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Our greatest mistake?

Written by Javier Maquieira, senior associate 
Edited by David Gaffney, partner
7 October 2020

Good morning,

Few nature documentaries have captured my imagination like Sir David Attenborough’s A Life on Our Planet. The 93-year-old’s “witness statement”, now streaming on Netflix, is an emotional but factual telling of the human impact on the natural world during Attenborough’s lifetime. Now that our imprint is truly global, he warns unequivocally, it is bound to effect irreversible change through one-way doors that will make our world a more inhospitable place to live.
 
Attenborough is essential viewing yet again as he makes a call to arms on behalf of our planet, to restore the biodiversity we have removed and become a species in balance with nature once again. The extent to which this is attainable will ultimately (and partly) depend on the ability of leaders to see beyond short-term political gain.
 
Boris Johnson’s speech to the virtual Conservative conference yesterday was an attempt at that. In it, the prime minister pledged to make the UK the “Saudi Arabia” of wind power and a world leader in green energy, promising £160m of investment in ports and factories to increase electricity generation from offshore wind.
 
Meanwhile, on the continent, lawmakers at the European parliament will vote today on a landmark bill to make the European Union’s climate targets legally binding. It comes after the European commission proposed a 2030 emissions cut of “at least 55%” against 1990 levels – an economically feasible target which would require tougher policies for many sectors, including tighter car emissions standards and higher carbon costs for industry and airlines.
 
Further East, the world’s biggest climate polluter, China, recently vowed to reach “peak carbon” before 2030 and to drive down emissions to virtually zero by 2060. According to calculations by the Climate Action Tracker research consortium, if China were to succeed, it would effectively reduce global heating forecasts for 2100 by between 0.2 to 0.3 degrees Celsius.
 
The question as to whether the US will accept the challenge implicit in these commitments elsewhere remains unanswered, however. Last week’s noxious presidential debate saw Donald Trump and Joe Biden at odds on this issue as with all others, albeit neither candidate favours adopting the ‘Green New Deal’. Biden’s vision for tackling climate change is tied to the economic recovery from the Covid-19 crisis, via a $2tn plan for clean energy infrastructure and other climate solutions, to be spent as quickly as possible in the next four years.
 
While these are all welcome pledges, the fact remains that the cash promised by world leaders to pay for the United Nation’s Sustainable Development Goals falls short every year, by some $2.5tn. In the words of Sir David Attenborough, “anything that we can’t do forever is, by definition, unsustainable”. Failing to recognise that now will be our greatest mistake.

News

Scotland’s first minister, Nicola Sturgeon, is expected to announce new restrictions aimed at slowing a surge in coronavirus cases in the country today. Although Sturgeon has already signalled Scotland will not return to full lockdown, the measures could see travel restrictions imposed in areas with higher levels of the virus and tighter controls for pubs, restaurants and other hospitality venues.
 
Hospital admissions in England have increased by almost 25% in one day, official data shows. There were 478 new hospital admissions on Sunday, compared to a total of 386 people admitted on Saturday, which marks a four-month high. On Tuesday, a total of 2,783 patients were in English hospitals with Covid-19, an increase from 1,881 a week earlier.
 
In related news, the UK government’s scientific advisers have called for “urgent and drastic” action as surging coronavirus infection rates put Britain on lockdown alert. Cases and deaths have doubled in 11 days to 14,542 and 76, respectively. (£)
 
Supplies of vital NHS equipment, including Covid-19 swabs and tests, are at risk after Swiss pharmaceutical company Roche reported that problems associated with a move to a new warehouse were causing a “very significant drop in its processing capacity”. The affected warehouse is the company’s only distribution centre in the UK and covers the whole country. Roche has said it will prioritise the supply of Covid-19 tests, but that it could take two weeks to resolve the issue.

Business and economy

US president Donald Trump has said he plans to end negotiations with the Democrats over a Covid-19 relief bill, adding he would only resume talks after the election. Elected representatives from both parties had hoped for another round of budget stimulus relief spending to pass before the country goes to the polls on 3 November, but now the president has instructed Republican Senate majority leader Mitch McConnell to focus efforts on confirming his Supreme Court nominee instead.
 
The head of the International Monetary Fund (IMF), Kristalina Georgieva, has warned against the premature withdrawal of government support measures, pointing to a fragile recovery from the Covid-19 crisis since the spring. Georgieva‘s speech comes a week before the publication of the IMF’s World Economic Outlook, which is set to predict the deepest slump in the global economy since the second world war.
 
