This week’s news includes; Theresa May steps down as Tory party leader, Huawei turns to Russia for 5G deal, BT to close 90% of UK offices, Mike Ashley bids £52 million for GAME
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:
- The Fashion Law – Why There Are More Counterfeit Rolexes Than Any Other Product in the World.
- City A.M – Should we cap inheritance tax breaks?
- FT – How a private equity boom fuelled the world’s biggest law firm.
1. THERESA MAY STEPS DOWN
Theresa May has officially stepped down as leader of the Conservative party. She will remain as prime minister until the next leader is chosen. There are 11 conservative MP’s currently in the leadership race. The winner of the contest will be announced in the week 22 July.
Its fair to say Theresa May had a torrid time as Prime Minister. Her premiership was dominated by Brexit and it brought us an unprecedented era of politics. Theresa May’s ability to pass legislation was fundamentally limited by the fact she only had a working majority via the DUP. Contrary to her campaign slogan of “strong and stable”, her failure to win a majority at the 2017 snap election laid a weak and shaky foundation for her premiership.
She successfully negotiated a deal with the EU but the deal was laced with political poison in the form of the Irish backstop. For many MPs the backstop turned the deal from barely palatable to wholly unfathomable. She brought her deal to Parliament and this was astoundingly rejected by 230 votes, the heaviest defeat in Parliamentary history. Her withdrawal agreement was then rejected by Parliament a further 2 times. With each failure she went back to the EU to request more time. The landmark departure deadline of 29th March 2019 was eventually pushed back to 31st October 2019. Despite this, in her time, May survived two motions of no-confidence, one from within her party and the other from Jeremy Corbyn. By May 2019 however, discontent and division over her leadership grew within the party and the “men in grey suits” told May her time was up.
With Parliament still bitterly divided however, Theresa May’s successor will face the exact same challenges with regards to Brexit. In addition, remain MPs will argue any Prime Minister pushing for a no-deal Brexit does not have the mandate to do so, therefore, further stalemate is likely to ensue. The Brexit deadlock has undoubtedly defined Theresa May’s premiership but the delivery of Brexit (or if we leave at all) will also define her successor’s.
2. BORIS QUASHES REFERENDUM LIE LAWSUIT
Boris Johnson will not be required to appear in court over allegations he misled the public during the Brexit campaign. The lawsuit claims Johnson committed misconduct in a public office by claiming the UK would reclaim £350 million a week by leaving the EU. The claim also highlights the persistent propagation of this false figure. A district judge initially summoned Johnson but this has now been overturned. Adrian Darbishire QC argued the figure was a “political claim open to and available for contraction and debate.” Consequently, he rejected the idea of referring the case to the Crown Prosecution Service. Johnson’s lawyers welcomed the decision and asserted the legal action was politically motivated.
3. HUAWEI 5G RUSSIA DEAL
Huawei has struck a deal with Russian telecoms firm, MTS, to develop 5G technology amid increasing Western pressure against the Chinese tech giant. Huawei will now work on developing 5G technology in Russia throughout 2019 and 2020.
This follows the introduction of new US sanctions blocking American companies from working with Huawei among other blacklisted foreign telecoms firms. Huawei has presented itself as stoic in the face of these measures, but this new deal will no doubt provide relief. The US is urging allies to take similar action against Huawei, particularly as countries are now developing 5G technology. Huawei is a front-runner in the sector so only Australia and New Zealand have so far totally blocked Huawei from working on their networks.
Check out our article exploring some of the potential risks posed by Huawei. (Feb 2019)
4. CRIMINAL BARRISTER WALKOUT
Criminal barristers have voted to stage a national walkout in protest over low fees. The walkout will take place on July 1 and will see the shut down of the criminal justice system. The Criminal Bar Association, who represents criminal lawyers, held a ballot amid growing discontent within the profession over fees for legal work. Some lawyers are paid as little as £46.50 per day in court. Lawyers were asked whether they agree to stage a walkout over prosecution and defence fees and over 94% of over 2700 members agreed. They demanded; raising minimum fees from £46.50 to £100 per day, payment for reading unused disclosed material and for reviewing disclosed evidence. The walkout will see the criminal justice system brought to a standstill. Negotiations between the CPS and the CBA are ongoing.
5. JLR AND BMW TEAM UP
Jaguar Land Rover and BMW are teaming up to work on electric car production. The car industry is struggling as demand in China falters. JLR and BMW will work together to develop electric motors and power electronics. The collaboration is in order to bring down costs of research and production.
As consumers and governments shift from high polluting vehicles, manufacturers are investing heavily in low emission electric and hybrid vehicles. Firms are now scrambling to lead the charge on electric vehicle manufacturing. Volkswagen and Ford have also teamed up to work on electric vehicle production.
6. FORD BRIDGEND PLANT CLOSURE
Ford is set to close its Bridgend plant, costing 1700 jobs. All jobs will be phased out by September 2020 but there will be offers of redeployment. Ford blames rising costs and changing consumer demand for the closures.
Ford has, failed to make inroads into the electric car market and must now shift in order to remain competitive. The Bridgend factory has been running for over 40 years and many workers have been employees since the 1970’s. This is a huge blow for the Welsh economy. The company asserts that the closure has nothing to do with Brexit.
7. BT OFFICE CLOSURES
BT has announced that it will shut 90% of its UK offices. The cuts are in order to make £1.5 billion in savings. BT used to have 440,000 employees. By the end of this process its workforce will be shed to 75000. The idea is to consolidate offices and centralise the company in major towns and cities. BT currently has 300 UK office locations, and this will fall to 30 by 2023. Last year, BT announced 13,000 jobs by 2021. The company has however, claimed that it is committed to a future in the whole UK.
8. MIKE ASHLEY BIDS FOR GAME
Mike Ashley’s Sports Direct has launched a £52 million bid for GAME Digital. Ashley already had a stake in the company and upped his share. Ashley only first bought its stake in GAME in 2017 and has now increased his holding to 38.49%. Crossing a 38% share requires him to make a formal takeover bid. Sports Direct has made a 30p per share offer for the company. Sports Direct hopes to bring stability to the struggling company amid high street turmoil. GAME’s share price jumped 23% in response to the news.
9. BANKS JUMP INTO CRYPTO
Major banks have revealed that they are working to launch crypto versions of global currencies next year. The banks include, UBS, Barclays, and Santander. The objective is to create a crypto coin to help speed up transactions and reduce costs. Many within the financial sector are sceptical whether blockchain solutions can truly offer this. The coin will be called the utility settlement coin (USC).
For more on how this coin will work check out Business Insiders’ report.
2020 could be a breakout year for blockchain as a major institutions are looking to release their own products. Facebook is also set to release its own blockchain based payment system. Check out our insight article Blockchain: Explained
10. ITUNES CLOSURE
Apple has announced that it will shut down iTunes. The tech giant will now split the app into three, named Music, TV and Podcasts. iTunes will be removed in the next Mac OS update later this year. The apps will focus on subscriptions for content streaming rather than purchasing of content, as was traditionally carried out in iTunes. iTunes was first released in 2001.
Apple made a number of shakeups in a recent event. It will launch an operating system designed specifically for iPads to improve the user experience. The Apple Watch will also receive its own unique App stores.
For more on the Apple event check out Sky News’ report.
Check out our insight article on the Apple credit card.