This week’s news includes; Government suffers three Brexit defeats in Parliament, Huawei CFO arrested in Canada, O2 data service outage, and Uber & Lyft race to IPO.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- Legal Cheek “Big Four’s foray into legal services gets thumbs up from Lord Chancellor”
- The Independent ” What is OPEC and why has Qatar left its ranks? ”
- City A.M Will Brexit loosen the UK’s legal grip?
It was yet another tough week for Theresa May. She suffered three defeats in the House of Parliament within an afternoon and the crucial Brexit vote is still yet to come.
For the first time in history, the government has been found in contempt of Parliament. This was due to the failure to publish the UK attorney general’s full Brexit legal advice on her Brexit deal. Traditionally, legal advice is kept confidential but the government had previously committed to publishing the full Brexit legal advice. The government was then forced to publish the full advice. It showed that the UK could be legally kept within the Irish backstop indefinitely. The release of the legal advice only increased opposition to the deal. Theresa May however, claims that the backstop was not ideal for either party to remain in for a sustained period of time. Free movement and UK payments to the EU would end but the UK would still be closely aligned with the EU. The EU would not necessarily want a long term backstop on this basis. The Irish backstop is essentially an insurance policy. If the UK does not agree a future free trade deal with the EU, the backstop is designed to prevent a hard border with Ireland. Ireland will remain within the customs union but more closely aligned than the rest of the UK.
The government also lost the motion to put this question of contempt to the Committee of Privileges. The government lost this motion by only four votes. Parliament then voted to have more influence on the Brexit process. If Parliament votes down Theresa May’s deal on the 11th of December, the government must devise a plan and bring that plan to Parliament within 21 days. Parliament will now have the right to vote on what they want the government to do. The UK parliament will vote on Theresa May’s deal on Tuesday. It is unlikely that she will have the support of MP’s to get her deal through. It is unclear what will follow.
The Chief Financial Officer of one of China’s largest telecoms equipment companies, Huawei, has been arrested in Canada. Meng Wanzhou was arrested on the grounds of breaching US sanctions on Iran and she could face extradition to the US. Huawei has allegedly been shipping products to Iran, in direct contravention of US sanctions.
This adds further fuel to the fiery relationship between the US and China amid their ongoing trade war. Mr Xi and Mr Trump have agreed a 90-day truce but this issue is could reignite the war. China insists Ms Wanzhou is innocent and has warned there will be serious consequences unless she is released. China has already summoned the Canadian ambassador calling for her immediate release. Huawei is the second largest smartphone maker in the world and posted revenue of $92 billion in 2017. (Sky News)
3. O2 OUTAGE
O2 suffered a huge data network outage last Thursday, causing widespread disruption. The primary cause of the outage was an expired software certificate. Users were unable to use 3G data services and many were unable to send text messages or make calls.
The outage affected O2’s 25 million users as well as 7 million users on Sky, Giff Gaff, Lycamobile and Tesco Mobile, all of whom rely on o2’s network. Bus timetable information boards which rely on live updates sent from buses were also disrupted. Thousands of business customers were also faced with no access to data services for the day.
O2 customers will be entitled to claim refunds for the amount of time of they with without access to data services. They can also claim for consequential damages and losses caused by the outage. O2 is the UK’s second largest mobile network provider and is owned by Telefonica. O2 turned over £5.7 billion in 2017.
4.UBER & LYFT RACE TO IPO
Both Uber and Lyft made moves to launch their IPOs’ last week. Lyft officially filed for their initial public offering with a view to go public by mid 2019. The filing was confidential so it is not clear how many shares will be offered.
Uber was hot on the heels of Lyft according to people familiar with the matter. Uber privately filed for its IPO last week also. Very few details have emerged although Uber has been gearing up for the process. Morgan Stanley helped the tech firm prepare its IPO prospectus. Uber has not yet selected a lead bank for flotation but it will be among the largest ever IPO’s ever. Chinese firm Alibaba holds the title of largest IPO, offering $25 billion worth of shares in 2014.
Market turmoil in US markets is likely to impact the success of both Uber’s & Lyft’s listings unless there is a drastic change in the state of affairs. Uber is almost four times as much as Lyft. Analysts estimated Uber could be worth $120 billion whereas Lyft is expected to be valued at up to $30 billion. In 2017, Uber turned over $37 billion while Lyft post revenue of $1 billion. Despite their huge valuations and revenues, both companies are yet to make a profit.
