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Tuesday's Business and Politics round-up

11 Dec 2018

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Good morning

In protest at the Government's decision to withdraw from the vote on their own Withdrawal deal, Labour MP Lloyd Russell-Moyle yesterday seized the ceremonial mace of the Commons. The mace represents the Queen's authority in the Chamber.

A grand gesture, with Moyle commenting that "I felt parliament had effectively given up its sovereign right to govern properly."

Possibly a gesture more grand in the description than in the actual viewing however. The video footage shows the MP attempting to exit with the mace before meekly having it taken off him by Commons staff.

"I wasn’t going to struggle with someone wearing a huge sword on their hip," Moyle said.

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Give May just a little more time

The Prime Minister has taken the decision to delay the House of Commons vote on Withdrawal Agreement, which had been scheduled to take place this evening. 

Speaking in the Commons yesterday, Theresa May admitted the deal would be “rejected by a significant margin” and that the main area of concern is the Irish backstop.

May said her next step is to travel to the Continent in an effort to gain “assurances” from EU leaders on the backstop. In addition, she will consider new methods of “empowering” MPs so that “any provision for a backstop has democratic legitimacy".

The decision provoked anger among MPs from all parties, including opposition leader Jeremy Corbyn who called for the Prime Minister to step down as her government was now in “chaos”. 

Commenting on the development, IoD Director General Stephen Martin called the delay an “extension of the frustration and uncertainty”. He emphasised that many businesses are “in the dark” about the planning that government is doing in regards to Brexit, and “the clock is ticking” to avoid a no-deal outcome. 

In response to May’s announcement, European Council President Donald Tusk confirmed the EU is to convene an emergency summit to discuss “how to facilitate UK ratification”. He also insisted, however, that the EU27 was not prepared to renegotiate the deal. 

Contracting illness 

Concerns mounted for contractor Interserve after shares dropped up to three quarters at one point yesterday.

The decline came following an announcement that the firm would likely have to convert a 'substantial portion' of debt into new shares, causing a 'material dilution' of existing shares.

The company employs 75,000 people, but reached valuations as low as £3m yesterday. The firm operates state contracts worth over £1bn, but has £650m's worth of debt forecast this year.

The Unite union warned that "we could be facing Carillion Mark Two", while fears were also raised over the businesses' large pension scheme.

At Crossrail purposes

Crossrail, the latitudinal addition to London's rail system currently under construction, is to be bailed out the tune of £1.4bn.

The project - the largest of its kind in Europe - was due to be completed in Autumn of next year, but will likely take until at least 2020 to become operational.

The shortfall in funding will be made up through two existing business taxes, according to the capital's mayor, Sadiq Khan. Firstly, through existing business rates, and secondly, through a 'community infrastructure levy', which had been intended for Crossrail 2.

Khan has also asked KPMG to investigate how the deficit came about, however the firm also audited the project up to 2015, raising concerns.

One analyst commented that while the costs superseded original estimates, they still held up well with comparable projects. However, Bent Flyvberg, of Oxford's Said Business School added that "Once you start getting the bad news coming out in dribs and drabs, that is a bad sign."

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