Ikea is set to open 50 new stores worldwide – including in the UK – as people seek to make home improvements and despite more shopping taking place online. The decision comes as the Swedish furniture store giant reported a four per cent fall in sales to €39.6bn (£36bn) for the year to August, a better-than-expected result given lockdown measures.

Columns of note

In the Financial Times, Laura Noonan looks at the rise of Jane Fraser as Citigroup’s soon-to-be chief executive as she becomes the first woman to lead a major Wall Street lender. Although she argues that Fraser’s elevation increases the likelihood of other women becoming chief executives, Noonan also warns that reducing Fraser to her gender, rather than her professional records, is patently unfair, as women in leading financial services firms seek to have their competences and skills judged against men on a level playing field. (£)
 
Eliot Wilson fact checks Boris Johnson’s energy pledge at the virtual Conservative conference, arguing that to reach the prime minister’s offshore wind energy target by 2030 we are looking at the prospect of more or less doubling capacity within a decade. Although the signs are promising and some of the attractions are obvious, Wilson maintains that the UK government must encourage and host bigger ESG projects to attract much greater investment and therefore meet its ambitious targets. “Rhetoric about windmills”, he concludes, “won’t get us there”.

Cartoon source: The Times

Markets

What happened yesterday?

London stocks finished higher on Tuesday after US presidential hopeful Joe Biden took a 16-point lead over Donald Trump in a new poll. The FTSE 100 ended the session up 0.12% at 5,949.94, while sterling was weaker against both the dollar by 0.18% at $1.2955 and the euro by 0.21% at €1.0991.
 
Across the Atlantic, the S&P 500 closed 1.4% down and the tech-heavy Nasdaq dropped 1.6% as President Trump changed course on stimulus talks.
 
In company news:
 
Victrex was 1.25% lower despite reporting slightly better than expected sales for the financial year ended on 30 September.
 
BHP lost 1.42% after the metal and mining company signed an agreement with Hess Corporation to acquire an additional 28% working interest in the Gulf of Mexico development Shenzi.
 
Watches of Switzerland surged 25.94% after the watch retailer lifted its full-year guidance, driven by better-than-expected second quarter US and UK revenues.
 
Oxford Biomedica was ahead 0.71% following government approval for a fourth manufacturing suite at its Oxbox facility.
 
Wagamama owner Restaurant Group grew 4.49%, despite reporting a wider half-year pre-tax loss of £234.7m.

What’s happening today?

Interims
Tesco

AGMs
(07:00) Industrial Production (GER)
(12:00) MBA Mortgage Applications (US)
(15:30) Crude Oil Inventories (US)

Source: Financial Times

did you know

In 1913, the shipbuilders of Glasgow launched an average of one ship every day. (source: @qikipedia)

Parliamentary highlights

House of Commons

Oral questions
Scotland
 
Prime Minister’s Question Time
 
Ten Minute Rule Motion
Conveyancing Standards – Marco Longhi
 
Legislation
Pension Schemes Bill [Lords]: Second Reading
 
Motion
Motion to approve Regulations related to Public Health following the Secretary of State’s earlier announcement
 
Adjournment
Policing in south west London – Sarah Olney

House of Lords 

Oral questions
Shortage of social care workers for residential care homes and domiciliary care – Lord Dubs
 
Value for money to the taxpayer of building the new Fleet Solid Support Ships in the UK or overseas – Lord West of Spithead
 
Cost to the taxpayer of requiring food business operators in England to display the relevant food hygiene rating score at the entrance to premises – Lord Rooker
 
Conflict in the Nagorno-Karabakh region – Baroness Falkner of Margravine
 
Orders and regulations
Health Protection (Coronavirus, Collection of Contact Details etc and Related Requirements) Regulations 2020 – Lord Bethell
 
Health Protection (Coronavirus, Restrictions) (Birmingham, Sandwell and Solihull) Regulations 2020 – Baroness Penn
 
Immigration Skills Charge (Amendment) Regulations 2020 – Baroness Williams of Trafford

Scottish Parliament 

Portfolio Questions
 
Scottish Government Debate
Legislative Consent to the Internal Market Bill
 
Approval of SSIs (if required)
 
Members’ Business
S5M-20652 Brian Whittle: Future Options for South West Scotland Transport Infrastructure

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