21 February


21 February

Good morning,

Another day, another plot to undermine the prime minister. Or at least cajole her into doing what you want and threaten to bring the house down if she doesn’t.
This was clearly the intent of more than 60 backbench and high-ranking Conservative MPs who have sent Theresa May a list of demands for a hard Brexit, threatening to withdraw their support for her Brexit plans – if not her premiership -  should members of the cabinet agree to remain too closely aligned to the European Union.
Right at the top of the letter’s demands is an intention of “taking control of [the UK’s] tariff schedules at the WTO” and insisting on “full regulatory autonomy”. In practice, this suggests ripping up previously-agreed trade quotas between the UK, EU and third-party countries such as the US, New Zealand and Australia over commodities including sheep meat, beef and sugar. And in theory, this threatens even the fall-back option of reverting to WTO rules in the event of a no-deal Brexit, the interpretation of which is now clearly up for grabs.
Behind the letter are some of the usual suspects: Jacob Rees-Mogg, chairman of the European Research Group which sent the letter, and former Conservative leader Iain Duncan-Smith to name but two.
But what is more significant are those names we might not expect to make such a public attack on the PM and, above all, the letter’s timing. Buried in the list are four members of the government, four former cabinet members and a serving Conservative vice-chairwomen, threatening civil war in the Tory Party on the eve of a crunch cabinet meeting at the prime minister’s official residence at Chequers tomorrow.
Just as the Brexit secretary David Davis signalled in his speech in Vienna yesterday that there may be growing concensus around the Remain-supported rhetoric of remaining “as closely aligned as possible” with the EU after Brexit, this lot, it seems, aren’t in the mood for discussion.
The question now is; who will budge first? Repeating tropes seen elsewhere in the media this week, I’d say both sides are in for one rather long game of chicken.


President Trump has offered a ban on devices that “turn legal weapons into machine guns”, putting his administration at odds with the National Rifle Association (NRA) gun lobby in the US. The regulations would outlaw bump stocks, attachments that enable semi-automatic rifles to be fired to be fired faster; these were the weapons used in the Parkland and Las Vegas shootings. Speaking at the White House on Tuesday, the president also indicated he may be willing to back reinforcements to a national background check system for purchasers.
The former chief executive of Save the Children resigned after admitting to making inappropriate comments to three young female members of staff, it emerged yesterday. The admission of Justin Forsyth, who is now deputy executive director at Unicef and had previousy worked as a Downing Street aide to Gordon Brown, plunged the charity sector into further controversy as the international development secretary Penny Mordaunt told MPs that Oxfam had “deliberately” misled governments and the public over sexual exploitation by rogue staff in Haiti in 2011.
Jeremy Corbyn has warned the media that “change is coming” if he becomes prime minister, hitting back against diclosures of his alleged meetings with a Communist spy as “lies and smears”. The Labour leader was challenged about the allegations during a Q&A session at the EEF manufactureres’ conference at which he also threatened to make the City of London a “servant” of industry in order to curb its “out-of-control gambling”. 


Business & Economy

HSBC has revealed it has spent $28 million seeking advice on the impact of Brexit, the first time a major business has revealed its costs in managing Britain’s departure from the EU. HSBC’s bill is eight times the amount budgeted by the Financial Conduct Authority and is likely to be replicated by other large financial institutions. The bank has separately warned that it could move up to 1,000 staff members from the UK in the event of a “hard Brexit”.
A director at Lloyd’s of London has accused law firms and other City partnerships of presenting a skewed gender pay gap by deliberately excluding some of their best paid male staff from public data. Inga Beal, chief executive at the insurance market, has called for tougher regulations of gender pay gay reporting, removing a loop hole where equity partners at groups which include the ‘big four’ accountants and ‘magic circle’ law firms, are considered to be owners rather than employees.
Lloyds Banking Group has announced a £1 billion buy back of its shares, in what could mark the first in a series of cash returns from Britain’s largest bank.The move was revealed as Lloyds reported its annual results today, which saw a 24% rise in profits to £5.3 billion and 6 per cent rise in revenues. The buy back runs against concerns about Lloyds' capital raising requirements that emerged in the bank’s annual stress tests last year because of its recent acquisition of MBNA credit card business. Anaylsts at Credit Suisse have said they expect Lloyds to return £15 billion to shareholders over the next three years.


What happened yesterday?

