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Wednesday's Business and Politics round-up

21 Jun 2017
Smartphone and laptop on a desk

IoD in the news

Financial Times - East European immigration to UK hits decade low
The Scotsman - Jobs and prosperity come first in Brexit negotiations, says Hammond
The Times - Philip Hammond puts jobs first and opens door to migrants after Brexit
City AM - Downing Street can restore relations with business

Good morning,

The Queen’s Speech will be presented to parliament today. Yet the Government has not been formed. 10 days of talks between the Conservative and the DUP later, there is still no deal between the two parties. A senior DUP source warned yesterday that the party could not be ‘taken for granted’ and questioned Theresa May’s ability to negotiate deals, saying if the coalition agreement is not reached ‘what does that mean for bigger negotiations she is involved in?’

DUP leader Arlene Foster nevertheless confirmed that her party will vote with the Tories to pass the Queen's speech. Mrs May is reportedly seeking to negotiate a so-called 'confidence in supply' deal with the Northern Irish party, which would mean that the DUP would throw their weight behind the Government in key commons votes.

The Queen's speech, which will unusually over two years instead of one, will be delivered at 11:30am and is expected to set out the laws needed to leave the EU.

It is certainly proving to be (another) interesting week in the world of British politics…


Pragmatic Hammond

Chancellor Philip Hammond came out in support of a more pragmatic Brexit yesterday, saying jobs and living standards must come first as the UK leaves the EU. In his first Mansion House speech, as well as the first major speech since the election, Mr Hammond placed the needs of the UK economy and business as the top Brexit priorities. This comes a few days after he criticised the Prime Minister for the lack of focus on the economy. ‘The future of our economy is inextricably linked to the kind of Brexit deal we reach with the EU over the next 20 months,’ said the Chancellor. After all, no one voted for Brexit to become poorer, he concluded.

Mr Hammond said changes to customs arrangements should be phased in and there should be transitional measures to protect key industries. He emphasised that every sector of the UK economy was dependent on a ‘smooth’ transition to a post-Brexit Britain, highlighting the importance of negotiating ‘mutually beneficial transitional arrangements to avoid unnecessary disruption and dangerous cliff edges.’ The Chancellor confirmed that the UK will be leaving the single market and customs union. Nevertheless, he said it was detrimental that leaving the EU does not damage Britain’s productivity, enterprise or investment.

The Chancellor’s outright focus on the economy will differ from many of his colleagues in the Cabinet and the Tory party who prioritise sovereignty and control of immigration.

Meanwhile, Bank of England governor Mark Carney stated that now is not the time to raise interest rates. Speaking alongside Mr Hammond, the governor said falling wage growth and the unclear impact of Brexit on the economy meant they needed to be cautious.

The IoD welcomed the approach taken by the Chancellor in his speech, praising the focus on jobs and the economy as a positive step towards boosting business confidence. The emphasis on the need for an early agreement on transitional provisions was also positive. Allie Renison, Head of EU and Trade Policy at the IoD added, we ‘strongly urge Government look early on at domestic measures to boost business confidence which don’t need to wait for bilateral negotiations, such as creating a simplified system for a permanent route to residency for EEA nationals. We want business to be prepared for all scenarios but the Government should be approaching negotiations with the aim of trying to ensure that firms do not feel they need to pull the trigger on contingency planning before it is absolutely necessary.’

On domestic front, Mr Hammond pledged to stick to his target of balancing the Government's books by 2025, suggesting that he has no plans for tax and spending spree despite recent public backlash against austerity.

Somebody that I used to know

Sir Vince Cable is back on the political stage and has confirmed he will be running to become a new Liberal Democrat leader. Sir Vince has been a senior figure in the party for more than 20 years and has previously served as deputy leader, acting leader, as well as business secretary. He spent five years in the coalition government. He is currently Lib Dem economic spokesman and is expected to emphasise his extensive economic and ministerial experience during the leadership contest.

Announcing his candidacy on the Lib Dem Voice website, Sir Vince wrote, 'There is a big space in British politics which I am determined that we should occupy. I am ready to commit my energy, enthusiasm and experience to the task of leading the Liberal Democrats through what will be a period of chronic uncertainty. With the prospect of another election looming large, we must be ready for the fight.’

Other candidates have not been confirmed yet, but there is speculation that ex-ministers Norman Lamb and Sir Ed Davey may also put themselves forward for the leadership contest.

Tim Farron announced last week that he will be stepping down this summer, saying he could no longer reconcile his Christian faith with his responsibilities as leader of the party. The Lib Dems won 12 seats in the election earlier this month, 4 more than in 2015.

It's been one hell of a ride

Uber's chief executive Travis Kalanick has resigned, it was announced this morning. The resignation follows a series of scandals, including sexual harassment and sexism at the company. Last week Mr Kalanick announced an indefinite leave of absence, but pressures from investors meant that resignation was in order.

Mr Kalanick reportedly said, 'I love Uber more than anything in the world and at this difficult moment in my personal life I have accepted the investors request to step aside so that Uber can go back to building rather than be distracted with another fight.' Mr Kalanick, the founder of Uber, will remain on the company’s board of directors.

Uber is currently valued at $68bn, making it the most valuable private company in Silicon Valley.


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