Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Gimme! Gimme! Gimme! (A tax after lockdown)

Written by Maria Julia Pieraccioni, associate 
Edited by Tom Gillingham, associate partner
7 September 2021

Good morning,

After a hiatus of more than four decades, Swedish supergroup ABBA announced its return to the music scene, complete with a new album and a digital concert in the works. While the way we experience music has drastically changed over the decades, ABBA remains an intergenerational fan-favourite: fans worldwide flocked to Twitter to express their excitement, with one even commenting that their new album “saved 2021”. Truthfully, I’m also part of this cohort. Like many peers, we grew up listening to our dad’s old ABBA records, watching Mamma Mia! and the disaster that was Mamma Mia! Here we go again just so we had an excuse to blast the Swedish pop group’s hits.

However, talk of ABBA’s return were quickly overshadowed over the weekend by the comeback of a, perhaps, less welcome version of financial support for the elderly: the plan to raise national insurance payments.

Sources close to the prime minister revealed an expected rise in national insurance payments to fund social care. The Times reported that health secretary Sajid David will be pushing for a 2% increase, while chancellor Rishi Sunak is arguing for a conservative increase of 1%, echoed by reports in the Daily Telegraph that the Treasury may be pushing for 1.25% increase.

However, when interviewed by Sky News, justice secretary Robert Buckland quickly backtracked on the newspapers’ reports, stressing that no decision had been made for the time being and remarking that any decision will need to be “resilient for the long-term”. Buckland added that, “this isn’t just change for a Parliament, this has got to be a generational change”.

As well as any tax rises breaching the Conservative party’s manifesto commitments, Buckland’s comment hints at the long term-effect of any decision, particularly when it comes to who would actually pay for the increase. Helen Miller, from the Institute of Fiscal Studies, argued that a raise in national insurance would increase the existing generational disparity and hit young workers the worst. Young workers would be expected to cover additional costs to National Insurance which is neither paid for by pensioners nor paid on revenue from passive income, such as from investments or rented properties.

If the plan does proceed, it may threaten an apparent surge in intergenerational camaraderie during the pandemic, as reported by a study by YouGov, which found that solidarity between different demographic classes had surged during Covid-19. However, another study by social scientist Bobby Duffy in his book Generations could argue that this solidarity has always been there, and that the ‘boomer’ v. ‘millennial’ divide is a rhetorical one, hardly rooted in real attitudes generations have towards each other. Whichever the case may be, perhaps generations share closer ties than they believe.

We will know soon enough what is agreed on the funding of social care, but regardless of the detail, perhaps we can also channel ABBA and nostalgia for the past to remember there is plenty that unites the generations…  

News

Prime minister Boris Johnson has announced the NHS in England will receive a £5.4 billion in boost over the next six months in an effort to tackle the backlog caused by the pandemic. While more than half of this investment will cover additional Covid-19 costs, the rest will be redirected towards freeing up hospital beds, helping hospital recover scheduled surgery and day-to-day costs.

More than 1,000 migrants are believed to have crossed the Channel on Monday, as unconfirmed reports in Kent suggested people-smugglers may have taken advantage of the warm temperatures and calm weather. If confirmed, yesterday marks a new daily record, increasing pressure on the home secretary, Priti Pratel, to address the surge in dangerous crossings. (£)

The German ambassador to China, Jan Hecker, passed away on Monday after only a few weeks in his position. While the circumstances around his death are yet to be disclosed, chancellor Merkel remarked yesterday that the ambassador was a “highly esteemed adviser… with deep humanity and outstanding expertise”.

Business and economy

APM Terminals, one of the largest port and terminal operators, has warned that the global shipping and supply chain crisis could be solved only by a slowdown in consumer demand. The company’s chief executive, Morten Engelstoft, said that a “vicious circle” has been created by surging demand putting strains on shipping companies, suppliers and logistics companies looking to deliver goods. (£)

British Airways pilots that decide to switch to the airline’s newly announced low-cost spin-off airline, will be paid less than their counterparts at rival EasyJet. The new budget airline will operate out of Gatwick airport, where British Airways has consistently lost money in the past. Later this month, members of the pilot’s union will vote on BA’s plans, and if changes are approved, the airline is looking to operate as many as 17 aircraft from the airport.

In the absence of an agreement between the UK and the EU on the Northern Ireland Protocol, the UK has suspended indefinitely checks on some goods entering Northern Ireland. David Frost, lead negotiator between the UK and the EU, commented that this new plan will allow the two parties to reach an agreement without deadlines threatening the talks.

