18th November 2019

Written by Katie Stanton, Senior Associate

Edited by Laura Hamilton, Managing Partner

Good morning,

In the UK, we have a problem with getting things done. Earlier this month, the Bank of England declared UK productivity was over 20% below its pre-financial crisis trend. Our annual average productivity growth since 2008 is a dismal 0.3%, compared with a long-term average of 2.25%. And nowhere is this productivity crisis more apparent than in Britain’s ailing infrastructure network, where a slew of super-projects have thus far come up short. Crossrail – the partially underground Berkshire to Essex railway – is incurring further delays and cost overruns, pushing the final bill to over £20 billion. The price tag for HS2 – the high-speed rail link between London and Birmingham – has ballooned from £34 billion to £80 billion. Need I mention Hinkley Point? Now I am no stranger to procrastination. This morning alone I’ve downed two cups of tea and a flamboyant espresso concoction as an avoidance technique. Biding one’s time has seemingly led me down the road of Barista-in-training; if only I could stop myself shaking from the caffeine, perhaps I’d be drawing milk foam swans by now. But Britain’s apparent idleness is a result of more than just over-zealous tea-making, copious hand-sitting and general dawdling. It is, at least in part, theoretical. In the western world, liberal democracy has often resulted in a “too many cooks” situation when it comes to grand infrastructure endeavours. No one is in power for long enough to see anything through. And even if they were, there is so much collaboration, so many checks and balances, that the watered-down outcome is generally disappointing. This is, I hasten to add, a good thing where matters of freedom and liberty are concerned; it’s just not very efficient when it comes to building stuff. Add in a generous glug of ego and you’ve got yourself an infrastructure crisis. Our politicians are infatuated with ‘career-defining’ mega projects, rather than little, life changing improvements for everyday commuters. In other words, no one’s going to stake their political career on pot-hole repair, no matter how much we need it. Which leads me inevitably to the general election campaign trail. Just last week, the Tories and Labour both promised “infrastructure revolutions”, triggering a public spending bidding war that the Institute for Fiscal Studies declared “undeliverable”. And herein lies the main issue. Our leaders are constantly looking to the next shiny project, disposing of the golden infrastructure egg of yester-year like a dirty dog before a single passenger has even bought a ticket. So, while I’m not advocating a paradigm shift away from freedom in aid of some fast trains and a flashy new power station, perhaps it’s time to start getting stuff done. And with our track record, let’s start with the small stuff.

News

Police are surrounding a Hong Kong university campus after a fiery overnight stand-off with hundreds of protesters inside. Dozens of activists tried to leave after sunrise but turned back as police fired tear gas and rubber bullets. Meanwhile, a Hong Kong court has ruled that the government’s anti-mask law is unconstitutional. Prince Andrew insisted last night that a “car crash” interview over his friendship with the convicted sex offender Jeffrey Epstein had been the right thing to do. The Duke of York has faced widespread backlash in the wake of the BBC interview with Emily Maitlis for failing to express any sympathy for victims of the billionaire paedophile. He instead claimed he did not regret their friendship and had “no recollection” of meeting Virginia Roberts (now Virginia Giuffre), the woman who claims that he had sex with her three times when she was a teenager. (£) The Lib Dems and the SNP are “not ruling anything out” in their efforts to halt ITV’s leaders’ debate due to take place in just 36 hours. Both claim ITV’s decision to hold a head-to-head debate between Boris Johnson and Jeremy Corbyn breaches Ofcom’s broadcasting code requiring “due weight” to the coverage of parties during an election. If the Court fails to reach a resolution at today’s hearing, they may seek an injunction.

Business and economy

Party leaders turn their attention to the business community later today as they prepare to give speeches at the Confederation of British Industry’s (CBI) annual conference. Conservative leader Boris Johnson will vow to end Brexit “uncertainty” and unveil plans to cut business rates; Jeremy Corbyn will set out Labour’s plans for 320,000 apprenticeships in England; and Jo Swinson will call the Lib Dems the “natural party of business” because they want to cancel Brexit. Saudi Arabia has placed a price tag of up to $1.7 trillion on state-owned oil giant Saudi Aramco after a tepid response from international investors. The kingdom plans to raise between $24 billion and $25.6 billion by selling a 1.5% stake in the energy giant on the local stock exchange. This is significantly lower than the target set by Crown Prince Mohammed bin Salman. Deloitte has given final say over the pay and bonuses of its auditors to its non-executive directors in a first for the accounting sector. The move is aimed at preventing conflict of interest concerns between its audit and consulting divisions, as the Big Four firm seeks to shake off demands for them to be broken up. (£)

Markets

The week ahead

Tuesday’s UK general election debate is expected to impact markets, as Conservative leader Boris Johnson goes head-to-head with Labour leader Jeremy Corbyn. The debate will be followed by a BBC Question Time Leaders’ Special where the two main party leaders will be joined by Nicola Sturgeon of the SNP and Jo Swinson of the Liberal Democrats. Another must-watch this week will be the latest in the public phase of the impeachment inquiry into US president Donald Trump’s dealings with Ukraine. Moreover, the European Central Bank’s new head Christine Lagarde convenes her first meeting of the governing council on Wednesday. She is expected to face calls for an overhaul of how the central bank decides monetary policy, including formal votes on setting interest rates. Lagarde follows all this up on Friday with her first major speech since taking the helm. On the global agenda, Japan will host a two-day meeting of G20 foreign ministers on Friday, offering scope for bilateral meetings in which the US and China are expected to deliberate further over trade tariffs. There is little in the way of economic data this week, but earnings reports from Royal Mail, easyJet and William Hill will be of interest to investors.

What's happening today?

Finals

Diploma

Interims

Chamberlin & Hill Mckay Securities Mirada

Trading Announcements

Dwf Group

Columns of note

Should there be an upper age-limit on high office? James Hamblin of The Atlantic thinks not – as long as representatives still have good cognitive ability.As the age of representatives increases – Donald Trump is 73, and much of his opposition is around that bracket too – we need a standardised system of testing which is set aside from concerns of politicisation and bias. Cognitive impairment cannot always be identified by CT scans or MRIs, but is much more recognisable using language and speech tests. Utilising these varied assessments can show much more conclusively that a person has the ability to synthesise complex ideas and identify key points. In the Financial Times, Rana Foroohar calls for a new regulatory system to protect our personal data. Platforms are increasingly seeping into every pore of our personal lives – from our healthcare to our finances. Last week, a Financial Times investigation showed that numerous healthcare websites, including WebMD and Healthline, were sharing sensitive data with big technology platforms, such as Google and Amazon. Data mining and monetisation has long been their core business model; but the current regulatory system is not built for age of surveillance capitalism. We need to take back control from private companies and establish a public databank, regulated by democratically elected governments. (£)

Did you know?

There are fewer women running FTSE 100 companies than there are men called Stephen running FTSE 100 companies.

Parliamentary highlights

TODAY House of Commons No business scheduled. House of Lords No business scheduled. Scottish Parliament No business scheduled. TOMORROW

House of Commons No business scheduled. House of Lords No business scheduled. Scottish Parliament Topical questions (if selected) Ministerial statement International Year of Plant Health 2020 Scottish government debate Sea fisheries and end of year negotiations Committee announcements Education and Skills Committee: Inquiry into STEM in the early years