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Wednesday's Business and Politics round-up

12 Jun 2019

Person sat at a table reading a newspaper

Good morning,

Opposition MPs will today seek to counter plans mooted by some Conservative leadership candidates to force a no deal Brexit.

Former Brexit Secretary Dominic Raab and Esther McVey have both suggested proroguing Parliament to facilitate no deal. This would notionally stop the Commons from preventing a no deal by by essentially not holding Parliamentary sessions. Geoffrey Cox, the Attorney General, told Cabinet yesterday he believed the proposal was not illegal.

However, today MPs will use an Opposition Day debate to try to wrest control of the agenda away from Government on a date later this month. That day could then be used to attempt to put paid to proroguing plans.

A former director of legislative affairs at Number Ten described the tactics as extraordinary. The vote this afternoon on whether it will succeed is expected to be tight. 



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

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Emission impossible?

Theresa May will seek to set in stone a target for the UK to reach net zero emissions by 2050, it emerged last night.

The Prime Minister will bring forward an amendment to the Climate Change Act today to give the aim a statutory basis. This would make the UK the first in the G7 to have an explicit zero-emissions objective. Some other countries have even more ambitious targets, the Guardian reports, such as Norway and Finland, which are aiming for net zero by 2030 and 2035 respectively.

Last week, the FT got hold of a letter sent by the Chancellor to the PM warning that the 2050 target would cost around £1tn, 'meaning less money available for other areas of public spending'. However, May has resolved to press on regardless with the aim, which was recommended by the UK's Committee on Climate Change.

Labour's Shadow Business Secretary Rebecca Long-Bailey contended that while the news was positive 'in theory', 'in practice it comes from a Conservative government that is off track to meet existing climate targets.'

Pay it forward

The UK labour market's impressive run continues, latest figures from the Office for National Statistics showed yesterday.

The rate of unemployment stayed at 3.8 per cent - a record low since comparable records began in the 1970s. The economic inactivity rate fell, while wages grew by 3.4 per cent, one and a half per cent after inflation.

Quoted by the BBC, IoD Chief Economist Tej Parikh commented, 'The buoyant labour market is still going strong for the UK economy, even as it weathers widespread political uncertainty.'

However, Tej cautioned that 'Business leaders are finding it harder to recruit as the supply of talent shrinks, and wage growth has failed to sustain the heights we saw earlier this year.'

In The Times, he urged that, 'To build on the existing strengths of the jobs market, the government will need to step up on its training agenda in order to support businesses to overcome skills shortages and drive up productivity and pay packets.'

Declaring an interest

In news that chimes with these strong labour market figures, the Bank of England has raised the prospect that interest rate rises could be around the corner.
 
Speaking at an IoD event held in Southampton, a member of the the Monetary Policy Committee, Michael Saunders, was at pains 'to stress that the MPC does not necessarily have to keep rates on hold until all Brexit uncertainties are resolved'.
 
Saunders' remarks followed on from comments made by the Bank's chief economist over the weekend. In a piece for The Sun (not yet online), Andy Haldane wrote, 'For me personally, the time is nearing when a small rise in rates would be prudent to nip any inflationary risks in the bud.'

The Bank has largely been forced into a holding pattern on rates, as the potential for a disorderly departure from the EU, which could upend the path of inflation, looms.


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Donjeta Miftari, Head of Communications 

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Euan Holmes, Press Officer

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