasp as he has amassed his fortune from borrowing cheaply. No surprise that he has had plenty to say and created conflict with the Federal Reserve during 2018.

 

Which makes the comments from the Federal Reserve Chairman (Jerome Powell) all the more interesting. In addition to saying he won't resign, he signalled in his comments at a conference that the Fed is no longer set on raising interest rates.

 

The exact words were……the Fed is “prepared to adjust policy quickly and flexibly to support the economy”.

 

His comments have come as a relief for many……and The Trump in particular.

 

Stone Facing

Political strategist Roger Stone and long-time ally of The Trump has been arrested and charged with seven counts as part of the Mueller probe (Robert Mueller is the special counsel investigating Russian interference in the 2016 Presidential election).

 

You would be forgiven for losing count of the number of The Trump’s close advisers, friends and associates that have been arrested, charged and / or found guilty of fraud, witness-tampering, false statements, obstructing the Presidential election, etc. etc. It is mindboggling that over 20 senior advisers are caught up in charges yet The Trump is managing to avoid arrest or impeachment and there is no shortage of allies ready to take a bullet for him.

 

No smoke without fire? We shall see. Just chalk up Stone with the rest on the ever-expanding list!

Liquid Chinese

China's central bank has taken steps to release liquidity into their economy. It has done this by cutting the reserves that banks must hold. Or to put that another way, banks that need to hold less cash, are more likely to loosen the purse strings and pump cheaper loans / credit into the second largest economy in the world.

 

Credit crunch ingredients or sound economic policy? I’ll let you know in 5 years.

 

Debt Hits New Peak

Household debt in the UK has hit a fresh high, totalling £428 billion, according to analysis by the TUC.

 

Excluding mortgages, average debt per household rose sharply in 2018 to a new peak of £15,385. This unsecured debt as a share of household income has now reached 30.4%, the highest it has ever been.

 

Pretty scary stuff if interest rates were to rise!

 

January’s Biggest Loser……Option 1 – Chris Grayling MP

Transport Secretary Chris Grayling had the audacity to defend the Government's choice of a company with no ships and no experience as the provider of extra ferry services in the event of a no deal Brexit.

 

Brexit has made the UK a laughing stock……plenty more to come as well.

 

January’s Biggest Loser……Option 2 – The Trumps

The Trump has dissolved his personal charitable foundation this month after prosecutors said that it was mired in a “shocking pattern of illegality” that had been referred to the US tax authorities for further investigation.

 

The main charge was that he “raised in excess of $2.8 million in a manner designed to influence the 2016 presidential election at the direction and under the control of senior leadership of The Trump presidential campaign.”

 

The Trump and his three children face a ban on holding office at charitable organisations and a demand to pay back $2.8 million in allegedly misused funds.

 

However, the main concern may well be the potential for the Internal Revenue Service to bring criminal charges.

 

Just for the record……this would add to the 17 known inquiries into The Trump and his circle over his presidential campaign, transition into office, inauguration, business and tax dealings, including the inquiry into Russian interference in the 2016 presidential election.

 

Perhaps it’s just water off a very large uneducated duck’s back.

 

January’s Biggest Loser……Option 3 – Oliver Letwin MP

Oliver Letwin has been a Tory MP for over 20 years. He is Westminster royalty and holds great political weight.

 

When interviewed after Lesson 6 (see above), Letwin said "I am past caring what the deal is we have - I will vote for it".

 

Wow. It’s painful to see that people who hold such power have such a dreadful attitude. Aren’t they meant to be a servant of the people?  

And Finally……

The European Commission says 'EU pet passports' issued before the withdrawal date to a pet owner who resides in the UK ‘will no longer be valid’ as of 29 March 2019 under a 'no-deal' Brexit. Clearly a case of ‘Auf Wiedersehen, Pet’

The Month That Was……November 2018

If October disturbed me (greatly), then November made me laugh……a lot. Not in a good way though. Definitely not in a good way. MP’s have turned our political system in to something that resembles a pack of hungry drunk dogs scrambling around on ice trying to get a bone dressed in poorly fitting pinstriped suits.

