Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Kicking the can down the road?

Written by Charlie Clegg, senior associate
Edited by Scott Reid, associate partner, and Kevin Pringle, partner 

17 November 2021

Good morning,

It’s a joyous day when I find a 24-can pallet of Irn-Bru Sugar Free reduced to £8. There is, however, a change looming over such happy occurrences. Today, the Scottish government will update MSPs on the next steps in the deposit return scheme (DRS). The scheme works by each consumer paying a 20p deposit on most drinks containers. The consumer can return the container and redeem the money at a designated shop or via a ‘reverse vending machine’. Extra costs will be charged to drinks producers while a quango, Circularity Scotland, administers the scheme. The scheme has been a long time coming. The legislative powers to establish it were first set out in 2009 and the process leading to the forthcoming system began in 2015. Despite a start date long scheduled for July 2022, there are reports that today’s statement will announce the delay of the scheme until 2023. Such a pause could undermine the Scottish government’s ambition to become the first part of the UK to implement a DRS. The Scottish government has pre-emptively blamed any delay on Brexit and Covid. These issues were, however, well advanced when, at May’s election, the SNP recommitted to the July 2022 start date. Indeed, one of the SNP’s own former MSPs, Angus MacDonald, has claimed there is now no good reason for a delay. Any delay is likely to be a small but superable embarrassment to a government that has used Glasgow’s hosting of Cop26 to promote its environmental credentials. Little wonder, then, that any such announcement has waited until after the conference. For Lorna Slater, the Green minister overseeing the scheme, it’s a poisoned chalice. The real harm, though, is for consumers, vendors, and producers who are in the lurch over when and how they will adapt to the scheme. Take the issue of intra-UK divergence. The scheme will create costs for producers selling to Scotland. Some may decide to withdraw from the Scottish market, reducing choice for consumers. In a 2019 consultation on a DRS, most business respondents sought a UK-wide scheme. For the moment, I’ll continue to save £4.80 in deposits on my next palette. For businesses and consumers, however, today’s announcement may bring more waiting.

News

At least one person has been killed by a massive storm in the Pacific North West of North America. In Canada, 250 people have been airlifted, while road and rail links to Vancouver, including Canada’s largest port, has been cut off from the rest of the country. Home Secretary Priti Patel has claimed Emad Al Swealmeen, the man killed on Sunday in Liverpool by a bomb suspected to be his own, had exploited Britain’s “dysfunctional” asylum system. Meanwhile, the Refugee Council has claimed two-thirds of migrants crossing the channel illicitly would be eligible for asylum. The prime minister will face questions from MPs into his plans to reform rules on MPs’ second jobs, including an end to paid directorships for MPs. Boris Johnson will face prime minister’s questions at noon, followed by the Liaison Committee at 15.30. He is expected to meet Conservative MPs too, some of whom are unhappy about the extent of the changes. Labour has accused the government of attempting to dilute reforms.

Business and economy

UK employment has continued to rise sharply despite the end of the furlough scheme. Employers added 160,000 more workers to their payrolls in October, taking the total to 29.3m. The unemployment rate dropped to 4.3%, albeit still above a pre-pandemic rate of four per cent. Lidl has announced plans to become the UK’s highest-paying supermarket. From March, the chain will increase hourly wages to £10.10 for staff outside London, with a rate of £11.40 for more experienced staff. Netflix has unveiled a chart of viewing figures for the first time in its history. The step represents a major change in policy for the streaming giant, which has been accused of “cherry picking” statistics in past releases. The first weekly chart, released yesterday, shows that Red Notice was the most popular film and Narcos: Mexico the most popular television show by hours watched. (£)

Columns of note

Germany has no nuclear weapons of its own. What, then, would be the problem if it joined the Treaty on the Prohibition of Nuclear Weapons? That move is being considered by the country’s incoming social democrat/green government. In the Financial Times, Constanze Stelzenmüller looks at how an anti-nuclear German government could have a major impact on US nuclear weapons based in Germany. It also risks Nato’s overall weapons policy at a time of rising east-west tensions. (£) In Scotland, SQA workers and the Royal College of Nursing are now threatening strikes on the back of industrial action by other groups. Is the country facing a “winter of discontent”? That’s the question Chris Deerin asks in the New Statesman. As he sees it, the SNP, so long able to position itself in opposition to the UK government, now risks being seen as “just another government” by voters. (£)

Markets

What happened yesterday?

US retail statistics have shown that shoppers are accepting higher inflation, even if a question mark remains over how long the country’s Federal Reserve can keep interest rates low. In response, the S&P 500 gained 0.3% while the Nasdaq Composite rose 0.2%. Hong Kong’s Hang Seng gained 1.3% in a reflection of optimism about US-Chinese relations. In Europe, the Stoxx 600 index rose 0.2% while London’s FTSE 100 dipped 0.3%. The pound was trading at 1.34 dollars and at 1.19 euros.

What’s happening today?

Finals
Sage Group

Interims
Cmc MktsExperianSpeedy HireSSETatton Asset M.Workspace

AGMs
Amte PowerBerkeley EngBmo Real Est  Celtic  Hend.euro.Ncondezi EnrgPacific HorizonPicton PropRainbow Rare Earths 

Q3 results
Bank Of Georgia Group

Trading announcements
Safestore

UK Economic Announcements
(07:00) Producer Price Index(07:00) Retail Price Index(07:00) Consumer Price Index

Int Economic Announcements
(12:00) MBA Mortgage Applications (US)(13:30) Building Permits (US)(13:30) Housing Starts (US)(15:30) Crude Oil Inventories (US)

Source: Financial Times

did you know?

Samuel Beckett is the only Nobel laureate listed in Wisden, the cricket annual. He played first-class cricket for Trinity College, Dublin.

Parliamentary highlights

House of Commons

Oral questionsWales Prime minister’s question time

House of Lords 

LegislationProfessional Qualifications Bill [HL] – third readingPolice, Crime, Sentencing and Courts Bill – committee stage (day 9) Oral questionsVarious

Scottish parliament 

Portfolio questionsNet Zero, Energy and TransportCovid-19 Recovery and Parliamentary Business Ministerial statementTowards a circular economy Scottish Conservative and Unionist party debateDelivering Promised Road Infrastructure Across ScotlandRemoving the Cap on Funded Places for Frontline Medical Students

Share this post

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