Com­mons threat to jobs

Daily Mail - - City & Finance - Alex Brum­mer CITY EDITOR

THE time is fast ar­riv­ing when self-re­gard­ing MPs must look be­yond the West­min­ster scrum and fo­cus on the dam­age they are do­ing to pros­per­ity and jobs in their con­stituen­cies.

A big sur­prise since the ref­er­en­dum was how the UK re­sisted the down­turn that had been fore­cast. This is partly down to the Bank of Eng­land, low in­ter­est rates and help for the banks.

But there also has been a con­vic­tion in busi­ness that, at some point, the Gov­ern­ment would man­age to ex­tract it­self from the Brexit trea­cle and get on with run­ning the coun­try. In­stead, West­min­ster has trav­elled back­wards and ‘can do’ has be­come ‘won’t do’. The con­se­quence is un­help­ful.

The pur­chas­ing man­agers’ in­dex (PMI), a good proxy for what is go­ing on in busi­ness, omi­nously slipped to­wards a re­ces­sion sig­nal in March. The main fac­tor was the ser­vices sec­tor, nearly 80pc of the econ­omy, which fell to its low­est level since July 2016 in the af­ter­math of the vote.

As was the case then, the main driv­ing force is po­lit­i­cal un­cer­tainty, which is why the Com­mons really needs to act to end the fes­ter­ing and de­liver a Brexit deal.

The re­search or­gan­i­sa­tion Bri­tain Thinks has found that six out of ten peo­ple are show­ing in­creas­ing anx­i­ety as a re­sult of the Brexit co­nun­drum. That sounds ex­treme.

But there is no doubt that the pub­lic is both fas­ci­nated, ap­palled and con­fused about the stale­mate. If air­lines and travel com­pa­nies are to be be­lieved, it has made the con­sumer more cau­tious about book­ing hol­i­days for lo­gis­ti­cal rea­sons re­lat­ing to pass­ports and due to con­cern about mak­ing spend­ing de­ci­sions in ad­vance.

The Bri­tish stum­ble co­in­cides with a wors­en­ing global out­look.

Ahead of next week’s meet­ing of the In­ter­na­tional Mone­tary Fund in Washington, man­ag­ing di­rec­tor Chris­tine La­garde says she ex­pects growth to slow in 70pc of mem­ber coun­tries this year after two years of im­prove­ment. That does not im­ply a slump but might make it more dif­fi­cult for the UK to es­cape from a slow­down.

The big hope is that there is pent-up busi­ness in­vest­ment which will be re­leased should the po­lit­i­cal fog dis­ap­pear.

The very worst out­come for the econ­omy, but not nec­es­sar­ily the pound, would be an ex­tended ne­go­ti­a­tion which would leave ev­ery­thing up in the air.

If there is a sil­ver lin­ing, it is that the PMI has a ten­dency to be too down­beat when un­cer­tainty is high. A flex­i­ble UK econ­omy means it is swift to re­bound.

Nu­clear op­tion

BAB­COCK has moved with alacrity in find­ing a re­place­ment chair­man fol­low­ing the re­tire­ment of vet­eran en­gi­neer Mike Turner after 11 years at the de­fence group.

The choice of for­mer Shell ex­ec­u­tive Ruth Cairnie is a plus for women in se­nior cor­po­rate roles but will barely make a dent in the lack of gen­der di­ver­sity among Bri­tain’s lead­ing com­pa­nies.

Cairnie comes with some ex­pe­ri­ence of the en­gi­neer­ing and de­fence sec­tors, as chair­man of the pay com­mit­tee at Roll­sRoyce. She ar­rives at a sen­si­tive time.

More than 70pc of its in­come comes from the de­fence sec­tor, in­clud­ing main­te­nance of the Rosyth and Devon­port dock­yards, and Bab­cock is re­spon­si­ble for keep­ing Bri­tain’s nu­clear sub­ma­rine fleet afloat.

In spite of this, the group has been brack­eted with the trou­bled out­sourc­ing sec­tor and sub­jected to crit­i­cism by a mys­te­ri­ous ginger group known as Boat­man Cap­i­tal. It is thought that the crit­i­cism may be as­so­ci­ated with dis­si­dent for­mer em­ploy­ees.

Chief ex­ec­u­tive Archie Bethel has been at the tiller for two years and, among other things, has been re­spon­si­ble for global ex­pan­sion, in­clud­ing main­te­nance of the An­zac naval force in Aus­tralia. At 66, he is seen as a short-term ap­point­ment and Cairnie must find a re­place­ment.

She also needs to re­store con­fi­dence in the shares, down 50pc from 2017 highs. Not much to do, then.

Easy lis­ten­ing

BOOM­ING rev­enues from Latin America and Asia helped the re­cov­ery for the global mu­sic in­dus­try in 2018. Sales climbed by 9.7pc to £14.4bn.

Growth was driven by stream­ing which now ac­counts for 47pc of rev­enues. The bright­est spot in Europe was the UK, which over­took Ger­many as the Con­ti­nent’s big­gest mu­sic mar­ket, with Ed Sheeran among lead­ing per­form­ers.

That is an­other re­minder of cre­ative Bri­tain’s con­tri­bu­tion to output.

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