POLITICAL & COMMERCIAL INTELLIGENCE

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29JAN19: CONSERVATIVES SET HARD DEADLINE OF EU ELECTIONS

The Conservative Party’s National Convention will be asked to support a resolution that Brexit will not be delayed “beyond the European elections”. HMG is keeping the option of a shorter delay, in the expectation it would be needed to get required legislation through Parliament.

17JAN19: EVERYTHING CHANGES, EVERYTHING STAYS THE SAME

If a General Election is held before Brexit, political dynamics could change dramatically even if the parties win roughly the same number of seats. Local Labour and Conservative associations could move to deselect incumbent MPs who are not seen to reflect activists’ views on Brexit – and the Speaker would need to be reselected and elected, too.

08JAN19: BIGGEST BREXIT BUST UP STILL TO COME

Consider this for a perspective on the EU economy: Italy, Spain and France are among the member states in breach of EU rules on budget deficits and national debts; the soon-to-end QE of the ECB printed cash equivalent to 25% of Eurozone GDP; and French banks have exposure to Italian debt that is equal to 11% of French GDP. If there is a significant downturn – or bailout – on the other side of the Channel, the biggest political question in the UK could quickly become “are we protected?”.

11DEC18: FOLLOW THE MONEY

Parliament’s EU Scrutiny Committee is highlighting the €2.4bn unaccounted for in the latest audit of EU spending. This follows a series of statements by the same Committee about HMG’s prospective financial commitment to the EU27 after 29th March 2019. This is out of the limelight now, but will come to the fore next year.

28NOV18: TREASURY PREPARES FOR NO DEAL

HMT’s new “Financial Services (Implementation of Legislation) Bill: Policy Note” sets out measures to avoid disruption in FS in the event the Withdrawal Agreement is rejected by Parliament. The note is important for two reasons: first, it implies pre-agreement with the EU27; and second, because if facilitates UK-EU alignment on FS until at least 2021 even if there is ‘no deal’.

26NOV18: PRIVATE INVESTMENT IN PUBLIC INFRASTRUCTURE

The IPA’s new infrastructure pipeline reveals the essential role private investment has in delivering public infrastructure. The IPA states “around 50% of the pipeline to 2020/21 is funded and delivered by the private sector, of which just over 35% is in the regulated sectors” – a fact which is often underappreciated in political debate.

22NOV18: ECJ RULING RISKS UK ENERGY SUPPLIES

HMG has issued a Written Statement concerning the ECJ’s decision to remove state aid approval for the UK Capacity Market (the mechanism for commissioning energy supplies). While National Grid says “they do not believe the judgment will cause any risk to security of supply this winter”, HMG confirms “the judgment removes State aid approval for the Capacity Market, preventing the UK Government from holding any capacity auctions or making any capacity payments under existing agreements until re-approval”.

02NOV18: WHY BRUSSELS JUMPED ON STORIES OF A DEAL

As we predicted last year, UK media now reports the EU27 have agreed a deal to keep FS cross-border trade even if there’s supposedly “no deal” on Brexit. This model is replicable – so Brussels wants to quash the story, in case Westminster stops fearing a cliff-edge that both sides would act to avoid…in any scenario.

01NOV18: SCOTTISH SPLITTERS

Since boosting its showing in Westminster, the SNP has been impressively disciplined in backing just about every line handed down from Edinburgh by Nicola Sturgeon. Ironically, that unity is now being tested on its very core issue – independence. The SNP Chair of the Scottish Affairs Committee is worried his leader’s backing for a second Brexit referendum risks showing how a future vote for Scottish independence could also be undone. If Sturgeon loses her grip on Westminster’s third party, Tory whips will spy an unexpected source of votes.

31OCT18: A CHANGING EU

Regardless of Brexit, eurozone countries have three options before them: maintaining the current system with its recurring structural difficulties; scrapping the single currency; or pursuing full economic integration. Whichever choice is made there are significant political implications – both for the EU27 and the UK.


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