Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

The September reset

Written by Javier Maquieira, senior associate 
Edited by Iain Gibson, associate partner
6 September 2021

Good morning,

September is, in many ways and for many people, the real new year. It marks not only the return to school for much of the UK, but also a time of change in our routines, buying patterns, and overall goal setting. With the summer holidays and parliamentary recess now officially behind us, there’s value in looking ahead to the events that are likely to make the headlines in this month of renewal.
 
First off, in Scotland, the first minister is expected to set out her programme for government 2021-2022 at Holyrood on Tuesday. Plans for a second independence referendum are projected to be a key focus of Nicola Sturgeon’s announcement, along with measures to assist “a green, fair economic recovery with a just transition to net zero”. This includes proposals to increase NHS spending to £2.5bn and legislation to establish a National Care Service.
 
Ahead of the announcement, business leaders have urged the first minister to put economic growth “front and centre”, as recovery gains remain “extremely fragile”. Included in their asks are scrapping the SNP’s controversial workplace parking tax, reforming non-domestic rates, and finding more ways to reduce costs.
 
In Brussels, the president of the European Commission, Ursula von der Leyen, will deliver her state of the union on 15 September, when she will present the European Union’s priorities for the year ahead, with a focus on the economic recovery from the pandemic. Von der Leyen’s address is also set to double down on the commission’s flagship initiatives: the European Green Deal and Digital Strategy.
 
Interestingly, the state of affairs in Afghanistan has revived the old idea of a European, permanent military force in recent days. Although some member states and critics have opposed the concept on the basis that it would stand as an example of nation-building, the EU’s chief diplomat, Josep Borrell, thinks the time is ripe after the “deficiencies” in the bloc’s autonomy from the US were exposed last month. Expect any mention of increased military cooperation among member states in von der Leyen’s address to be picked up.
 
Europeans, and most of the world, will then turn their attention to Germany towards the end of the month. Sunday, 26 September marks the end of an era: Angela Merkel’s. The Bundestag election, which has evolved into a three-way battle to succeed ‘Mutti’ between the CDU/CSU, the SPD, and the Greens, will eventually beget a new leader after 16 years of Merkelite dominance.
 
Finally, across the pond, the 20th anniversary of the September 11 terrorist attacks on the US will take place next Saturday, when President Joe Biden plans to visit all three sites to mark the event that prompted the country’s longest war.
 
Ahead of the memorial date, Biden has ordered the Department of Justice to review documents from the FBI’s probe into the attacks for declassification and release, which many families believe will show the federal agency either lied about or destroyed evidence linking Saudi Arabian officials to the attacks.
 
This handful of highlights heralds a period of fundamental change as we reset and begin the new term. As it turns out, however, much of our looking ahead will involve looking back, too.

News

The prime minister is facing criticism from members of his cabinet and MPs over plans to raise national insurance contributions, to increase funding for the NHS and overhaul social care. The three-year funding settlement, which is due to be announced on Tuesday, would break Conservative manifesto commitments on tax and pensions and be potentially loaded on to younger and lower-paid workers.
 
The Taliban claims it now controls the whole of Afghanistan after overcoming opposition forces in Panjshir province; the last area being held by resistance forces. The opposition group, National Resistance Front (NRF), has said the “Taliban’s claim of occupying Panjshir is false” but welcomes proposals for a negotiated settlement to end the fighting.
 
A former aide to the Prince of Wales has temporarily stepped down from his role as chief executive of The Prince’s Foundation amid claims that he helped secure an honour and British citizenship for a wealthy Saudi donor. Michael Fawcet and aides close to the prince are alleged to have coordinated the application process for the CBE and provided official letters in support of it.

Business and economy

Economists and industry groups have warned that “a perfect storm for construction” is putting the UK’s economic recovery in doubt. The rising cost of building materials, bottlenecks in global shipping, and shortages of lorry drivers are forcing many smaller building companies – which make up around 90% of the sector – to put projects on hold.
 
Marks & Spencer has raised the prospect of “significant disruption” to food imports from Europe because officials in charge of issuing export health certificates do not work at weekends in some EU countries. The British retailer has called on the UK government and the EU to show some “common sense” amid concerns over the strict border controls due to come into effect next month. (£)
 
Research by accountancy firm PwC suggests that more than 8,700 chain stores closed in high streets, shopping centres, and retail parks in the UK in the first six months of 2021. Although the number of closures has fallen year on year, that is an average of nearly 50 outlets a day, as a result of the pandemic and changing shopping habits.

Columns of note

Henrietta Moore writes in the Financial Times that in order to “build back better” and “level up”, the UK and US governments need to reimagine what prosperity looks like beyond measures such as GDP and physical infrastructure. Instead, they should focus on rebuilding the connection between macroeconomic policy and the daily struggles of people, she posits. (£)
 
Why is climate justice a key talking point in the context of COP26? Writing in the Scotsman, Ilona Amos turns her attention to the underprivileged populations and geographically vulnerable regions that are collectively responsible for creating only a tiny fraction of global emissions and having enjoyed little of the mass consumption that has caused them. She does so ahead of the Glasgow Climate Dialogues beginning today, which will hear experiences and suggested solutions from people living in the southern hemisphere.

Cartoon source: The Times

Markets

The week ahead

On Thursday, HMRC will update on the UK government’s spending to support jobs during the pandemic. There will be an update on the British jobs market that same day with the publication of a report from the Recruitment and Employment Confederation and KPMG.
 
Meanwhile, the coronavirus pandemic’s impact on European economies will be highlighted in a series of purchasing managers’ index (PMI) reports, as well as updates on factory orders and retail sales from Germany and Italy, respectively.
 
This week also features an update on inflation and consumer borrowing in the US, and the jobs market in Canada.
 
In company news, Wm Morrison reports its interim results on Thursday, where some of the discussion is expected to revolve around additional profit generation for the British supermarket group’s new owners, following the bidding war between US private equity firms.

What’s happening today?

Interims
Belluscura
Vector Capital

AGMs
Gore Street En.
Totally

UK economic announcements
(09:30) PMI Construction

Int. economic announcements
(07:00) Factory Orders (GER)

Source: Financial Times

did you know

“Goodbye” comes from the term “Godbwye,” a contraction of the phrase “God be with ye”. (Source: @UberFacts.)

Parliamentary highlights

House of Commons

Oral questions
Education (including Topical Questions)
 
Legislation
National Insurance Contributions Bill: Remaining Stages
 
Motions
Pensions – Pensions Regulator (Employer Resources Test) Regulations 2021
 
Constitutional Law – Environmental Authorisations (Scotland) Regulations 2018 (Consequential Modifications) Order 2021
 
Adjournment
Cost of medicinal cannabis

House of Lords 

Oral questions
Security situation in Afghanistan
 
Improving the training and remuneration of staff in social care residential services
 
Negotiating bilateral agreements with EU member states for the return of asylum seekers arriving in the UK
 
An international moratorium on deep seabed mining
 
Legislation
Environment Bill – report stage (day 1)
 
Short debate
Placing the House of Lords Appointments Commission on a statutory basis

Scottish parliament 

No business scheduled

Share this post

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