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Monday's Business and Politics round-up

24 Apr 2017
Smart devices resting on a Business paper

IoD in the news

Financial Times - Mixed benefits for a UK Tory election victory
Economia - High earners hardest hit by tax rises, says IFS

Good morning,

The people of France have spoken, the centrist hopeful Emmanuel Macron will face far-right candidate Marine Le Pen in the final round of voting on 7 May.

Despite the rise in populism across the world  and Ms Le Pen having made significant gains, yesterday’s result indicates that centre-ground politics may just live to fight another day.

With 97% of votes counted, Mr Macron stands on 23.9% and Ms Le Pen on 21.4%. The euro jumped to a five-month high last night as Macron took the lead in the race to become the next French President. 

Mr Macron, a former banker, is seen as a political outsider, having never run an election campaign before. But after topping yesterday's vote, he is now favourite to win the run-off on 7 May.

Operation occupy all ground

Theresa May looks set to occupy a huge chunk of political ground as she proposes slashing £100 from the energy bills of 17m families and granting new rights for workers, while still playing to her traditional Tory crowd. The launch of her election campaign saw Mrs May in a marginal Labour seat, showing she is ready to attack what she calls ‘the coalition of chaos’ or keen not to lose out on the support of Labour voters.

The Sunday Times’ Tim Shipman yesterday wrote the policy is a ‘centrepiece of a manifesto that will set out a bold social vision for Britain that parks Tory tanks on terrain usually occupied by Labour’. Indeed, fixing energy prices is nothing new, Labour’s Ed Miliband had previously made a similar proposal, to which David Cameron responded by accusing him of wanting to live in a "Marxist universe" and resorting to a "petty socialist campaign". How times have changed.

However, Work and Pensions Secretary Damian Green said his party's promise on energy was not the same as Labour's 2015 election pledge to freeze gas and electricity bills for every home and business in the UK for 20 months. "We would have [energy regulator] Ofgem setting the limits," he said. "So it would be a cap, it would be more flexible, it would be able to reflect market conditions [and] the market would still have an influence.”

In his usual punchy style since giving up the leadership, Mr Miliband responded on Twitter saying: "Where were these people for [the] last four years since I proposed [a] cap?" he wrote. "Defending a broken energy market that ripped people off. Let's see [the] small print."

Appearing on ITV’s Peston on Sunday, Mr Green said people felt “taken advantage of” by energy firms. The manifesto pledge follows the introduction of a cap for households using pre-payment meters early this month, after the Competition and Markets Authority released a report saying customers were overpaying by £1.4bn.

The wider energy industry has reacted with scepticism to the plan, saying a price cap could have a negative impact on competition and lead to higher prices.

In another unlikely move, the Chancellor has given hints that he is no fan of the 2015 Tory manifesto pledge not to raise income tax, national insurance or VAT. Philip Hammond told the BBC the Government needed “flexibility” on taxes, which is no surprise following the failed attempt to raise taxes for the self-employed in the last Budget.

Guess who's back, back again? 

Blair is back, tell a friend.

The former Prime Minister, Tony Blair, has urged voters not to elect MPs who “back Brexit at any cost”, whichever party they are from. In an interview with the BBC, he said that Brexit was a bigger issue than party allegiance for the general election on 8 June.

Blair described Theresa May as "very sensible" and "a perfectly decent person" but said her policy on leaving the EU was "not reasonable" and that it was driven by the right wing of her party. Astoundingly, given his unpopularity even amongst some within his own party, said he felt so passionately about Brexit he was "almost motivated" to re-enter British politics himself.

Corbyn’s team hit back, with a spokesman saying: “On 9 June, we will either have a Labour government or a Tory one. If you want Brexit to be used to turn Britain into a low-wage tax haven, vote Tory. If you want a Britain for the many not the few after Brexit, vote Labour. The choice is clear.”

Mr Blair stepped down from frontline politics in 2007 but has become more politically active in recent months, setting up a think tank in London to make the case for the centre-ground and for continued EU membership. Many will be hoping, not least Corbyn, that after a 10 year absence, Blair doesn't get too motivated.

In other news, Jeremy Corbyn is due to address the Scottish Trades Union Congress in Aviemore today. Mr Corbyn will say: “Labour will never, ever apologise for the closeness of our relationship with the trade union movement, you are our family”.

Labour currently holds just one seat in Scotland, having lost 40 seats to the SNP at the last general election. A recent poll not only put the party behind SNP, but also 20 percentage points behind the Conservatives in Scotland.

The SNP leader Nicola Sturgeon will also address the congress, where she will say the general election is “a two-horse race between the SNP and hard-line Tories”.

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