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Wednesday's Business and Politics round-up

16 Jan 2019

Commuters reading daily news on their journey to work

Good morning!

Of all the things I saw on the internet yesterday, this clip of an armed guard delivering Krispy Kremes to Downing Street was the best. 

No doubt it was an especially hectic day in Number 10 - but who can resist a sugary treat in times of Krisis? 

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No Chequered flag

The Government suffered a heavy defeat in the Commons last night after MPs voted against the Prime Minister’s Brexit deal. The vote was lost by 432 to 202, or a margin of 230 votes. She will today face a no-confidence vote which she is expected to win.  

The Government was widely expected to lose the vote and the result makes it the heaviest government defeat in history. After the results were confirmed Theresa May said she is committed to delivering on the results of the 2016 referendum and will hold cross-party talks to determine a way forward. 

Labour leader Jeremy Corbyn announced he had tabled a vote of no confidence in the Prime Minister. He argued the vote would allow the House to "give its verdict on the sheer incompetence of this government". it is expected to take place at 19:00.

In response to yesterday’s events, IoD Director General Stephen Martin said “It is the collective failure of our political leaders that, with only a few weeks to go, we are staring down the barrel of no deal”.

He added that although Britain is leaving the EU on March 29, “MPs are behaving as though they have all the time in the world – how are businesses meant to prepare in this fog of confusion?” His comments are widely quoted, including in the Times, the Daily Mail and CityAM. 

European Council President Donald Tusk said he regretted the outcome of the vote and called on the Government to make its next steps clear.

The Withdrawal Agreement sets out the terms of the UK’s departure from the EU in March. Its ratification would ensure there is a transition period and no 'cliff-edge' come March 29. 

Not just any closures... 

Marks and Spencer has confirmed it is earmarking 17 additional stores for closure as part of a wider reorganisation programme, which sees it encouraging customers to shop online.

Among the closures are stores in Huddersfield, Rotherham and Felixstowe. The latest plans will impact 1,045 employees. The supermarket chain says these staff members will be involved in a consultation process with “the intention of retaining as many people as possible”. No branches will be closed until this process has been completed.

Marks and Spencer’s wider restructuring strategy is a five-year plan to close over 100 stores by 2022, of which 30 have been shut down so far. The programme has already seen almost 2,000 jobs affected, although most of these staff have been redeployed to other areas of the business.

The firm wishes to move one-third of sales to its website and to have fewer branches in better locations.

Sacha Berendji, the company’s Retail, Operations and Property Director, said “Proposing to close stores is never easy, for our colleagues, customers or the local community, but it is vital for the future of M&S”.

Gary Carter, National Officer at the GMB Union said “Employees across the sector will be very worried about their job security and wondering which retailer will be next to shed jobs or close down”.

Marks and Spencer recorded a sales drop over the Christmas period, with like-for-like sales decreasing by 2.2% in the 13 weeks to December 29.  

Civil unrest

The UK’s civil service is facing an ‘exodus’ of staff with Whitehall departments “struggling to retain knowledge and expertise”, according to a new report. The turnover costs £74 million each year in recruitment costs and productivity losses. 

Research from the Institute for Government suggests the turnover is largely due to the desire for better salaries and Brexit-related issues. A cap on civil service wages was introduced in 2010. 

Official statistics reveal Whitehall is losing 9% of its staff annually, although this figure only includes people who quit the civil service altogether. In terms of intra-Whitehall moves, the number increases to 15%. 

The report says “Excessive turnover disrupts the implementation of policy in major projects […] Ministers [often] complain that they know more about a policy area than officials who advise them”.

The Institute for Government also notes that some civil servants are choosing to take up jobs to work on Brexit “as a promotion before moving on quickly”. It recommends wage increases for staff who choose to stay in a role and develop their skills. 

A spokesperson from the Cabinet Office – which lost over 27% of its staff in 2017-2018 – said Whitehall hopes to tackle high staff turnover through “pay and career development incentives”. He added “Brexit negotiations are a priority and we will deploy staff with specific expertise to achieve the best result”. 

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