Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

More lobbying than lending

Written by Katie Armour, senior associate
Edited by Iain Gibson, associate partner
12 May 2021

Good morning,

Restrictions, as we currently know them, will be dramatically reduced from 17 May. That’s less than a week away.
 
Over the last year most of us have made it through the Netflix back catalogue and, with Line of Duty complete, are in search of fresh drama.
 
Step in the House of Commons Treasury Committee, the leadership of which has clearly decided to lay on enough entertainment to get us through the final week.
 
Yesterday, the committee played host to Lex Greensill – the disgraced Australian financier at the heart of the number 10 lobbying scandal.
 
Greensill opened with a profuse apology to anyone who had been affected by the collapse of his company but stressed that no taxpayer money had been lost in this storm. (Expect that same line later this month when the committees look at decoration costs for Number 10.)
 
The committee is examining David Cameron’s role in trying to secure emergency funding for Greensill Capital and the Financial Conduct Authority has now begun investigating whether or not any criminal activity took place.
 
Ahead of the evidence session, the committee published a catalogue of David Cameron’s texts to ministers and high ranking officials over the duration of a “four-month lobbying campaign”. You can read them all here.
 
He called and texted the chancellor, had a drink with the health secretary, texted the Treasury’s permanent secretary, contacted the vaccine minister, emailed the prime minister’s advisers, called the chancellor of the duchy of Lancaster and reached out to junior treasury ministers.
 
In one set of exchanges Cameron promises to “stop annoying” an official at 8.30am on a Tuesday, but is texting again by 3pm Friday complaining he is “genuinely baffled” by the decision not to back the supply chain finance firm.
 
The messages brand the decision not to support Greensill “nuts” and “bonkers” but are, on a lighter note, often signed off with a parting “Love Dc” in much the same style that Victoria Beckham signs off her instagrams (x VB).
 
There was a whiff of scandal about this when it was just one text to Rishi Sunak. On discovery that it’s been a concerted campaign people are naturally perturbed. Taken with Greensill’s wholesale recruitment of senior civil servants, sometimes still employed by the civil service, you start to wonder if their main business was lobbying, not lending.
 
But this is all just laying the groundwork for the main event.
 
Tomorrow David Cameron himself will sit before the committee and be asked to account for his actions and Greensill’s remarkable access to Downing Street during his tenure. Last month he broke his silence on the story saying he accepted there were “lessons to be learnt“ about appropriate channels of influence. He may be about to learn those lessons the hard way.

News

Violent and distressing scenes were captured in social media videos last night as the conflict between Israel and Gaza escalated. The Israeli prime minister, Benjamin Netanyahu, has pledged to increase the intensity of attacks on Gaza, even as medics on both sides highlight the harm caused to civilians. Residents in Gaza city reported that a 13 storey apartment block collapsed after being hit by an Israeli airstrike. Israel declared a state of emergency in the city of Lod as unrest spread.

Yesterday the government unveiled plans to introduce 30 new bills in the Queen’s speech. It is only the second time the Queen has been seen since the funeral of her husband prince Philip. Among the planned new laws were a bill to scrap the Fixed-term Parliaments Act, plans to improve bus and rail connectivity in England, a bill that would be designed to deter asylum seekers from crossing the channel and a post-16 skills and education bill. You can read more about the other measures detailed in the speech here.

Labour’s deputy leader Angela Rayner has said that people didn’t know what Keir Starmer stood for in the most recent election and has urged Labour party members to “pull together”. Speaking to the BBC, she argued that Labour now had to “connect” with the voters it had lost.

Business and economy

Global stocks tumbled yesterday as fears of inflation spooked markets worldwide. The FTSE 100 endured its worst day in almost three months as investors rushed to sell-off global equity. America’s main indices recorded similarly sharp falls. This comes ahead of a key reading of US inflation which will be published today, which is expected to show that consumer prices rose by 3.6% last month. The FT has reported companies are preparing a “share buyback bonanza” as the outlook clears.
 
