Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Winter of discontent

Written by Rebecca Smithson, researcher
Edited by Adam Shaw, associate partner

28 September 2021

Good morning,

The Labour party conference taking place in Brighton dominated the news agenda yesterday – whether that was for Angela Rayner’s controversial comments, John Bercow’s selfies with attendees, or hasty explanations over “people with cervixes”.
 
Beyond these distractions, important promises for Scotland were made, with £28bn pledged in what is essentially a Labour green new deal, and promises of “the most radical programme of devolution” the UK has ever seen. With Labour billed as “unapologetically pro-work and pro-business”, it is clear that Starmer is attempting to create a new New Labour, so to speak, but with reports of an eventful conference, it remains to be seen whether this moderate position will pay off.
 
The often-cited problem for Starmer is that he is neither here nor there – too left for some, too right for others. His stance often appears non-committal, and even sometimes contradicts those of his front bench and the wider party. Labour yesterday condemned the Aukus deal, despite Starmer’s support for the pact. Starmer even seems to be at loggerheads with shadow chancellor Rachel Reeves, whose speech promised to leave income tax intact, only for Starmer to later state that he wouldn’t rule out increases if necessary.
 
However it would seem Starmer is only exemplary of the contradiction and tension prevalent among key Labour players. Andy McDonald resigned from his position as shadow secretary of state for employment rights and protections yesterday “following the leadership’s refusal to back a £15 minimum wage and statutory sick pay at the living wage” – a move by the left designed to outmanoeuvre and undermine Reeves’ speech, according to former lord chancellor and Labour peer Lord Falconer.
 
For this reason, reports of the Labour conference are mixed, due to clashes between personalities and internal squabbles as Starmer attempts to mould the party.
 
The question to be asked moving forward is whether the gamble of more centrist policies will pay off and attract current Conservative voters, or simply alienate the left ahead of a general election in 2024, or possibly before.
 
According to an IPSOS Mori poll for the Evening Standardboth Boris Johnson and Keir Starmer are backed by 38% of voters, a levelling between party leader popularity not seen in years. However, while Labour may have the upper hand in the short-term amid shortages and price hikes, it remains to be seen whether the party will unite to make the most of the current climate long-term, or let inner tension destroy their chances at the polls.

News

Fuel prices reached their highest level in eight years on Sunday as the average price of a litre of petrol rose to 136.59p, up from 135.87p. Military personnel are now on standby to drive tankers, with the British Medical Association stating there is a “real risk” that NHS staff will be unable to work due to the crisis. (£)
 
A 36-year-old man has been charged with the murder of Sabina Nessa, whose death has reignited concerns surrounding violence towards women. Nessa was killed on the way to meet a friend in south-east London earlier this month. The suspect is due to appear in court today.
 
Germany’s Green and FDP parties are to start talks regarding who to join in a governing coalition. The SPD, led by Olaf Scholz, emerged as the biggest party with 25.7% of the vote. The CDU/CSU, with 24.1% voter support, may also attempt to form a coalition with smaller parties. (£)
 
Former SNP MP Tasmina Ahmed-Sheikh has been found guilty of professional misconduct during her career as a solicitor for a second time. She was found guilty of “recklessness by omission” and admitted six other breaches of financial rules during her time at now defunct Glasgow law firm Hamilton Burns.

Business and economy

Exploitation of agency workers is rife across European meat plants, with thousands paid 40% to 50% less than employed staff, according to an investigation by The Guardian. The £190bn industry has been found to be using a two-tier employment system with inferior pay and working conditions for outsourced staff in order to provide cheap meat.
 
Accountancy firm Grant Thornton has been fined £2.3m for failures in its audits of collapsed café and bakery chain Patisserie Valerie. A series of possibly fraudulent accounting errors were discovered in 2018. The company subsequently entered administration with the closure of 70 locations.
 
Energy company Octopus has been valued at £3.3bn, as much as British Gas-owner Centrica, after a £437m investment by Generation Investment Management, the climate-friendly fund founded by Al Gore. This follows news that Octopus has taken on the customers of recently collapsed rival Avro Energy.

Columns of note

Writing in the Financial Times, Martin Sandbu argues that the energy crisis facing Europe is the perfect opportunity to make progress in decarbonisation. Sandbu suggests that Europe needs to “galvanise green politics” in order to squash future spikes in the gas market and avoid future crises. (£)
 
Stuart Crawford discusses the risks posed to Glasgow by the upcoming Cop26 conference in The Scotsman, outlining how the police and security services have a “gargantuan task” in keeping the huge numbers of participants safe from terrorist and enthusiastic campaigners.

Cartoon source: The Times

Markets

What happened yesterday?

Increased energy prices bolstered the FTSE 100 yesterday amid an otherwise underwhelming performance.
 
The main index ended the session up 0.17% at 7,063.40, while the FTSE 250 fell 0.001% to 23,608.63. Sterling was up 0.23% against the dollar at $1.3711 and gained 0.46% on the euro to €1.1718.
 
In company news, Rolls-Royce gained 11.13% after the company won a £1.9bn deal to supply parts for the US Air Force for the next 30 years.
 
Shell rose 4.36% and BP increased 3.47% amid a three-year high in oil prices.
 
Cineworld advanced 11.88% ahead of the latest James Bond film hitting cinemas this week.

What’s happening today?

Finals

Blan Tech Grp
Close Bros
Ferguson
Smiths Group
Transense

Interims

Animalcare Grp
Barr (A.G.)
Card Factory
Digitalbox
Ergomed
Escape Hunt
Heiq
Immotion Group.
Itaconix Plc
Likewise Grp
Lords Grp Tr
Mode Global Ho.
Mortgage Ad
Nahl Group
Next Fifteen
S & U
Serica
Sourcebio Int

Trading announcements

Pennon

AGMs

Dwf Group
First Property
Globalworth
Ince Group
Kodal Minerals
Moonpig Gr
Purplebricks

Int. economic announcements

(07:00) GFK Consumer Confidence (GER)
(14:00) House Price Index (US)
(15:00) Consumer Confidence (US)

Source: Financial Times

did you know

Swedish-built cars (Saabs, Volvos) are specifically reinforced so that the occupants will survive if you hit a moose. (Source: @qikipedia)

Parliamentary highlights

House of Commons

The House of Commons is in recess. The House will next sit on 18 October 2021.

House of Lords 

The House of Lord is in recess. The House will next sit on 11 October 2021.

Scottish parliament 

No business scheduled.

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Fuel prices reached their highest level in eight years on Sunday as the average price of a litre of petrol rose to 136.59p, up from 135.87p. Military personnel are now on standby to drive tankers, with the British Medical Association stating there is a “real risk” that NHS staff will be unable to work due to the crisis. (£)
 
A 36-year-old man has been charged with the murder of Sabina Nessa, whose death has reignited concerns surrounding violence towards women. Nessa was killed on the way to meet a friend in south-east London earlier this month. The suspect is due to appear in court today.
 
Germany’s Green and FDP parties are to start talks regarding who to join in a governing coalition. The SPD, led by Olaf Scholz, emerged as the biggest party with 25.7% of the vote. The CDU/CSU, with 24.1% voter support, may also attempt to form a coalition with smaller parties. (£)
 
Former SNP MP Tasmina Ahmed-Sheikh has been found guilty of professional misconduct during her career as a solicitor for a second time. She was found guilty of “recklessness by omission” and admitted six other breaches of financial rules during her time at now defunct Glasgow law firm Hamilton Burns.

Business and economy

Business and economy

Business and economy

Business and economy

Business and economy

Business and economy