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DAILY BRIEFING

DAILY BRIEFING

No room for Nicola

Written by Iain Gibson, associate partner
Edited by David Gaffney,  partner
26 July 2021 

Good morning,

Believe it or not, once upon a time the UK and Scottish governments worked quite well together.

Not at the nakedly political level, as both the SNP and ministers from Labour, the coalition and then the Conservatives all needed to put on a certain façade for their committed supporters. But behind the scenes, in terms of administration and policy, there was often cooperation.

For example, a UK cabinet minister secretly came north to better understand how certain areas of his portfolio brief were performing better in Scotland than in England, and Scottish government ministers apparently once went under the radar to learn more about how a particular education pilot down south was generating good results.

Those days are gone. Since the EU referendum, the SNP and the Conservatives have come to understand that their base is best mobilised by defining itself as the antithesis of the other. Between the 2016 and 2021 Holyrood elections the two administrations worked together only when absolutely necessary and, even then, with as little direct contact as possible.

In that context, the news that the UK government is seeking to sideline the Scottish government, and Nicola Sturgeon in particular (£), during the forthcoming COP26 summit in Glasgow should be no surprise. But is it harsh? Yes. Is it justified? Well, in some ways you could argue it is.

COP26 is being hosted, planned, executed and paid for by the UK government. It is a critical global event, with little time or space for domestic politics. For example, the fallout from the Arab Spring was still reverberating around the Middle East when Qatar hosted COP18 in 2012, and Argentina welcomed COP4 back in 1998 in the midst of a full-blown depression, from which it has never really recovered.

On neither occasion did the situation at home, and the accompanying local political tussles, overshadow the main show. The UK government’s argument that all devolved nations will be treated the same does ignore the fact that the gathering actually takes place in one of those devolved nations, but it is consistent in focusing on the bigger picture.

Also, the first minister bears some responsibility for the UK government’s reluctance to hand her a place at the top table. Whatever our views on the initial struggles by Boris Johnson’s team to manage the pandemic, Sturgeon’s pre-empting of confidential discussions in the early days and attempts to seemingly work against Westminster during the heights of the crisis were hardly any more helpful.

They caused sufficient outrage and have played a big part in creating a determination in London to deny her or her government a big role at COP. Some UK government figures point out, perhaps reasonably, that the first minister will use any opportunity to advance the cause of independence, which is not at all why the world is descending on Scotland’s largest city in November.

It’s possible that a compromise will be struck somewhere. The UK government has switched tack and, as evidenced by recent appointments such as the excellent Mark McInnes to advise the prime minister on Scotland, will likely be more deft and nimble in its dealings with Holyrood.

Equally, Sturgeon is smart enough to know that picking this occasion to complain about a lack of respect being shown to her or to Scotland will mostly be met with a shrug of the shoulders by international power players, before they resume their discussions. With most of the cards here being held south of the River Tweed, the first minister might have to accept whatever limited role may eventually be offered to her.

News

The Scottish government is set to miss its target of having all 40-49 year olds double-jabbed by today, with data showing that around 170,000 in that age group have been missed. The next target set by Nicola Sturgeon is to have all 30-39 year olds receive both vaccines by 20 August. 

Dr Anthony Fauci, the chief medical adviser to the US president, has told CNN that he thinks the country is headed in the wrong direction, as Covid-19 cases spike in areas with low vaccination rates. He added that health officials were considering revising mask guidance for vaccinated Americans, in order to curb case numbers.
 
Tunisian president Kais Saied has sacked the country’s prime minister, following violent protests over the government’s handling of the Covid pandemic. The move has provoked a split reaction, with some citizens accusing him of harming democracy and others celebrating on the streets.
 
The number of new Covid-19 cases in the UK has fallen for five days in a row for the first time since February, with 29,173 recorded yesterday, down from 48,161 on 18 July. There appears to be a cautious consensus that this is good news, although we are still waiting for data that includes the impact of the 19 July easing of restrictions.

Business and economy

Sources have told the Financial Times that the UK government is looking for ways to remove China’s state-owned nuclear energy company from all future power projects. This includes the consortium planning to build the new £20bn Sizewell nuclear power station in Suffolk. The move follows the deterioration in relations with China since the onset of the pandemic. (£).

Digital financial service provider Zopa has hired JP Morgan to advise on its last funding round before it floats on the stock market. The company is looking for a £100m capital injection.

The Financial Times reports that the SoftBank Vision Fund’s 20.1% stake in Chinese ride-hailing app Didi Chuxing is now worth $7.8bn, which is $4bn less than SoftBank paid in 2019. Didi has come under pressure from the Chinese government and was recently punished for alleged data security lapses after it listed on the NYSE. The Chinese administration is now scrutinising other SoftBank investments into its tech sector. (£)

Columns of note

Writing in The Times, James Kirkup draws parallels with the initial hostile reaction to the London congestion charge and the contemporary acceptance that it was a good thing, with many of the tough measures needed to help the UK achieve a net-zero economy. He cites the idea of charging people for the miles they drive as an example, adding that recent history has demonstrated when there is an increasing market need for something – such as renewable energy – businesses have often innovated to make their offers cheaper. (£)

The editorial board of the Financial Times offers a mixed view on Joe Biden’s first six months as US president. Whilst the board believes he can be pleased with his efforts to re-establish the country on the global stage, they warn that he needs to do more to mobilise the free world against China and also to strike a better balance between leading by example and accepting the realpolitik of having to work with some undemocratic nations. (£)

Cartoon source: The Times

Markets

What’s happening this week?

There is a litigious flavour to the beginning of the week, with Monday being the deadline set by a court in Brussels for AstraZeneca to meet its contractual obligations to supply the first 15 million of 50 million vaccine doses ordered by the EU. There will be a ¢10 fine per dose not delivered.

Revolution Day is also being marked in Cuba, with the country’s government in a tricky position given their current troubles.

We have the latest earnings announcements from Barclays and Deutsche Bank on Wednesday, with Credit Suisse set to follow a day later. The Swiss lender is currently on the back foot following the closure of $10bn of funds linked to scandal hit Greensill Capital.

Big Tech firms have taken in recent years to publishing earnings figures all around the same time, and this week we have Apple, Microsoft, Amazon, Alphabet and Facebook all reporting, with analysts expecting large revenue jumps compared to Q2 2020.

On Friday, Sir Simon Stevens will step down as chief executive of NHS England – his last year in post probably not being what he envisaged when he took on the role back in 2014.

What’s happening today?

Interims Science Group Trading Announcements Cranswick AGMs Cranswick Deepverge Gresham House Strategic National Grid Oakley Tinybuild Inc Int. Economic Announcements (07:00) Import Price Index (ger) (15:00) New Homes Sales (US)
Source: Financial Times

did you know?

The Dalai Lama is frightened of caterpillars.

Parliamentary highlights

House of Commons

The House of Commons is in recess. The House will next sit on 6 September 2021.

House of Lords 

The House of Lords is in recess. The House will next sit on 6 September 2021.

Scottish parliament 

The Scottish parliament is in recess until 30 August but will be recalled on 3 August for Covid updates.

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