The Office for National Statistics has revealed that the UK economy shrank by 1.5% in the first quarter of 2021, after the country endured a lengthy winter lockdown. The economy is now overall 8.7% smaller than it was before the pandemic but there were signs of a strong recovery in March when retail spending and the return of schools boosted it by 2.1%. Chancellor Rishi Sunak said: “Despite a difficult start to this year, economic growth in March is a promising sign of things to come.”
 
Astrazeneca is facing an “investor rebellion” over its Chief Executive’s pay packet. Pascal Soriot increased his potential bonus for the second year in a row but around 40% of votes cast at the firm’s AGM were against the pay rise. Under the new policy Soriot will be eligible for a bonus of up to 250% of his base salary. This was previously capped at 200%. He will also be entitled to long-term share benefits of up to 650% of his salary, similarly up from the previous 550% cap.

Columns of note

In The Times today, Alice Thomson warns that this year’s exam shambles will be worse than last. She says that the poorly planned approach of increasing testing and pre-warning of “rampant’ grade inflation makes the algorithm that was blamed for last year’s issues “seem almost sensible”. She also highlights rising anxiety levels among young people many of whom face “exhausting mocks” and have lost out due to periods in covid isolation. (£)

The Guardian’s Today in Focus podcast is offering a stunning two part piece on the post office scandal which deep dives into the effect a wrongful conviction had on the life and job of former post master for Hull, Janet Skinner. The story is back in the news this week as campaigners push for a full public inquiry.

Cartoon source: The Independent

Markets

What happened yesterday?

London stocks closed dramatically lower on Tuesday in line with a global pattern of investors worrying about rising inflation.

The FTSE 100 ended the session down 2.47% at 6,947.99, while the FTSE 250 was down 2.34% at 22,167.14.

Sterling was in a mixed state, trading up 0.21% stronger against the dollar at $1.41. but weaker by 0.11% against the euro, changing hands at €1.16.

In company news?

Supermarket chain Morrisons reversed its earlier gains and slipped by 0.38% despite reporting a rise in first quarter sales.

Renishaw, the engineering firm which went up for sale in March, was down 6.72% after reports that it was failing to attract takeover interest because of a high valuation and ownership stipulations.

British Airways and Iberia parent IAG were down 7.4%.

 

What’s happening today?

Finals
Investec
Mears
Vertu Motors

Interims
Compass Group
Sage Group

Q1 Results
Ote Ads

Trading Announcements
Coca-Cola HBC

AGMs
Aberdeen asn Inc
AIREA
Albion Development Vct
Allied Minds
Antofagasta
BP
Cenkos Sec
Centaur
Condor Gold
ContourGlobal
Enquest
F.b.d.holdings
Gresham House
Hochschild
Impact Health
Irish Cont.
Just Eat Takeaw
Lms Capital
Marshalls
Maven I&g 4
National Express
Nippon Active
Primary Health
Rentokil Initial
Robert Walters

Savills
Secure Trust
Spirax-Sarco
Standard Chartered
TP ICAP
Uk Oil & Gas
Ultra Electronics
Uniphar Plc
Vesuvius
Wood Group
X5 Retail
Xtract

GMs
KAZ Minerals

Final Dividend Payment
Cppgroup
Dairy Farm(ber)
Dairy Farm(Jy)
Dairy Farm International
Hongkong Land
Hongkong Land Holdings Ld
Jardine Math
Personal Group
Smith & Nephew

Quarterly payment date

British American Tobacco

UK economic announcements
(07:00) GDP (Preliminary)
(07:00) Industrial Production
(07:00) Index of Services
(07:00) Manufacturing Production
(07:00) Balance of Trade
(07:00) Gross Domestic Product

Int. economic announcements
(07:00) Consumer Price Index (GER)
(10:00) Industrial Production (EU)
(12:00) MBA Mortgage Applications (US)

Source: Financial Times

did you know

Baby porcupines are called “porcupettes”. (Source: Sporcle)

Parliamentary highlights

House of Commons

Urgent question
Violence in Israel and Palestine  

Ministerial statement
Covid-19 update 

Debate
Queen’s speech

Adjournment
Support for grassroots football

House of Lords 

Private Notice question
Building Fire Safety 

Debate
Economy, business, health and education

Scottish Parliament 

New MSPs will be sworn in by taking an oath or affirmation on Thursday morning.

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