Columns of note

In the wake of the end of the war in Afghanistan, Afzal Amin asks in The Times, what is next for post-Afghanistan NATO? Amin takes stock of NATO’s current state of disarray, such as its fraught relationship with Turkey and Russia, and the overuse of US forces to make up for the EU’s decentralised military capabilities. Overall, the author suggest NATO should review its grand strategy and “reform how it works so it can adapt to survive”. (£)

Elsewhere, in The Guardian, Simon Tisdall remarks the impending end of another era: that of Angela Merkel’s chancellorship. As her term’s end looms, Tisdall argues that while Merkel was viewed as a “competent, reassuring, trustworthy figure” domestically, the same wasn’t true for her reputation in Europe. Merkel stands accused of prioritising German economic and business interests as well as helping increase the divide between the European North and South and paving the way for the emergence of Eurosceptic, far-right populist movements. However, Tisdall argues that not all is lost, and perhaps, the upcoming elections will prove Germany is the trusted leader Europe needs at this time of crisis.

Cartoon source: The Telegraph

Markets

What happened yesterday?

While US markets were closed for Labour Day on Monday, London and European markets ended trading on a high. London’s FTSE 100 index closed in positive territory, gaining 0.68% from last week, as investors digested the latest reading on the UK construction sector. However, trading on the sterling was weaker, trading 0.3% lower on the dollar at $1.38, and losing 0.13% against the euro to €1.16.

Meanwhile, the pan-European Stoxx 600 gained 0.69% after a drop on Friday despite low trading volumes due to a close of American markets for Labour Day. The German Dax increased 0.96%, followed by the French Cac-40, up 0.80%.

In company news

In equity markets, broadcaster ITV gained 2.54%, while JD Sports Fashion added 1.6% and Burberry gained 2.27%. Meanwhile, housebuilder Berkeley Group expanded 9.59% after a troubled start in the session as it went ex-dividend.

What’s happening today?

Finals

Alumasc Group

Mcbride

Interims

Bango       

Dp Eurasia

Flowtech Fluid.

Lamprell

Luceco      

Maintel      

Mhp Reg S

Michelmersh Brick Holdings

Midwich Grp

Parsley Box       

Vistry Grp

Q2 Results

Mhp Reg S

Trading Announcements

Safestore

Ted Baker

AGMs

Albion Venture

Brickability

Victoria

Xps Pensions

GMs

Echo Energy

Final Dividend Payment Date

Monks Inv 

UK Economic Announcements

(00:01) Retail Sales

(07:00) Halifax House Price Index

Int. Economic Announcements

(07:00) Industrial Production (GER)

(10:00) ZEW Survey (GER) – Current Situation

(10:00) ZEW Survey (EU) – Economic Sentiment

(10:00) Gross Domestic Product (EU)

(10:00) ZEW Survey (GER) – Economic Sentiment

Source: Financial Times

did you know

In 2019, the founder of the Apostrophe Protection Society brought the organisation to a “full stop”.

He declared that their work was futile – “We, and our many supporters worldwide, have done our best but the ignorance and laziness present in modern times have won!”

(Source: @qikipedia)

Parliamentary highlights

House of Commons

Oral questions

Treasury (including Topical Questions)

Ten Minute Rule Motion

Transport (Disabled Passenger Charter)

Legislation

Elections Bill: Second Reading

Adjournment

Local policing

Westminster Hall debate

The future of the East Midlands economy

Impact of floods in North Westminster

Continued nuclear fuel manufacturing in the UK

Supply of affordable, good quality housing in the South West

Global Britain, human rights and climate change

House of Lords 

Oral questions

Report by the Intergovernmental Panel on Climate Change ‘Climate Change 2021: the Physical Science Basis’

Withdrawal of UK troops from Afghanistan and steps being taken to protect the freedoms and rights of women and girls in Afghanistan

Amending competition law to enable collective action to ensure an efficient, effective, accessible, and sustainable UK-wide cash network

Reducing the risk of vehicles hitting railway bridges

Legislation

Armed Forces Bill – second reading

Public Service Pensions and Judicial Offices Bill [HL] – second reading

Scottish parliament 

Time for Reflection

The Rev Hayley Cohen, Minister of Northesk Parish Church, Musselburgh

Parliamentary Bureau Motions

Topical Questions (if selected)

 First Minister’s Statement

Programme for Government 2021-22

Scottish Government Debate

Programme for Government 2021-22

Committee Announcements

Business Motions

Parliamentary Bureau Motions

Decision Time

Member’s Business

Alasdair Allan: Reserved Board Seats for Islanders

Share this post

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