Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Décor and decorum

Written by Charlie Clegg, senior associate 
Edited by David Gaffney, partner
22 January 2021

Good morning,

I can’t help but admire Joe Biden. I’ve spent six months trying to find a plasterer and he’s redecorated the Oval Office in less than 24 hours. In come busts of Rosa Parks and Cesar Chavez; out go the forces’ flags and the portrait of Andrew Jackson. Out too goes a curious stumbling block in the special relationship: the bust of Winston Churchill. 

President Obama’s decision to remove the bust excited a negative response from the then-mayor of London, Boris JohnsonHaving flitted since then himselfthe current occupant of Number 10 Downing Street is eager to appear calm in the face of President Biden’s interior design choices. 

Symbols nevertheless matter and while American politics is baffling, interior design is a universal language: one that President Biden speaks. The UK government too is speaking the language of symbols. It has declared war on ‘woke’: a word that sprawls in the way of sensible discussion like a cat across a keyboard. 

The prime minister’s opponents and interrogators have found a ready dichotomy between this strategy and the need to establish a positive relationship with the new, liberal president. Commentators can now claim the UK government’s culture war has cost the special relationship. 

Except it hasn’t. In external relations, a Biden presidency represents a move away from caprices and Twitter outlashes and back to diplomatic norms. President Biden’s actions are making the US more like one of its developed allies, more like the UK. Biden’s determination to tackle climate change is just one area where he is far closer to the UK government than his predecessor was. 

The UK government’s culture war strategy is wrong for other reasons: namely, it risks a legacy of division and acrimony. It is also a brazen attempt to distract voters with an imagined opponent. Friedrich Engels called this false consciousness. Given the director of Number 10’s policy unit, Munira Mirza, is an erstwhile Trotskyite, that may not be a coincidence. 

We’re forever telling and being told simple but false stories to make sense of more complicated realities. We are moving into a time after Trump, after Brexit, and – however slowly – after Covid. In this world, the reality of the UK-US relationship will be defined by factors more complicated than the whims of one man, regardless of how he decorates his office.

News

A leaked document from the UK government’s department of health has proposed giving £500 to those who test positive for Covid-19 in order to encourage them to self-isolate. The scheme, projected to cost £453 million, is due to be discussed at an operations committee chaired by chancellor of the Duchy of Lancaster, Michael Gove. A further 1,290 people in the UK have died within 28 days of a positive coronavirus test. There have been another 37,892 cases. Both these figures represent declines on recent highs. 

Police have recovered the body of a drowned man in Cardiff as Storm Christoph causes widespread flooding in Wales western England. In Northwich, Cheshire, the floods have destroyed a bridge, stranding the residents of a care home. Last night, there were 167 flood warnings across England, of which three were severe ‘danger to life’ warnings. In western Scotland, northwest England, Northern Ireland and most of Wales, three yellow weather warnings for ice will remain in place until 10am this morning. (£) 

In the US, Senate Republican leader, Mitch McConnell, has argued for a delay in Donald Trump’s impeachment trial in order to give the former president time to prepare. Under the Republicans’ plans, Trump’s trial would not begin until the middle of next month, while Democrats are keen to begin proceedings as soon as possible. McConnell is locked in negotiations with his Democratic counterpart, Chuck Schumer.  

Business and economy

Large businesses have complained of missing out on £4.6 billion in state support after the UK government decided to keep to some EU state aid rules. Last year, the UK government agreed to a European Commission rule which blocked grants of more than €4 million to any one business. The government has kept to the rule despite the UK’s withdrawal from the bloc earlier this month. Some large business, including retailers, have already reached this limit. (£) 

French transport minister, Jean-Baptiste Djebbari, has been in discussion with his UK counterpart, Grant Shapps, over how to support Eurostar. The cross-channel train operator has seen footfall plummet over 95% on pre-pandemic levels. Djebbari has expressed his government’s willingness to help the operator. The UK department for transport confirmed it has been in negotiations with Eurostar but no agreement has been reached yet. 

Nissan has confirmed its Sunderland plant is safe in the long term now that the UK and EU have reached a trade deal. The Japanese vehicle manufacturer also intends to move additional battery production to the plant in the north east of England, where it employs 6,000 and supports 70,000 supply side jobs. Nissan has, however, been forced to pause one of its Sunderland production lines due to supply issues. 

Columns of note

In the Financial Times, David Pilling argues that unequal distribution of vaccines will come back to haunt wealthy nations. Pilling contends that unless the vaccine is spread around all who most need it, new strains of Covid will continue to develop and spread. While schemes like Covax improve poorer nations’ access to vaccines, Pilling suggests pharmaceutical companies should also share intellectual property to aid the manufacture of vaccines. (£)

In The Daily Telegraph, Fraser Nelson looks at how closing borders to new Covid strains – unthinkable last spring – has become increasingly attractive to policymakers. He notes how UK ministers and opposition politicians increasingly admire Australia and New Zealand’s tough border rules. He argues similar policies could result in a “Fortress Britain” which is relatively free within its borders but barricaded from other countries. (£)

Cartoon source: The Daily Telegraph

Markets

What happened yesterday?

Global shares reached new heights as investors welcomed President Biden’s announcement of a $1.9 trillion stimulus package.

On Wall Street, S&P 500 stock index edged slightly higher, while the tech-heavy Nasdaq Composite climbed 0.6% on Wednesday’s record highs. The FTSE All-World index of global shares finished 0.3% higher for the day.

The benchmark Stoxx 600 index closed flat and London’s FTSE 100 lost 0.37% at 6,715.42.

As optimism over the UK’s vaccine roll-out continues, Sterling rose as much as 0.7% against the dollar, crossing $1.37: its highest level since April 2018.

In company news:

Sigma Capital Group reported a pre-tax profit of £2.32 million. The private rented housing sector provider’s 2.66p dividend is one of the highest in the industry. Its consistent performance is proving attractive to investors.

Sensyne Health has reported a pre-tax profit of £13.81 million, up 40%. The clinical AI company’s profits have been driven by deals with UK health boards and by its expansion into the US market.

IG Group Holdings reported a pre-tax profit of £231.3 million, an increase of 129%. The group’s success comes alongside news of its $1 billion acquisition of US financial network, Tastytrade.

What’s happening today?

Trading announcements
Computacenter
Record
Theworks.co.uk.

AGMs
Character
Ironveld
Theworks.co.uk.

GMs
Egdon Resources
Salt Lake Pot

UK economic announcements
(07:00) Retail Sales
(07:00) Public Sector Net Borrowing

Int. economic announcements
(15:00) Existing Home Sales (US)

Source: Financial Times

did you know?

        The world’s first bus service was founded in 1662 in Paris by the philosopher and mathematician Blaise Pascal. 

Parliamentary highlights

House of Commons

No scheduled business

House of Lords 

No scheduled public business

Scottish Parliament 

No scheduled business

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