Commons threat to jobs
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.
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.
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.