London Letter – week beginning April 25
- Cameron’s “in” campaign one-step ahead
U.K. Home Secretary Theresa May has called for Britain to leave the European Convention on Human Rights, but remain a member of the EU while the country heads for a referendum on June 23 to decide if Britain will remain as part of the EU or not. So far polls are too close to call.
According to recent polls, 47 percent of the public says yes to remain in EU, while 40 percent backs a Brexit. May used her first speech of the referendum campaign on Monday to argue that the case for remaining in part of the treaty is "not clear." On the question of the EU as a whole, she offered cautious backing to staying in - admitting there are "problems" associated with membership and saying the country "could cope" outside. Meanwhile, Justice Secretary Michael Gove warned that the U.K. faces a migration "free for all" unless it breaks away from Brussels as the ‘Leave camp’ moved to exploit a government admission that the EU’s free movement of labour rules make it harder to curb immigration.
On the other hand, the U.K. could take up to 10 years to negotiate trade deals with the U.S. if it leaves the EU, U.S. President Barack Obama said during his trip to London.
"It could be five years from now, 10 years from now before we are able to actually get something done,” Cameron said adding that Britain would also have less influence globally if it exited, according to a BBC interview.
The most important development was the unexpected comments of London Mayor Boris Johnson, the leader of the Brexit campaign, who said that the removal of a bust of Churchill from the Oval office could be interpreted by some that Obama had an “ancestral dislike of the British Empire.” The comment could eventually cause a huge blow to his campaign, his attempts to become the leader of Conservative Party and his ambition to be in number 10 one day. Obama’s visit to the U.K. was an opportunity for Johnson to mend relations but it appears he was sidelined by Cameron who outmaneuvered him with his smartly-executed political skills to turn the visit into “an international call for remaining in the EU.”
- Recent developments in U.K.
BP reported surprising and positive results of a net profit of $532 in the first quarter of the year versus a $245 million expected loss. With a consolidation in the oil market, the FTSE is expected to regain 6300 levels from its currently traded 6288 level.
High street retailer BHS has filed for administration, putting hundreds of Scottish jobs at risk. The move is expected to affect staff at 16 stores across Scotland. A total of 11,000 U.K. jobs are under threat. In a statement, administrators Duff and Phelps confirmed that negotiations to find a buyer for the business had been unsuccessful. If a buyer is not found it would be the biggest retail failure since the collapse of Woolworth's in 2008.
The government is willing to take a 25 percent stake in any rescue of Tata Steel's U.K. Operations, it announced. The business department said it was preparing to make a support package "worth hundreds of millions of pounds" available to potential buyers. Business Secretary Sajid Javid said the money would be offered on commercial terms, but the government would not take any control over the business. PM Cameron is set to visit the Port Talbot plant on Tuesday.
- What to watch this week
On Wednesday, Apr. 27, preliminary estimations of the U.K.’s gross domestic product will be released. The Land Registry House Price Index is to be released on Thursday Apr. 28. Also on Thursday, Chancellor George Osborne will attend the committee session to make a statement on the costs and benefits of the U.K.’s membership of the EU.