POLITICAL & COMMERCIAL INTELLIGENCE

We help companies affected by political change. To access our political and commercial intelligence service, email GUIDE’s Chief Executive on greig@theguideconsultancy.com


27FEB20: TRADE WITH THE REST OF THE WORLD

HMG has little choice but to take its new approach to EU talks if it wants trade agreements with other partners. To strike new trade deals beyond the EU, HMG must manage its own affairs – if the EU had ongoing legal control over HMG, any prospective UK deals with third countries would be impossible because an external body could alter the UK’s ability to comply at any stage.

20FEB20: THERE’S ALWAYS ONE

HMG is due to make fully independent representations at the WTO from 1st January 2021. Ahead of that, it has asked every country in the WTO to approve its General Agreement on Trade in Services (GATS) schedule – and every country duly has, bar one. A Freedom of Information request confirms that Russia has refused to sign off the UK’s schedule, saying it “looks forward to entering into consultations with the UK in order to reach a satisfactory resolution to this matter”. Given that Russia may be equally content with causing disruption or gaining concessions, there are strong incentives to quickly remove this spanner from the works.

13FEB20: A LITTLE LOCAL DIFFICULTY

For a while, we've been telling clients about a storm coming for Local Authority funding, as Councillors sign off increasingly ambitious and speculative commercial property deals to boost their spending power. The NAO has just published a report that says some Councils have seen “median gross external borrowing levels grow from 3% to 756% of their spending power from 2015-16 to 2018-19”. This is likely to become a big story soon.

28JAN20: 'EXISTENTIAL' TALKS

The BBC reports that Varadkar sees achieving a permanent UK-EU deal as an “existential” issue for Ireland. If he’s right, whatever happens he can’t walk away from talks. And if the EU decides to stand by Ireland, it can’t walk away from them, either. And if, whatever happens, the EU couldn’t walk away then the balance of power in Phase Two might not be as most commentators assume.

16JAN20: NO DEAL PREP PAUSED, NOT STOPPED

Media reports that HMG is ‘dismantling’ no-deal measures are wide of the mark. Civil Servants did tell colleagues that preparations explicitly for a 31st January exit could be stood down but HMG is keeping its options open for the end of 2020 – as implied by a new Ministerial Statement today relating to infrastructure vital to Operation Brock. No-deal planning is neither gone nor forgotten.

08JAN20: VDL vs HMG (AND THE COUNCIL)

The Commission President’s visit to London today is striking because her comments, ostensibly aimed at HMG, are actually a challenge to the EU Council. It can’t be repeated often enough that the Council, made up of Member States’ heads of government, has not given the Commission a mandate or goals for Phase Two – so the President’s effort today to set out the EU27’s red lines is really an attempt to grab control over the Brexit process. And it shows she has not managed to do so yet.

06JAN20: THE BARNIER BLUFF

The EU Council has not given Barnier a mandate for Phase Two talks yet. That means any statement from him is no more than the Commission trying to pressure Member States to take a particular stance - it is not their official position (yet).

16DEC19: LIFE UNDER A BIG MAJORITY

The drive for a big new domestic policy agenda, combined with an overwhelming majority, means HMG must watch out for any poorly drafted legislation that might not face the usual scrutiny and challenge. Without a careful eye, there will need to be a raft of Secondary Legislation in the latter part of 2020 to ‘tidy up’ any reforms introduced before the summer.

03DEC19: 24HRS OF CORBYN

Our analysis of the first 24hrs of a Corbyn government, starting with the exit poll on Thursday...

22.01 (12Dec19) Exit poll shows Labour, led by Jeremy Corbyn, likely to form a new administration.

Effect: International currency markets start to sell sterling. Short term domestic reaction likely to include interest rate increases that will affect mortgages and personal debt.

08.00 (13Dec19) Domestic stock market trading begins in earnest.

Effect: Shares sold in companies deemed at risk of nationalisation and in companies in their supply chain. Value of associated pension funds and wider economic confidence falls.

08.00-13.00 International reaction

Effect: ‘Five-Eyes’ intelligence partners review policy of sharing material with HMG.

14.00 Corbyn-led administration takes office

Effect: Political appointments made to previously non-political roles (senior Civil Service, BoE, etc).

Summary

Likely net effect at end of Day One: mortgages at higher risk of default; pension values and economic confidence decreased; international standing reduced; political independence of key institutions removed.

27NOV19: COUNCIL VS COMMISSION

The tension between the Commission and Council is often under-appreciated in the UK, but it will affect Phase Two of the Brexit talks. For example, it is striking that Barnier is already trying to set parameters by giving interviews to UK media outlets – even before the Council has given him an explicit mandate for the negotiations. 


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