Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Darlington buds

Written by Charles Clegg, senior associate 
Edited by Iain Gibson, associate partner
4 March 2021

Good morning,

In 1825, the world’s first public steam railway was opened with one terminus in Darlington. In 2018, I travelled from Darlington to Middlesbrough on a Pacer: the unholy union of a Leyland National bus body and a rail bogie. In the 193 years between these events, Darlington had gone from cutting edge of the world’s railways to the forgotten end of Britain’s.
 
Last year saw the replacement of any lingering Pacers and yesterday’s budget saw good news for Darlington750 senior civil servants will move to a new “Treasury North” campus in the town. Leeds will also become the home for a new national infrastructure bank.
 
Yesterday’s announcement represents at least the beginnings of a thorough commitment to areas left behind by Britain’s long economic transition from industry to service. It is a concrete action for the north of England in a way the Dominic Cummings-era policy distractions – like the “plan” to move the House of Lords to York – were not.
 
One may be forgiven for detecting a political edge in the choice of Darlington – with its Conservative mayor and MP – over, for example, Newcastle. The town does, though, sit conveniently on the East Coast Main Line; it is only a short commute from the Tyne and Wear conurbation.
 
These connections will not, however, guarantee success. After the Office for National Statistics moved its head office from London to Newport in 2006, 90% of its London-based employees chose to remain in the capital and find other jobs. The work of the office suffered accordingly. In an era of increasingly flexible working practices, the risk grows that Darlington may have the office but not the people.
 
Long-term commitments can, however, pay dividends for areas outside London. The Foreign, Commonwealth and Development Office’s presence in East Kilbride – established in the 1980s and augmented in 2010 – now contributes around £30 million to the local economy every year.
 
The Darlington campus can enjoy similar success but it will also need similar long-term investment, not only by Sunak but also by his successors. It will need senior civil servants with incentives and reasons to do substantial work there.
 
Sunak’s announcement of the Darlington hub upgrades the government’s talk of “levelling up” from puff to practice. But if the government wants to sustain and expand a real geographic distribution of power, this is just the beginning. Otherwise the UK government’s presence in Darlington risks becoming as neglected as the Pacer.

News

Nicola Sturgeon yesterday gave evidence to the Holyrood committee investigating the Scottish government’s handling of harassment complaints against former first minister, Alex Salmond. During the eight-hour session, the current first minister denied many of the allegations posed against he by her predecessor, claiming she had “no reason to want to get” Salmond. She also admitted the Scottish government’s legal case against Salmond has been “catastrophic”.

The UK government’s new Brexit minister, Lord Frost, has angered the European Union by announcing the government’s intention to extend by six months an exemption for checks on supermarkets that send goods from Great Britain to Northern Ireland. An EU diplomatic source has described the unilateral move as a “serious provocation”. (£)

A study by Imperial College London has found the decline in the Covid-19 infection rate in England has slowed and may even be rising in some places. While the R rate remains below 1, UK government health secretary, Matt Hancock, has urged continued caution from the public.

Business and economy

Chancellor of the Exchequer, Rishi Sunk, has announced a rise in corporation tax to 25% for the biggest firms from 2023. Before 2023, however, Sunak’s budget promises £65bn in measures to boost the economy. For example, furlough will continue to the end of September as will the £20 Universal Credit uplift. Eight freeports were announced as was a new Treasury campus in Darlington and a new infrastructure investment bank, to be based in Leeds.

Business groups, including the CBI, have claimed the proposed rise in corporation tax sends the wrong signal to investors. Adam Marshall, director general of the British Chambers of Commerce, did, however, claim the effects of rise had been ‘blunted by the big new incentives for investment, lower rates for the smallest firms and the extension of the coronavirus support measures in the short term’. (£)

The Office for Budget Responsibility has predicted that, after restrictions ease, the UK’s economic growth in 2022 will be 7.3%: the highest rate since 1948. The OBR also said this financial year’s government borrowing of £355bn would push the annual spending deficit to 16.9% of GDP: its highest level since 1944-45.

Columns of note

In the Guardian, Laura Spinney compares countries and regions that have pursued a strategy of eliminating Covid-19 and those that have sought merely to suppress it. Spinney notes a growing division between the two strategies in global policymaking. She suggests that Covid remains too difficult to categorise but that an elimination strategy should be considered against any future pandemic.

Max Hastings claims in the Times that Covid-19 has given cover to bad government in Britain and to autocrats abroad. He argues many individuals’ interests in the vaccine has focussed largely on how restrictions and vaccinations will affect themselves. He traces how issues like the plight of Hong Kong and the increasing autocracy of Poland and Hungary have been edged out by Covid news. (£)

Cartoon source: New Yorker

Markets

What happened yesterday?

In Europe, the Stoxx 600 equity index closed down 0.1% while the FTSE 100 rose 0.9%, boosted by the budget.

A sell-off of US government bonds intensified yesterday as the tech-focused Nasdaq Composite index fell 2%. The S&P 500 fell by 0.7%.

