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Thursday's Business and Politics round-up

16 May 2019

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Good morning,
Stephen Barclay, Brexit Secretary, has declared that the Government's Withdrawal Deal is 'dead' should the Commons vote it down once more.

Barclay warned that the risk of no deal was underappreciated, as he appeared in front of a committee of MPs yesterday.

Meanwhile, the Prime Minister is expected to come under heavy pressure at a meeting today with the executive of the 1922 Committee. The committee of Conservative backbenchers will continue their push for May to set a departure date.

The Brexit impasse has helped make this parliamentary session the longest since the civil war. Speaking to Bloomberg, the IoD's Edwin Morgan commented, 'In other circumstances, you’d have much more scope to talk about other things' with ministers, such as skills, regulation and infrastructure. Speaking of...

The morning's top stories, rounded up for your convenience. 

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Finding true North

HS2 is at risk of 'short-changing' the North of England, according to a committee in the House of Lords.

In a new report, the Lords Economic Affairs Committee - which includes Lords Lamont and Darling - proposes that the Northern Powerhouse Rail Scheme that will connect cities within the region should be worked on simultaneously with the southern branch of HS2. Currently, work is slated to begin on the former in the mid 2020s.

'The northern sections of High Speed 2 must not be sacrificed to make up for overspending on the railway's southern sections', argued the committee's chair.

A government spokesperson responded, saying, '"By 2020, the government will have invested a record £13bn in transport across the North, and we have a clear plan for linking the Midlands and the North through HS2 and Northern Powerhouse Rail - the full benefits of which can only be delivered on the back of HS2."

Earlier this week, the head of the National Audit Office suggested that abandoning the first leg of HS2 (from London to Birmingham) would be 'very difficult' due to sunk costs.

A pension to detail 

Several papers cover the decision of John Lewis to stop its defined benefit scheme in a cost-saving measure.

The employee-owned firm, currently one of the few businesses to still offer final salary pensions, announced it would switch to defined contribution, and would match payments of up to 8 per cent of salary, with that figure rising for long-term staff.

A statement from John Lewis said the move was 'more affordable, supporting the partnership’s strategy of improving its long-term financial sustainability'.

In other news concerning employee-owned organisations, the founder of Richer Sounds continues to garner praise for giving a 60 per cent stake of his company to an employee-owned trust.

Speaking to The Times, the IoD commented, “Giving staff a direct stake in the business can act as an extra incentive, directly aligning their incentives with the success of the company and boosting motivation. Setting up an employee-owned trust is a laudable succession plan and it’s right to encourage such schemes through tax incentives.”

National Gridlock

The Labour Party has announced it intends to nationalise the National Grid in a bid to combat climate change.

The National Grid argue the proposals 'would only serve to delay' action to help the environment.

Under the proposals, heat and electricity would be declared a 'human right'. A National Energy Agency would replace the Grid and oversee work towards the party's 60 per cent renewables target by 2030. Meanwhile, Regional Energy Agencies would replace the existing Distribution Network Operators.

The Conservatives shot back, saying that the 'ideological plan for the state to seize these companies would cost an eye-watering £100bn and saddle taxpayers with their debts'.

Shadow Business Secretary Rebecca Long-Bailey (who is scheduled to speak this morning at an IoD Open House event in Manchester) stated that the plans 'see climate justice and social justice as inseparable'. Pointing to the £13bn in dividends paid out to network operators since 2014, Long-Bailey argued that removing the National Grid from private hands would stop ripping off customers.

The proposals were leaked the day before to the Daily Telegraph, whose report suggests the official opposition would seek to pay below market value for the firms, though this was not in the official announcement.

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