Solid results from HSBC, BHP Billiton and InterContinental Hotels Group failed to please demanding investors as the blue-chip giants all fell to the bottom of the FTSE 100 index, which closed 0.012 per cent lower at 7,246.77.
HSBC’s reporting of a 141% increase in pre-tax profits was shrugged off by investors who expected higher earnings, leading shares in the bank to finish down 3.09 per cent at 737.00. HSBC was joined at the bottom of the table by BHP Billiton who, despite posting a 25% increase in its interim profit and a healthy dividend, shed 4.58 per cent or 71.60 points.
At the other end of the scale, Evraz was the standout gainer after signing a new five-year contract on Monday to supply rail products to Russian Railways. Shares in the steelmaker were up 5.02 per cent or 20.70.
Meanwhile, the pound was buoyant on the optimistic tone struck by Brexit secretary David Davis as he confirmed the government’s intentions for Britain to remain as closely aligned as possible with the EU after it leaves the bloc in 2019. Sterling gained 0.6% against the euro at €1.14 and recovered early losses to finish flat at the dollar at $1.40.


Capital & Counties Properties
Lloyds Banking Group
Mithras Inv Trust
Metro Bank
OMV Petrom S.A. GDR (REG S)
Unite Group
Barratt Developments
Hotel Chocolat Group
SkinBio Therapeutics
Trading Announcements

Target Healthcare Reit Ltd

Bankers Inv Trust
Baronsmead Venture Trust
Gooch & Housego
Schroder European Real Estate Investment Trust
Titon Holdings

UK Economic Announcements
(09.30) Claimant Count Rate
(09.30) Public Sector Net Borrowing
Intl. Economic Announcements
(12.00) MBA Mortgage Applications (US)
(14.45) PMI Manufactuing (US)
(15.00) Existing Home Sales (US)

Columns of Note

Writing in the FT, Martin Wolf comments that the government’s oft-repeated redlines in negotiations bar any post-Brexit trading model other than a Canadian-style free trade agreement. Whereas a much smaller Canada was able to reach agreement with the EU after nine years, Wolf suggests the much more aggressive trading stance of the UK could take much longer.
Hugo Rifkind comments in The Times that Russia interference in Western democracy has only been permitted because the tribal nature of our politics has allowed it to be. Pointing to the Mueller indictment of Russian nationals accused of sabotaging the US presidential election, Rifkind suggests Russia succeeded by finding a ready audience, as recruitment pool, in the US already.

Did you know?

The outside of an average golf ball has 336 dimples.

Parliamentary highlights

House of Commons
Oral questions
Cabinet Office and Chancellor of the Duchy of Lancaster (including Topical Questions)
Prime Minister’s Question Time
Ten Minute Rule Motion
Share Parental Leave and Pay (Extension) – Tracy Brabin
Finance (No. 2) Bill – Remaining stages
UK research centre for ceramics – Jack Brereton
House of Lords
Oral questions
Assessment of living conditions in Gaza – Baroness Tonge
Loss of retention monies by small firms following insolvency of Carillion – Lord Aberdare
Provision of and funding for local neighbourhood services – Lord Greaves
Issuing a special licence under section 30 of the Misuse of Drugs Act 1971 Act to enable the family of Alfie Dingley to import cannabis-based medication to treat his epilepsy – Baroness Meacher
European Union (Withdrawal) Bill – Committee stage (day 1) – Lord Callanan
Short debate
Promoting volunteering – Baroness Armstrong of Hill Top
Scottish Parliament
Portfolio Questions
Rural Economy and Connectivity, Environment, Climate Change and Land Reform
Stage 3 Proceedings
Budget (Scotland) (No. 2) Bill
Members’ Business
St John’s Children’s Ward, Still Closed to Out-of-hours inpatients – Neil FIndlay
House of Commons
Oral questions
International Trade (including Topical Questions)
Women and Equalities (including Topical Questions)
Debate on a motion on the role of disabled people in economic growth
General debate
Cancer Strategy
City of London Corporation and its pensions schemes obligations – Kate Hoey
House of Lords
Oral questions
Providing patients with costs of treatment to encourage charitable donations to the NHS – Lord Brooke of Alverthorpe
Re-establishment of devolved government in Northern Ireland – Lord Lexden
Assessment of the situation in Sudan regarding human rights and humanitarian aid – Baroness Cox
Nuclear Safeguards Bill – Committee stage (day 1) – Lord Henley
Short debate
Priority given to women and girls, including widows, when developing and implementing Department for International Development initatives and projects – Lord Loomba
Scottish Parliament
General Questions
First Minister’s Questions
Members’ Business
Establishment of the Scottish Stone Group – Graeme Dey
Scottish Government Debate
Scotland’s Population Needs and Migration Policy
Legislative Consent Memorandum
Financial Guidance and Claims Bill