The nationalisation of several utilities and rail franchises is a key plank of the UK Labour Party’s policy platform. To the dismay of implicated business leaders, it is also relatively popular, according both to the 2017 general election result and to separate polling. But how much would it cost - is Shadow Chancellor John McDonnell right to claim, as he did in a speech this weekend, that it would be “cost free”? Answering this means teasing out a number of related but distinct issues.
Capita’s profit warning is yet another sign of the growing fragility of the large, generalist outsourcing sector in the UK. That no bail-out was forthcoming for Carillion showed that such firms are not too big to fail. Indeed, the question seems to be whether they are too big to survive. This should imply significant opportunities for smaller, specialist firms, and therefore for investors, considering the raft of non-core asset sales the big outsourcers will undoubtedly be rushing into this year. There are, however, some considerations to be taken into account before jumping into the world of outsourced public services.
All eyes in the tech community in Europe and beyond are fixed on 25th May 2018 when the EU’s General Data Protection Agreement (GDPR) finally enters into force. But many are misunderstanding what is driving the agenda here - focusing on the apparent loathing of big tech in Brussels when, in truth, the European Commission is driven more by fear of failure.
Just under a month following his first attendance before the European Council, Poland’s new Prime Minister, Mateusz Morawiecki, has piqued Brussels’ interest in his young premiership with a major cabinet reshuffle. The move targets the most hard-line, nationalist ministers with portfolios core to the EU’s agenda: defence, foreign affairs, digital and the environment. The timing of this announcement – just before Morawiecki's meeting with Commission President Jean-Claude Juncker and vice-president Frans Timmermans – has been labelled by some as a canny attempt to appease Brussels. Should the reshuffle be interpreted in such a binary way?
For some time now, the two main political parties in the UK have been battling for the same group of voters who feel disenfranchised, left behind and have faced what some have dubbed the ‘lost decade’ of stagnant wage increases. Since the general election, however, this battle has intensified, and it is now the case that more weight is being given by both parties to policies with a clear retail value.
The latest sale process for Thomas International, a psychometric and aptitude assessment provider, is well timed to coincide with the UK government’s publication this month of its long-awaited careers strategy, which looks to rejuvenate a previously neglected area of education policy and could be a platform for growth in much-hyped ‘edtech’ provision.
One of the clichés in international cooperation is that national governments’ enthusiasm for sharing cost centres evaporates when talk turns to sharing profit centres. This explains the imbalance between joint investment in basic research and national commercial application of R&D, or the discrepancy between joint telecoms standards and ruthless national auctions for mobile phone spectrum. But it is the technocratic world of tax administration that traditionally exposes this most bluntly, with the need to raise revenue and to attract capital investment outweighing the desire for efficiency and fairness between national finance ministries. The final months of 2017 have delivered stark reminders that while the negative-sum game of tax secrecy may be ending, the incentives to play the negative-sum game of tax competition remain too strong for governments to resist.
Speaking at the One Planet Summit in Paris last week, EU Vice-President Valdis Dombrovskis proposed a “major revamp of financial supervision” to accelerate Europe’s transition to a low-carbon economy. The European Council supported these plans in Brussels last Thursday, including “pending legislative proposals” to “fully implement” Paris Agreement targets. While the details here seem vague, one key question is clear – how far must the EU go to address the persistent mismatch between investors’ short-term horizon and the long-term nature of sustainable projects?
Over the summer, it looked as if there might be a breakthrough in the long-stalled discussions over eurozone reform. Emmanuel Macron had been elected president of France, promising to overhaul the domestic labour market and make the country more economically competitive. German Chancellor Angela Merkel was quick to spot the signal and the opportunity. She suggested that she might in turn be amenable to some long-held French ambitions for the currency union.