30th September 2019

Written by Katie Stanton (Senior Associate)

Katie Stanton kicks of the week with an insight into the e-cigarette revolution. While, vaping may seem the Juul in the crown of the metropolitan elite, growing regulatory scrutiny, health concerns and dangerous demographics spell trouble in paradise.

Good morning,

Quarter-zip, gilet and mango-flavoured vape in tow, London’s well-groomed City boys have curated for themselves quite an image.  

Still, these 21st century yuppies are not the only demographic taking hits of flavoured nicotine from a USB lookalike as if they’re popping sweeties.

Perhaps the result of countless, colourful flavour options and remarkably discreet packaging, e-cigarettes appeal similarly to a rather less appropriate group: children. This has raised eyebrows in the US.

In a system famously slow to react to the gravest social harms – think gun violence and the climate emergency – jurisdictions have been quick as a whip to outlaw vaping. New York state passed “emergency legislation” temporarily banning most flavoured e-cigarettes; San Francisco banned them in June; Massachusetts, Michigan and Rhode Island quickly followed suit.

And you only have to look at the data to see why. The number of high school students using e-cigarettes rose from 1.5% in 2011 to 20.8% in 2018. Meanwhile, the number smoking regular cigarettes fell from 28 per cent in 1996-7 to five per cent in 2018.

For a product originally marketed as a tool to quit smoking, it has done a remarkable job of enticing young people to its fruity teat.

But it’s not just the demographic that’s troubling. E-cigarettes have long been touted as a safer option; smoking’s healthier sister if you will. In reality, according to the UK’s health watchdog, they are linked to 200 different health problems.

Lipoid pneumonia is the biggie; in America 13 people have died and more than 800 have fallen ill. The British Medical Journal lists vaping as the “probable cause” as the oils in certain brands get sucked into the lungs, causing inflammation and the build-up of liquids.

This development was enough to mar the merger of tobacco’s biggest players. Last week, talks ended between Altria and Philip Morris International after investors raised concerns over the former’s investment in Juul – the sleek vape flaunted by many an aforementioned City boy. Sales of the brand have begun to stagnate amidst the bad press and, you know, death.

Still, Altria remains optimistic that its investment will pay off in the long-term, vowing to be the “responsible” adult in what has become a schoolyard squabble. And for now, at least, vaping remains the Juul in the crown of the metropolitan elite.

But growing regulatory scrutiny, health concerns and dangerous demographics may yet see the e-cig revolution go up in smoke.

News

Chancellor Sajid Javid is to announce a wave of infrastructure investment at today’s Conservative Party conference. Fourteen major roads in England will be upgraded at a cost of £25 billion, £5 billion will go to ultrafast broadband and a national bus strategy will be implemented. The funding for 2020-2025 had been set aside provisionally by his predecessor.

Meanwhile, Boris Johnson’s appearance at the conference yesterday was overshadowed by allegations of sexual misbehaviour. The prime minister denies claims that he had squeezed the leg of a female journalist while at a private lunch in 1999 during his time as editor of the Spectator magazine. The revelations come just days after it was revealed that he had had a relationship with American tech entrepreneur Jennifer Arcuri, whose company received a public grant.

Children face being banned from the classroom if they are not up to date with their vaccinations, according to health secretary Matt Hancock. He said that parents must “take responsibility”, revealing that he had taken the first steps towards mandatory vaccinations by commissioning legal advice from government lawyers. But any such move would face resistance from doctors who fear parents would become resentful and suspicious. (£)

Business & Economy

Fashion retailer Forever 21 has filed for chapter 11 bankruptcy protection in the US. In a statement, the firm said it plans to “exit most international locations”, including Europe and Asia, but will continue to operate in Mexico and Latin America. It expects to close up to 350 stores worldwide, including as many as 178 in the US, amid rising competition from online rivals.

KPMG staff have been told to hand back work mobile phones in a cost cutting drive ahead of its latest financial results. The Big Four firm told staff in an internal memo that it would start collecting phones in October, the first month in its financial year. Those working in non-client facing and junior administrative roles will be the most heavily affected. (£)

Confidence in Britain’s economic prospects has sunk to levels not seen since the EU referendum in 2016, according to a survey by Lloyds bank. The poll indicates that the prospect of a no-deal Brexit on October 31 has shaken business owners, as deadlock in Westminster continues to erode business confidence and damage the economy. Economic output fell by 0.2% in the second quarter. (£)

Markets

The Week Ahead

This week the People’s Republic of China celebrates its 70th birthday. The country is staging one of its biggest ever military parades and leaders are expected to speak about the rapid growth China has seen under Communist Party rule. However, anti-Beijing protests in Hong Kong could mar celebrations. Activists are gearing up for mass demonstrations on Tuesday, after a weekend of unrest saw protesters throw Molotov cocktails and vandalise government buildings, and police respond with tear gas, pepper spray and water cannons.

Also this week, economist Kristalina Georgieva takes the helm at the International Monetary Fund after two years as head of the World Bank. The Bulgarian national succeeds Christine Lagarde, who departs on Tuesday. Georgieva has championed diversity in the past and, as the first managing director from an emerging economy, will be looking at how best to tackle the global economic slowdown.

Back in the UK, Cottam coal-fired power station is shutting down, marking a move toward gas and renewable energy sources. As it stands, around two-fifths of the worlds coal-fired power stations are running at a loss and, in the UK, coal is largely used to stabilise the grid at peak times. Gas and renewables are now much more affordable; a success it seems for the carbon tax scheme.

