Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Aid delayed

Written by Katie Armour, associate partner
Edited by Kevin Pringle, partner

14 July 2021

Good morning,

In 2015 Britain promised to commit 0.7% of its gross national income to aid for the world’s poorest countries. Yesterday parliament broke that promise for the long-term, slashing foreign aid by £4bn a year for the foreseeable future.

Ministers and the Treasury have pitched the move as a necessity to cover the groaning pandemic debt but reports suggest the growing discomfort among rebel backbenchers may have led them to pair that plea with more underhand tactics.

After the aid cuts were announced in November last year, the prime minister gave Conservative rebels personal assurances that they wouldn’t last more than one or two years. But the canny among them weren’t all that convinced and last month 30 rebels supported an amendment to a parliamentary bill that would force the issue again.

Johnson says these cuts will be temporary and that a return to 0.7% is a matter of when, not if. He has, however, attached stringent fiscal conditions which former international development secretary Andrew Mitchell says it’s “quite possible” may “never be met”.

In the end the motion was passed by 333 to 298, and while not enough to restore the aid settlement that is still the largest rebellion this government has seen.

For many onlookers it’s nothing short of a humanitarian disaster and the response has been scathing.

The steep drop in support will strip cash from the world’s poorest communities and drain programmes working on malnutrition, education and lifting people out of poverty.

Former prime minister Theresa May told the chamber she didn’t relish rebelling but that this vote would mean “fewer girls will be educated, more girls and boys will become slaves, more children will go hungry, and more of the poorest people in the world will die”.

coalition of charities, campaigners and church leaders have voiced their despair at the plans, some saying it is “akin cutting the RAF during the Battle of Britain”.

This latest upset also lands at an unfortunate time for the government. This week alone they’re fighting their second battle against the perception of callousness.

After the home secretary was criticised by footballer Tyrone Mings for inflaming racial tensions, Number 10 walked back plans to host a reception at Downing Street for the England team later this week. Presumably, they didn’t want to come?

This is about how ‘Global Britain’ wants to project itself on the world stage and what it states its priorities to be. The ripple of this decision will undoubtedly be felt the world over for decades to come and as John Major put it, “cutting help to some of the most miserable and destitute people in the world” has the “stamp of Little England, not Great Britain”.

News

First minister Nicola Sturgeon announced yesterday that Scotland will move to level zero from 19 July but with some modifications. More people will be allowed to attend weddings and funerals but limits on outdoor meetings will be maintained and the phased return of workers to offices will be delayed. She also confirmed that the mandatory use of face coverings will remain in place “for some time”.

Some UK travellers who have been vaccinated with an Indian-made version of the AstraZeneca vaccine have been barred from boarding flights because the vaccine is not licenced in the EU. The vaccine has been approved by the World Health Organisation but is waiting to be approved by the European Medicines Agency. (£)

The death toll in South Africa has surpassed 72 as violence has engulfed several parts of the country in the wake of the jailing of former president Jacob Zuma. Ten people were killed during a stampede at a shopping centre in Soweto on Monday. The military have been deployed to support police and president Cyril Ramaphosa has called it some of the worst violence witnessed in the country since the 1990s.

Business and economy

Elon Musk has been giving evidence to a US court as part of a trial, brought forward by shareholders, concerning whether or not he pressured Tesla’s board members into accepting a £1.9bn deal to buy solar panel firm SolarCity. When the deal went through, he owned a 22% stake in both Tesla and the solar panel company, which was founded by his cousins. Musk told the court he doesn’t enjoying being the boss of Tesla. The trial was paused today after a lawyer vomited in the jury box.

Former Nissan boss Carlos Ghosn has detailed his escape from Japan in a box on a plane. Ghosn was arrested in November 2018 in relation to allegations that he had misused company funds and disguised his annual salary.

Sanjeev Gupta is fighting a new legal battle with a US private equity firm to keep hold of his Belgian aluminium mill. Gupta’s metals group, GFG Alliance, is trying to refinance more than $5bn of debt after the collapse of Greensill Capital. Commodity trader Glencore is interested in the firm’s Dunkirk aluminium smelter, which is the largest in Europe. (£)

Columns of note

Nils Pratley writes in The Guardian that banks are now in a position to “unleash a dividend party” but the optics wouldn’t be good. He says they are “swimming in capital” and “could afford to let rip”, arguing that the removal of dividend restrictions means they have sufficient funds to distribute to shareholders. However, he concludes that an immediate dividend would be an “own-goal”.

Daniel Finkelstein writes in The Times that in the battle between Priti Patel and Tyrone Mings there’s “only one winner” and she’s on the wrong side of the dispute. He critiques her earlier comments about booing crowds, saying they were a “predictable political embarrassment” and reminds us that in the face of racial abuse people crave solidarity and statements of resistance. (£)

Cartoon source: The Times

Markets

What happened yesterday?

London stocks closed in a mixed state on Tuesday as investors remained cautious ahead of the start of US earnings season.

The FTSE 100 ended the session down 0.01% at 7,124.72, while the FTSE 250 was up 0.14% at 22,926.81.

Sterling was also in a mixed state, trading 0.26% weaker against the dollar at $1.38. It rose 0.14% against the euro, changing hands at €1.17.

In company news:

Precious metals mining firm Fresnillo gained 3.11% after gold prices rose.

British Land reversed earlier gains and stocks fell 1.58% despite activity at its retail parks returning close to pre-pandemic levels.

Commercial vehicle hire firm Redde Northgate dropped 1.64% after announcing it had bought Charged Electric Vehicles for an undisclosed sum. 

What’s happening today?

Finals
Accrol Group
Great Eastern
Knights Group
Kromek
System1 Group

Q4 Results
Dunelm

Trading Announcements
Ashmore
Barratt Developments
Dunelm

AGMs
B.p Marsh
Biotech Growth
Braveheart Investments
Burberry
Dp Eurasia
India Cap
Lxi Reit
Proven Growth
Proven Vct
Trackwise Desi

Final Dividend Payment Date
Michelmersh Brick Holdings

UK economic announcements
(07:00) Producer Price Index
(07:00) Consumer Price Index
(07:00) Retail Price Index

Int. economic announcements
(10:00) Industrial Production (EU)
(14:00) MBA Mortgage Applications (US)
(15:30) Crude Oil Inventories (US)

Source: Financial Times

did you know

Today is Bastille day and it became an official French holiday in 1880. It isn’t just celebrated in France however, it’s also still celebrated in western cape South Africa, Tahiti, Prague, Montreal and Milwaukee. (Source: National Geographic)

Parliamentary highlights

House of Commons

Oral Questions
COP26 

Prime Minister’s Question Time
Update on Australia FTA negotiations 

Ten Minute Rule Motion
Planning and local representation 

Legislation
The Health and Care bill  

Adjournment
Devolution for the East Midlands

Westminster Hall debate
Town deals and post covid-1 recovery
Government efforts to end the global dog and cat meat trade
Measures to combat climate change in Wales
Developing a cross-government strategy for improving outcomes for children and families
Space debris

House of Lords 

Oral questions
Review of the objectives of the National Lottery
Global Education Summit being co-hosted by the UK and Kenya
Investigating domestic abuse of older people
Concerns expressed by the Jewish community in Northern Ireland

Orders and regulations
Business and Planning Act 2020 

Legislation
Charities Bill
Environment Bill 

Orders and regulations
Draft calorie labelling

Scottish parliament 

The Scottish parliament is in recess until 30 August but will be recalled on 3 August for a Covid update.

Share this post

Share on facebook
Share on twitter
Share on linkedin
Share on email