Scottish court hears challenge to suspension of parliament
Scotland’s Court of Session is today hearing arguments in a challenge by more than 70 UK politicians against prime minister Boris Johnson’s plans to suspend parliament ahead of Brexit, writes Mure Dickie, our Scottish correspondent.
Judge Lord Doherty is expected to issue a decision on the parliamentarians’ petition on Wednesday, with the almost inevitable appeal to be heard by Court of Session’s higher Inner House later this week.
The Scottish government said on Monday that its top law officer had lodged an application to join the petition against Mr Johnson’s plan to prorogue parliament.
James Wolffe, lord advocate, has also applied to join a judicial review of the planned suspension in England that will be heard on Thursday
The parliamentarians argue that proroguing parliament in order to make it more difficult to block a no-deal Brexit would be both illegal and unconstitutional.
The prime minister insists that prorogation will still leave parliament ample time to debate the terms of Brexit before the UK leaves the EU on October 31. A final decision on the legal challenges is likely to be made by the UK Supreme Court.
Reports EU not taking backstop negotiations seriously rankle Number 10
Downing Street is particularly angry this morning about reports that negotiations with the EU to scrap the Irish border backstop are not being taken seriously, reports the FT’s Sebastian Payne.
In an in depth article about the state of Brexit, with plenty of behind the scenes detail, The Telegraph reports that Dominic Cummings, the prime minister’s chief adviser, described the process of trying to strike a new deal as a “sham”, something Number 10 sources describe as a “lie”.
In response to the reports, a Downing Street spokesperson said:
Dom has not said this. He does not believe this to be the case. Such anonymous and unsubstantiated claims should not be printed. We note that these claims were not put to us in advance by the author, denying us the opportunity to make clear these allegations are untrue.
The Telegraph reported that the talks are not being taken seriously because the UK has yet to table a viable replacement to the backstop. One way to show it is keen on a new Brexit deal would, of course, be to set out its alternative plans
A Tory ‘Leave’ election campaign would add 18 seats in northern England, research shows
The Conservatives should gain around 18 seats in the North of England by appealing to Leave voters in a snap general election, according to new research, writes Andy Bounds, our northern England correspondent.
Boris Johnson has made a pitch to traditional working class Labour voters with his tough talk on the EU and public spending pledges.
Bradshaw Advisory, a lobby firm co-founded by Tom Lees, who once worked for Michael Gove, has run a model to predict the result of an election dominated by Brexit.
The Conservatives are predicted to gain 18 seats, the Liberal Democrats to win three, and Labour to lose 15.
Those who want to check Bradshaw’s homework can find the full modelling method at www.bradshawadvisory.com/database
It takes into account the ageing population in many Northern constituencies – older people tend to vote Tory – how often the seat switches hands and the referendum result.
It finds Penistone and Stocksbridge and Bishop Auckland are likely to turn blue – though the Tories targeted them unsuccessfully in 2017.
New work in UK construction shrinks at fastest pace since March 2009
New orders for work in Britain’s construction industry are falling at the quickest pace in over 10 years in a sign of the uncertainty sweeping across the economy.
The data from IHS Markit, based on a survey of industry executives, highlights how darkening sentiment has significantly affected investment.
Tim Moore, economics associated at IHS Markit, said:
Domestic political uncertainty continued to hold back the UK construction sector in August, with survey respondents indicating that delays to spending decisions had contributed to the sharpest fall in new work for over 10 years.
Construction companies noted that rising risk aversion and tighter budget setting by clients in response to Brexit uncertainty had held back activity, particularly in the commercial sub-sector.
Commercial construction activity fell at a steep and accelerated pace during August, which more than offset the softer rates of decline in house building and civil engineering work.
How would a Labour government affect the economy?
This is a question that’s being pondered more seriously in the City of London with a potential snap election looming.
Capital Economics has just put out new research saying the “likely result would be a moderately weaker economy than otherwise, modestly higher interest rates and bond yields, and a weaker pound and lower equity prices.”
If you’re curious about this subject, the FT has launched an in-depth series called The Corbyn Revolution. Check it out here.
London’s FTSE 100 down despite sterling fall
The UK’s benchmark stock barometer is down today despite a fall in the pound, breaking a pattern that has largely held for the past few months.
The FTSE 100 is down 0.2 per cent in early London dealings, even as the pound is down more than 0.6 per cent. Recently, the FTSE has tended to rise when the pound is falling since it is home to big multi-national companies that tend to benefit from a weaker pound.
The fall in UK stocks, and the rally in gilts (see the post below) probably points to heightened jitters among investors given the deteriorating political situation.
UK bonds rally sharply
The yield on UK 10-year gilts drops to a historic low amid the tension in Westminster. The benchmark yield shed 7bp to 0.35 per cent in early London trading.
Former chancellor Hammond plans to back rebels
Philip Hammond on Radio 4’s Today programme confirms he’s going to support the rebels’ bill, adding he “thinks” they have the numbers, Sebastian Payne reports.
The former chancellor, on track to be kicked out of the Conservative party, is threatening legal action if he loses the party whip. Mr Hammond says he’s been a Tory member for 45 years and has no intention of going anywhere.
We’re in Brexit stalemate, he says: “There is no progress. There are no substantive negotiations going on.”
Mr Hammond, in his Radio 4 interview, calls Dominic Cummings, Boris Johnson’s special adviser, an “entryist” who is not even a member of the Conservative party, reports Jim Pickard.
UK pound falls to lowest level since 2016 flash crash
The pound has fallen to its weakest level against the US dollar since 2016 as investors brace themselves for a crucial day in parliament.
Sterling dropped as much as 0.62 per cent in early London dealings to $1.197, the weakest level since a flash crash in October 2016, Refinitiv data show. It also weakened by 0.5 per cent against the euro to €1.0949.
Rebel MPs are expected later on Tuesday to attempt to seize control of the parliamentary agenda in an effort to force Boris Johnson to seek a Brexit extension in mid-October if he is unable to strike a deal with Brussels. The prime minister has in turn threatened to call a snap election if that legislation succeeds.
There are “innumerable” potential scenarios that can results from Tuesday’s vote and a potential election follow, said Antje Praefcke, analyst at Commerzbank. “As a result uncertainty is high and volatility continues to rocket.”
She said that the pound could “ease sustainably” below the $1.20 level, with further losses also expected in the pound-euro cross.
Read the full story here.
Labour’s Chakrabarti says ‘of course’ to general election
Shami Chakrabarti, shadow attorney general, says on Radio 4’s Today programme, referring to backing a dissolution motion: “Of course we want a general election…we are geared up for it, we want it as soon as possible.”
A big day in Westminster
Rebel MPs are poised later today to attempt to seize control of the parliamentary agenda in a bid to force an extension to Brexit if Boris Johnson is unable to negotiate a deal by mid-October. Mr Johnson has threatened to call a snap election if that legislation passes.
Sterling is already under pressure as investors scrutinise the steady stream of political developments expected throughout the day.