 

And that ladies and gentlemen is Brexit.

 

There really is very little else aside from Brexit that is having such an impact on our economy, investment markets, private sector business performance, employment, consumer confidence, etc., etc., so on and so on. Hence the reason so much of our media / news platforms are obsessed with it.

 

So, just where are we up to……

 

Brexit (Part 1)

Theresa May and advisers created 500 + pages of legal jargon to form the proposed Brexit agreement terms with the EU. She then took this draft to her own cabinet, who were severely divided on the proposal and there were significant resignations on the back of it.

 

Firstly, Esther McVey resigned as work and pensions secretary. “It will be no good trying to pretend that this deal honors the result of the referendum when it is obvious to everyone it doesn’t.”

 

Secondly, Dominic Raab resigned as Brexit Secretary (after 6 minutes in the role). "I cannot in good conscience support the terms proposed for our deal with the EU. I cannot reconcile the terms of the proposed deal with the promises we made to the country".

 

In case you missed it, let's get this right……Dominic Raab who was responsible for negotiating the draft agreement with the EU has resigned because he can't support an agreement he helped negotiate. Brilliant.

 

You really couldn't make it up could you? What a complete and utter shambles and waste of time! This Brexit show just keeps getting better and better. The entertainment is absorbing. I’m convinced there’ll be a movie made about this……Dame Judy as the PM is a given.  

 

Such has been the high volume of appointment / resignation turnover, it’s got to the stage now that I don’t know who is in the cabinet any more until they resign. Are the best people in the right position at the top end of politics……far from it.

 

The best summary of the situation I read on the proposed EU agreement was this……

 

I am trying to sell a car to Theresa May priced at £6,000 but she said the deal was rubbish. After 20 months of negotiation I now accept £7,000 for the car, retain ownership of it and agree that she can’t drive it without my permission……and it was only months ago she said she’d rather walk than buy a car from me!

 

Funny……if it wasn’t so close to home.

Brexit (Part 2)

Bizarrely, this was the easy bit. Theresa May took the draft agreement to Brussels and the EU leaders approved the proposal on the UK's withdrawal and future relations.

 

Easy? After 20 months of negotiations, the 27 leaders of 27 countries gave the deal their blessing after less than an hour's discussion. That’s just 60 minutes. X-Factor lasts longer……and they simply debate who needs to leave a show that we will have forgotten about by Easter.

 

Which suggests that the UK has given in to the majority of EU demands or they are just not taking it seriously. My money is on the former.

Brexit (Part 3)

The EU were overjoyed with the draft proposal as it paved the way for an “orderly withdrawal”……assuming it gets through UK Parliament (the ‘meaningful vote’). And that is where the problem is and what will dominate your news media platform of choice for December.

 

Trying to get MPs to agree on this is difficult……when so few want to be guilty by association. It’s a huge conflict of interest for MPs who need to decide what is right for Brexit against that of their own political career.

 

Prediction?

 

Expect Theresa May to go on a tour to every far flung corner of the UK to explain to all that this is absolutely the best that can be negotiated and far better than no deal. She will be hoping that constituencies then put pressure on MP’s to agree to the deal.

 

She will fail……there seems a very evident realisation that MPs will reject the deal when given their meaningful vote on it.

 

But MPs would then stare into the abyss, recognise that a no-deal Brexit would be a disaster, another referendum too risky and would then approve the deal (perhaps slightly modified) when brought back to them a second time.

 

This is the ‘TARP model’.

 

For those that have a life and are not obsessed with this……TARP was the US scheme to bail out bust banks after the crash in 2008. It was initially rejected by Congress, which caused the stock market to collapse. At that point senators and members of the House of Representatives panicked and voted through a modified version of the scheme.

