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Friday's Business and Politics round-up

12 Jul 2019

Person reading the IoD's news round up with breakfast

Good morning!

And happy Friday.

Many of the week's leading stories see fresh developments this morning. Labour's General Secretary Jennie Formby hits back over anti-Semitism mishandling claims, Jeremy Hunt calls for more Naval funding following tensions in the Gulf (more below), and reports that the inquiry into leaked diptels from the British Ambassador to the US has reached an advanced stage.

Meanwhile, this evening Andrew Neil's no doubt probing interviews with the Conservative leadership candidates will air. Apparently, under half of Tory members' votes have been cast, leaving all to play for...

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At your services

The Government is pushing ahead with plans for a digital services tax, as France's introduction of a similar law sparks ire in Washington.

Jesse Norman, Financial Secretary to the Treasury, said yesterday, 'This targeted and proportionate digital services tax is designed to keep our tax system in this area both fair and competitive, pending a longer term international settlement.'

Earlier this week, the US President instructed his trade team to investigate whether France's tax was 'discriminatory or unreasonable' - the tax is believed to affect mainly large American firms such as Amazon and Google. If the tax is found to be discriminatory, Trump may retaliate with tariffs.

France has hit back at Washington, with Finance Minister Bruno Le Maire saying, 'Between allies, I believe we can and must resolve our differences in another way than through threats.'

When the UK's proposal was announced in last year's Budget, the IoD warned that 'the Chancellor must proceed with extreme caution'.

Strong and stable?

The Bank of England made waves yesterday with the publication of its regular Financial Stability Report.

The FT and others led on its statement that the 'perceived risk' of no deal was increasing. The institution warned that a disorderly Brexit and global trade wars were the primary concerns for the UK's financial stability.

The Bank's Governor, Mark Carney, said that, while the UK's level of preparedness had increased, 'there would still be a major economic adjustment, a major economic shock' in the event of a no-deal Brexit.

Meanwhile, the papers also picked up on the central bank's decision to review whether so-called 'open-ended funds' should have to bar investors from being able to withdraw their money at short notice. Such funds have been in the spotlight since Neil Woodford's flagship fund entered difficulties.

All at sea  

Jeremy Hunt has promised to reverse cuts to the Royal Navy's budget, following a week in which a Navy frigate was forced to turn its guns towards Iranian patrol boats that had impeded a UK-flagged vessel, according to the MoD.

The Daily Telegraph and others report that British ships have been told to consider Iranian waters as a 'level three' (i.e. critical) security risk.

The incident on Wednesday followed the detention of an Iranian ship by authorities in Gibraltar, who believed it to be breaking sanctions. Iran's President Rouhani called the move 'mean and wrong' arguing the UK was an 'initiator of insecurity' and warning of repercussions.

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Donjeta Miftari, Head of Communications

020 7451 3285

Euan Holmes, Press Officer

020 7451 3280

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