And finally, investors and analysts will be paying close attention to interims from Tesco this week. The retail giant faces competition from discount stores such as Aldi and Lidl, but a range of cost cutting measures are expected to bolster Tesco’s profits. 

Whats happening today?

Finals

Grit Real Est.

Interims

Altitude Group

Ariana

Creo Medical

Etalon S

AGMs

Accsys Tech

Hardy Oil

Renalytix Ai S

The Panoply Ho.

UK Economic Announcements

(07:00) Nationwide House Price Index

(09:30) Consumer Credit

(09:30) M4 Money Supply

(09:30) Mortgage Approvals

(09:30) Gross Domestic Product

(10:30) Current Account

Int Economic Announcements

(07:00) Import Price Index (GER)

(07:00) Retail Sales (GER)

(08:55) Unemployment Rate (GER)

(10:00) Unemployment Rate (EU)

(14:45) Chicago PMI (US)

Columns of Note

Today’s Financial Times Big Read explores how artificial intelligence is coming for your job. Attention has largely focused on the impact of AI on manual labour thus far, but the growing power of software systems could vastly improve productivity in a range of office jobs, from clerical to professional. In fact, white-collar jobs will be the most affected by digital change, with 30 per cent of professional services roles in finance and insurance under risk of automation by 2029. Basically, if you’re not making routine, nuanced judgments and interacting with clients regularly, then software could be after your job. (£)

Meaghan Beatley delves inside the far-right fake-news nexus in the The Atlantic. This summer, Spanish social media was gripped by news that a 14-year-old girl in the Catalan city of Manresa was gang-raped by six North African teens. But how much of the story was true? In fact, the assault dated back to 2016 and most of the details were falsified and exaggerated for social media. That didn’t stop far-right leaders labelling North African children a threat to the safety of Spanish women.

Did you know?

Sports company Asics has apologised today after screens outside a flagship store in Auckland, New Zealand, showed pornography for several hours. The company has blamed hackers for the explicit content.

Parliamentary highlights

Today

House of Commons

Motion

To approve a motion relating to section 7 of the Northern Ireland (Executive Formation etc) Act 2019 (Historical institutional abuse) - Julian Smith

To approve a motion relating to section 6 of the Northern Ireland (Executive Formation etc) Act 2019 (Victims' payment) - Julian Smith

To approve a motion relating to section 5 of the Northern Ireland (Executive Formation etc) Act 2019 (Human trafficking) - Julian Smith

To approve a motion relating to section 4 of the Northern Ireland (Executive Formation etc) Act 2019 (Gambling) - Julian Smith

Adjournment

Availability of Maraviroc to patients with progressive multifocal leukoencephalopathy - Seema Malhotra

House of Lords

Oral questions

Secondary legislation to implement the age appropriate design code under section 123 of the Data Protection Act 2018 - Lord McNally

Government campaign advertising the return of duty-free shopping after Brexit and its compatibility with domestic law and international charters governing the advertising of tobacco products - Baroness Thornton

What date the additional 20,000 police officers announced by the Prime Minister will be deployed on duty - Lord Harris of Haringey

Discussions regarding the UK access to the Rapid Alert System for Food and Feed and the Trade Control and Expert System after the UK leaves the EU - Lord Rooker

Legislation

Non-Domestic Rating (Lists) Bill - Second reading - Viscount Younger of Leckie

Orders and regulations

Draft Human Medicines and Medical Devices (Amendment etc.) (EU Exit) Regulations 2019 - Lord Bethell

Draft Insolvency (Amendment) (EU Exit) (No 2) Regulations 2019 - Lord Duncan of Springbank

Scottish Parliament

No business scheduled

TOMORROW

House of Commons

Oral questions

HM Treasury (including Topical Questions)

Motion

To approve a statutory instrument relating to the draft common organisation of the markets in agricultural products (Transitional arrangements etc.) (Amendment) (EU exit) Regulations 2019 - Theresa Villiers

To approve a statutory instrument relating to the draft common agricultural policy and the common organisation of the markets in agricultural products (Miscellaneous amendments) (EU exit) Regulations 2019 - Theresa Villiers

To approve a statutory instrument relating to the draft import and export licences (Amendment) (EU exit) Regulations 2019 - Theresa Villiers

To approve a statutory instrument relating to the draft pesticides (Amendment) (EU exit) Regulations 2019 - Theresa Villiers

Adjournment

Performance of South Western Railway - Caroline Nokes

House of Lords

Oral questions

Taking into account the interests of future generations at every level of government policy-making - Lord Bird

Reducing the consumption levels of single use plastics - Lord Robathan

Ensuring clinicians prioritise patients at most risk from the particularly virulent strain of the seasonal flu virus - Baroness Hollins

Russell Group universities accepting T-Levels as entry qualifications for undergraduate degrees - Baroness Garden of Frognal

Orders and regulations

Draft Newcastle Upon Tyne, North Tyneside and Northumberland Combined Authority (Adult Education Functions) Order 2019 - Lord Agnew of Oulton

Draft Terrorism Act 2000 (Proscribed Organisations) (Amendment) (No. 2) Order 2019 - Baroness Williams of Trafford

Draft Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Legal Aid for Separated Children) (Miscellaneous Amendments) Order 2019 - Lord Keen of Elie

Draft Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) (No. 2) Regulations 2019 - Lord Bethell

Draft Financial Services (Miscellaneous) (Amendment) (EU Exit) (No. 3) Regulations 2019 - Lord Bethell

Scottish Parliament

Topical questions (if selected)

Committee Announcements

Social Security Committee – Inquiry into benefit take-up

Member’s Business

Anas Sarwar: 80th Year of Scotland’s Citizens Advice Service