5. ECJ BREXIT COURT CASE
The Advocate General of the European Court of Justice has also confirmed that the UK is legally permitted to unilaterally reverse the Brexit process. This forms part of a ECJ legal case deciding on this very issue. The advice from the Court’s top legal advisor, while non-binding is often followed by the court. The case was initially brought forward by anti-Brexit Scottish Parliaments.
The UK government tried to block the referral of the case to the ECJ but this move was blocked by the UK Supreme Court. Downing Street has been clear that there is no appetite for the revocation of Article 50. Interestingly, the view of the Advocate General is contrary to claims made by the EU’s chief Brexit negotiation. He claimed the UK would need the consent of the EU member states to revoke the article 50 notice and reverse Brexit. (Business Insider)
6. NORTH AMERICAN TRADE DEAL
The US, Mexico and Canada have signed a new trade deal. This signed finalised details agreed earlier in the year. The deal provides each nation with greater access to each others markets. US dairy farmers will now have access to 3.5% of Canada’s dairy market. 2.6 million Canadian vehicle exports a year will be exempted from any possible US tariffs. Crucially however, Canada has not been fully exempted from US tariffs. Mexico on the other hand, has agreed to buy “as much US farm product as possible”. (Sky News)
This deal must now pass through each country’s respective parliaments. The mid-term elections in the US however, saw Trump lose control of the House of Representatives so Trump is likely to face some resistance to the deal. This deal replaces the North American Free Trade Agreement (NAFTA), which President Trump called “a disaster”.
7. DELIVEROO RIDER LAWSUIT
Deliveroo has won an important legal battle over its riders. The high court has ruled that Deliveroo riders are not entitled to collective bargaining rights. A case brought forward by the Independent Workers Union of Great Britain (IWGB) appealed a decision by the Central Arbitration Committee which deemed riders were not entitled to workers rights. The high court however, affirmed the decision of the CAC.
The court deemed that Deliveroo riders were not in an employment relationship and so were not entitled to workers rights. The IWGB has said it will further appeal the decision as the majority of riders want workers rights. The organisation claims Deliveroo’s refusal breaches human rights but the courts so far have disagreed. The gig economy is awash with lawsuits as the sector battles over the legal status of its workers.
8. SHELL SENIOR PAY
Royal Dutch Shell has announced that executive pay will be directly linked to carbon reduction. This is another initiative designed to encourage carbon reduction from the top level. Over 1300 senior employees could be affected by the decision.
The move was made after concerted pressure from investors including the Church of England. Investors have been active in persuading the energy giant to take affirmative steps to combat climate change. Shell initially had an ambition to cut Co2 output by 50% by 2050 but this was insufficient for investors. Shareholders pushed the company to adopt three-five year carbon reduction targets.
Shell has also signed up to the Climate Action 100 + initiative. This initiative consists of 310 investors with £25 trillion under management designed as a fund for new green initiatives. (BBC News)
9. VEGAN DISCRIMINATION LAWSUIT
Jordi Casamitijana has launched legal proceedings against his former employer upon grounds of discrimination due to his veganism. An employment tribunal will now decide whether veganism is a “philosophical belief” akin to a religion. Religions and beliefs are protected by the Equality Act 2010 and it is unlawful to discriminate on this basis. This includes treating less favourably than others and dismissal.
Mr Casamitijana was dismissed by the League Against Cruel Sports for alleged gross misconduct. Mr Casamitijana disclosed information that it invested pension funds in firms involved in animal testing. Mr Casamitijana raised this to his managers. The managers did not respond to his complaints and he then told other employees and was subsequently dismissed. He describes himself as an ethical vegan who fights animal cruelty of all kinds and he was dismissed on the basis of this belief dismissal. His former employer however, states that this claim is factually wrong as the claimant was dismissed for gross misconduct.
The outcome of this case could have huge implications and provides clarity on the legal status of vegans. There are an estimated 600,000 vegans in the UK.
10. THOMAS COOK STOCK CRASH
Thomas Cook’s share price plunged by 60% in just eight days last week. Investors were concerned as the company has issued its second profit warning in just 2 months. It expects profits to be £30 million less than predicted. Its share price fell from 48p to 21p in just over a week. The share price however, climbed 45% on Wednesday after the company revealed it would not have to issue new equity. The travel company blamed the summer heat wave for a drop in travel. Earlier this year, the company shut down its Club 18-30 holiday package as demand dwindled. Thomas Cook turned over £300 million in 2017.