Sterling stands against the Euro at 1.1588 and against the US dollar at 1.3969.

In company news:

Stellantis, formed through the merger of Peugeot-maker PSA and Fiat Chrysler, reported better than expected earnings: at the end of 2020, combined liquidity stood at €57.4bn and free cash flow at €3.3bn.

Sainsbury’s is to cut 500 jobs at its head office in London; a further 650 jobs are threatened by the supermarket’s plans to close one of its online grocery packing centres.

What’s happening today?

Finals
Aviva
Cairn Homes
Coats
CRH
Entain
Franchise Brand
Hunting
Hutchison China
Mail.rugrp S
Meggitt
Melrose
Morgan Advanced Materials
Rathbone
Rentokil Initial
Schroders
Spire Healthcare
Synthomer
Vesuvius
Vistry Grp
William Hill

Interims
Galliford Try
Origin
Ruffer Inv. Co.

Q4
Mail.rugrp S

Trading announcements
Hansard

Final ex-dividend date
Aviva 8 3/8 Pf
Bristol Wtr.8t
Gen.acc.7se.pf
Menzies(j)9prf
Keystone 5Pf
Morgn.ad.2ndprf
Morgn.ad.1stprf
Nthn.elec.prf
Rights &Iss.
Rio Tinto
Rsa Ins. 7Tepf
S & U 6Pf.
Safestore
Scot.amer.inv.
Standard Chartered

Interim ex-dividend date
bstd Equityinc
Abstd Euro Log.
Ashmore
Atlantis Japan
Berkeley Group
BHP Group
City Lon Inv.
Crown Place
Dechra
Draper
Fonix Mob.
Genus
Globalworth
Gresham House
Grit Real Est.
Henderson Div .
Jlen Env.
Jupiter Emerg.
Jupiter Uk Gr
MJGleeson
Nat.west 9Pf
Oxford Instruments
Personal Assets Trust
Renishaw
Ricardo
Springfield Pr.
St James Place
Utilico Em.mkts
Vpc Specialty
Warehouse Reit

Quarterly ex-dividend date
Aberdeen Di&g
Diversified Gas
HICL Infrastructure
Honeycomb Inv.
Premier Miton
Real Est.cred
Regional Reit
Rm Secured
Util    

Special ex-dividend date
Hunters Property
Rio Tinto
Sylvania Pl

AGMs
Chemring
Eco Animal
Jersey Electricity

UK economic announcements
(09:30) PMI Construction

Int. economic announcements
(10:00) Unemployment Rate (EU)
(10:00) Retail Sales (EU)
(13:30) Initial Jobless Claims (US)
(13:30) Continuing Claims (US)
(15:00) Factory Orders (US)

Source: Financial Times

did you know

Sunderland is the only sister city of Washington, DC that is not a national capital.

Parliamentary highlights

House of Commons

Oral questions
Environment, Food and Rural Affairs (including topical questions)
Church Commissioners and House of Commons Commission and Parliamentary Works Sponsor Body and Public Accounts Commission and Speaker’s Committee on the Electoral Commission

Business statement
Business Questions to the Leader of the House – Mr Jacob Rees-Mogg

Ministerial statement
Counter-Daesh update – Dominic Raab

Debate
Continuation of the Budget Debate

Adjournment
British Council and the Integrated Review – Mr John Baron

Welsh Affairs Committee
Oral evidence: Renewable energy in Wales

Public Accounts Committee
Oral evidence: The Industrial Strategy Challenge Fund

Defence Sub-Committee
Oral evidence: Women in the Armed Forces: From Recruitment to Civilian Life

Environmental Audit Committee
Oral evidence: Biodiversity and Ecosystems

Scottish Affairs Committee
Oral evidence: Scotland and the Shared Prosperity Fund

Welsh Affairs Committee
Oral evidence: One-off session with the First Minister of Wales

Select Committee on the Armed Forces Bill
Oral evidence: Armed Forces Bill 2019-21

Women and Equalities Committee
Oral evidence: Take up of the COVID-19 vaccines in BAME communities and women

House of Lords 

Oral questions
Various

Statement
Covid-19 Update – Lord Bethell

Orders and regulations
Various

Legislation
Telecommunications Infrastructure (Leasehold Property) Bill – consideration of Commons amendments – Baroness Barran

Short debates
Various

Highgate Cemetery Bill [HL] Committee
Oral evidence: Highgate Cemetery Bill [HL]

Scottish Parliament 

First minister’s questions

Scottish Parliamentary Corporate Body question time

Portfolio questions

Finance

Stage 3 proceedings
Pre-release Access to Official Statistics (Scotland) Bill
Scottish Parliamentary Standards (Sexual Harassment and Complaints Process) Bill

Scottish Government Debate
International Women’s Day 2021: #ChooseToChallenge

Culture, Tourism, Europe and External Affairs Committee
Oral evidence: EU trade and co-operation agreement

Social Security Committee
Subordinate legislation

Standards, Procedures and Public Appointments Committee
Subordinate legislation

Covid-19 Committee
Oral evidence: Covid-19: Next steps

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