 

What Theresa May, her supporters and chief whip are banking on (see what I did there – you’re welcome) is that as and when MPs reject her Brexit plan, the stock market and sterling (in particular) will tank. This will then scare MPs and they would then be persuaded to recant and back May's deal. It is all very plausible. It is also very dangerous.

 

Brexit was supposed to be all about taking back control……forever. It would be profoundly unhealthy for confidence in our democracy if what many see as a degraded Brexit was adopted merely because our MPs panicked in the face of a market rout.

 

We shall see.

Elsewhere # 1 - Rank Bank

The long-awaited report by Britain’s Information Commissioner’s Office, which has been investigating the misuse of personal data by political campaigns, said an insurance company owned by Arron Banks, broke British law when it used customer data to aid the Brexit effort.

 

Banks, sometimes described as the ‘godfather of Brexit,’ was the main backer of Britain’s campaign to leave the European Union,

 

According to the commissioner’s office, his company, Eldon Insurance, shared private email addresses to be sent campaign messages on behalf of Leave.EU (a pro-Brexit group), months before the 2016 referendum on Britain’s membership in the European Union.

 

The finding also adds to legal and political scrutiny of Mr. Banks, who was the single largest donor to the Brexit campaign. His dealings with the Russian ambassador ahead of the referendum have separately raised questions about whether the Kremlin sought to reward important backers of Britain’s exit from the European Union and prompted UK election officials last week to ask for a police investigation.

 

‘Ask’ for a police investigation? His actions are illegal on every level……yet we are going to ‘ask’ for a police investigation. I naively assumed that it would have been mandatory!

 

And now for the farcical bit……Banks’s insurance company and the Leave.EU campaign are facing total fines of £135,000. Oh, that will teach them.

 

Elsewhere # 2 - Trump Flump

The mid-term elections are a pretty big deal in the US. It is in effect a vote of confidence (or not) on the first two years of The Trump’s rule……and the results were not good for him.

 

Whilst Donald Trump’s Republican Party retained the Senate, the Democratic opposition won a majority in the House of Representatives. This is not a big deal……it is a HUGE deal.

 

Firstly, The Trump will struggle to get anything passed in the House of Representatives now that the opposition will hold the power. Secondly (and most importantly), the House of Representatives now holds the power to launch investigations into The Trump’s ‘behaviour’ which could ultimately lead to impeachment.

 

Given the scandals involving Russia, tax avoidance, extra marital affairs, et al, there is plenty to concern The Trump. An abundance in fact. 

 

The past two years of The Trump’s presidency have been fascinating……the loss of the House of Representatives will make the next two years truly compelling.

November’s Biggest Loser……Option 1 – Arron Banks

No publicity is bad publicity……so the saying goes. The £135,000 seems a snip to get the Leave Campaign even more column inches.

 

Why does democracy bring out the worst in so many?

November’s Biggest Loser……Option 2 – Donald Trump (again).  

Having lost the power in the House of Representatives to the Democratic Party, The Trump’s tweet on the night of the results……“Tremendous success tonight”. Baffling. Very baffling.

November’s Biggest Loser……Option 3 – Ivanka Trump (new entry)

In 2016, Donald Trump accused Hillary Clinton of putting the US "in danger" over her use of a private email account while she was Secretary of State. He said it was “bigger than Watergate" and he used it as part of a huge campaign to discredit her during the Presidential election run in. And it worked.

 

Fast forward to 2018 and The Trump’s daughter, Ivanka Trump, has used a personal email account to send hundreds of messages discussing official White House business in her role as senior adviser to the President. 

 

One can only assume that The Trump sees this as just as big an issue as 2016. We shall see. Breath not being held. 

And Finally……

Just when you thought our Government had exhausted all the ways to embarrass and demean Britain......they find another one. They're bringing out a Brexit 50p coin. Brilliant. It will be due out in one year's time……correction two year's time……nope 5 five year's time... Hang on, my mistake it's a Euro.

Regardless, it will take a lot of Brexit 50p coins to pay the Brexit bills.