2nd September August 2019

Written by Aidan Reid (Associate)

Dominic Cummings is the focus of today's daily briefing, as Aidan Reid discusses his immediate and disruptive impact as Boris Johnson's chief advisor.

Good morning,

It is not often that advisors become the story. The general rule is that leaders lead from the front and in plain sight, while advisors remain in the background, out of the spotlight. The new prime minister’s chief advisor, Dominic Cummings, has struggled to stay entirely in the shadows thus far. A student of Sun Tzu’s The Art of War and with a reformer’s zeal, his career in politics has been characterised by a determination to refashion things to his chosen theories. Rather than simply conforming to the governing culture, he remakes it, typically with a forcefulness that puts him in the limelight nearly as often as the politicians he serves.

Cummings became one of the main stories of the Brexit referendum as the coordinator of the Leave campaign. His adoption of then unconventional digital campaign messages were thought to be crucial to the final result, and his clashes with MPs earned him notoriety in Tim Shipman’s chronicle of the campaign, All Out War, and in the Channel 4 adaptation of that book. After that successful campaign, Cummings was ready and willing to return to government in a bid to transform the civil service and its decision-making structures along the lines of the tech start-ups he reveres in his blog posts. The failure of both Boris Johnson and Michael Gove’s attempts to become prime minister in 2016 put paid to those ambitions, until now. His return in Johnson’s new administration sets Cummings the initial short-term goal of securing Brexit by any means necessary. Gone are departments working at cross purposes with one another, replaced by an all-powerful high command and clocks counting down to Brexit day, to keep civil servants focused. The decision to prorogue parliament, which saw people demonstrate around the UK over the weekend, has been attributed to Cummings, and shows how willing he is to tear up convention to achieve his desired outcomes. 

In implementing this singular vision, there will be opposition and outright condemnation. Tensions between Johnson and his chancellor, Sajid Javid, have emerged after Cummings sacked one of Javid’s aides without his approval. His treatment of civil service staff has even led to calls for an inquiry over the weekend. The latest plan, to deselect Conservatives who vote against no-deal, would see party stalwarts like Phillip Hammond kicked out of the party he has been a member of since he was a teenager. The appointment of Cummings also outraged many MPs because it came less than four months after parliament unanimously passed a motion, tabled by the government, to censure him for failing to testify at the fake news inquiry. These are times of great uncertainty and it is unclear, among many other things, how long this particular government will last. Cummings has already changed the mechanics of governing, though, and I suspect his methods will have an impact far beyond the lifespan of this government, for better or for worse.

News

Pro-democracy protestors in Hong Kong were active again this weekend, seeking to disrupt the city-state’s airport. Roads and train services leading to what is one of East Asia’s main transport hubs were blocked, with riot police preventing thousands of demonstrators entering the terminal building. It is expected that Scotland’s first minister, Nicola Sturgeon, will outline 14 new bills in tomorrow’s programme for government speech. The legislative address is also likely to focus on the climate emergency by proposing new efforts to prioritise tackling emissions. (£) Cabinet office minister, Michael Gove, refused on the BBC’s Andrew Marr show to guarantee that the UK Government would abide by a bill seeking to stop a no-deal Brexit. It comes ahead of MPs returning to parliament tomorrow, with an expectation that the opposition will lodge legislation that demands the UK Government extend Article 50 instead. While increasing its support, the far-right Alternative für Deutschland party failed to gain majority control of two German state governments in regional elections on Sunday. There was an 18% and 10% increase in the share of the vote for the party in Saxony and Brandenburg respectively, but those gains were only enough to claim second place to the mainstream parties.

Business & Economy

New levies by the US and China on each other’s exports came into effect over the weekend. These included a five per cent levy by China on American crude oil imports – the first time fuel has been targeted – while the US implemented tariffs of up to 15% on a range of products, including smart speakers. The Argentinian government has authorised its central bank to restrict foreign currency purchases. The move comes as the peso continues to devalue as a result of struggles by the government to repay loans, and with a likely election defeat in the offing. Phillip Green’s retail and fashion portfolio is expected to be broken up. It has been suggested that the Arcadia Group, which includes Topshop and Dorothy Perkins, will be untangled to enable each brand to be sold individually over time. (£) Flights to and from the UK were disrupted over the weekend as French air traffic control equipment malfunctioned. It led to planes being unable to fly over French airspace, meaning cancellations and disruptions were experienced by passengers throughout Sunday.

New levies by the US and China on each other’s exports came into effect over the weekend. These included a five per cent levy by China on American crude oil imports – the first time fuel has been targeted – while the US implemented tariffs of up to 15% on a range of products, including smart speakers. The Argentinian government has authorised its central bank to restrict foreign currency purchases. The move comes as the peso continues to devalue as a result of struggles by the government to repay loans, and with a likely election defeat in the offing. Phillip Green’s retail and fashion portfolio is expected to be broken up. It has been suggested that the Arcadia Group, which includes Topshop and Dorothy Perkins, will be untangled to enable each brand to be sold individually over time. (£) Flights to and from the UK were disrupted over the weekend as French air traffic control equipment malfunctioned. It led to planes being unable to fly over French airspace, meaning cancellations and disruptions were experienced by passengers throughout Sunday.

Markets

The week ahead

Today is a significant day for Argentina. Its efforts to stem the damage from the country defaulting on short-term debt obligations continue, with the government going to congress today seeking a mandate to reschedule up to $50 billion of long-term debt. Meanwhile, Hong Kong will likely be brought to a standstill by a general strike over the next two days, and the US Federal Reserve publishes its ‘beige book’ of economic data on Wednesday. For the UK, the return of parliament brings with it an expected increase in volatility. It is expected that legislation to block no deal will be forthcoming, with a vote of no-confidence in the government also still a possibility. Into this mix comes a series of purchasing manager surveys expected to show that manufacturing and construction are dwindling. In company news, three of the biggest UK house builders – Barratt Developments, Redrow and Berkeley – will announce their financial results on consecutive days, starting on Wednesday.

Whats happening today?

Finals

Dechra

Interims

Centralnic              Globaltrans

Finals

Defenx   Redcentric             Synnovia

UK Economic Announcements

(09:30) PMI Manufacturing

Columns of Note

With an election likely by the year’s end, efforts by Jim Pickard of the Financial Times to explore the possible impact of Labour’s economic agenda feel timely. He highlights proposals to “rewrite the rules” through a £250 billion National Investment Bank, full employment rights for those working in the gig economy, and granting employees at the largest firms 10% of a company’s shares. He adds that the risks taken by the current government around a no-deal Brexit make it far harder for them to argue these are risky policies. (£) Ahead of this week’s programme for government speech in Scotland, Kevin Pringle writes for The Sunday Times on the need for the SNP to keep pushing forwards. He highlights the relative luck the party has had in its opposition faltering at key moments, with a lack of any sustained challenge since the SNP secured a majority government in 2011. Yet he calls on the party to ignore this lack of an alternative administration and to continue to refresh policies in order to increase the chances of a pro-independence majority in the 2021 Holyrood elections. (£)

Did you know?

Finland is the nation with the biggest coffee habit, consuming an average of 12kg of coffee beans per person.

Parliamentary highlights

Today

House of Commons

No business today

House of Lords No business today

House of Lords No business today

Tomorrow

House of Commons Main Chamber Oral questions: Foreign and Commonwealth Affairs 

Ten Minute Rule Motion: Clean Air - Chris Philp

Legislation: Census (Return Particulars and Removal of Penalties) Bill [Lords]: proceedings in Committee and remaining stages

Adjournment: Implications for the sheep industry of the UK leaving the EU without a deal - Jenny Chapman

Westminster Hall The EU Settlement Scheme in relation to looked-after children and care leavers (nominated by the Backbench Business Committee) - Steve McCabe, Tim Loughton, Stuart C. McDonald

Urgent care hub at Kettering General Hospital - Mr Philip Hollobone

School funding in East Anglia - Clive Lewis

Hull's bid to become a Maritime City - Emma Hardy

High income child benefit charge - Craig Mackinlay

House of Lords Oral questions Boosting investment and productivity and stopping the decline of sterling - Lord Haskel

Supporting the CPS in prosecuting, and the courts in sentencing, those involved in gang-related offences, illegal migration and petty offences - Baroness Neville-Rolfe

Date for the next Queen’s Speech - Lord Foulkes of Cumnoc

Powers available to recall Parliament during a prorogation in the event of a national or international crisis - Lord Cormack

Legislation: Parliamentary Buildings (Restoration and Renewal) Bill - Report stage - Baroness Evans of Bowes Park

Debate: Implementation of the recommendations of the Parliamentary Commission on Banking Standards and the opportunities for further banking reform

Scottish Parliament Topical Questions

First Minister Statement: Scottish Government’s Programme for Government 2019-20

Ministerial Statement: Ferguson Marine

Ministerial Statement: Repatriation of Convergence Funds owed to Scottish Farming