May hangs on as Brexiteers close in to sink her deal
Business Week: also in the news were vulture funds; property; Aryzta; and over 700 jobs
Theresa May had the unenviable task of convincing parliament of the merits of a deal she evidently couldn’t convince her cabinet of
There were unruly scenes in the House of Commons this week as UK prime minister Theresa May pleaded with boorish MPs to give her Brexit deal – painstakingly negotiated over 19 months – a chance following the chaos that had engulfed her cabinet.
May was still reeling from the loss of a second Brexit secretary in four months after the resignation of Dominic Raab hours earlier. He was quickly followed out the door by work and pensions secretary Esther McVey and two junior ministers.
That left May with the unenviable task of convincing parliament of the merits of a deal she evidently couldn’t convince her cabinet of. The 585-page document, she said, would ensure the UK’s exit “in a smooth and orderly way” – but MPs simply laughed at her.
The deal itself would involve the UK remaining in the customs union and committing to a “level playing field” in relation to EU rules in areas like environmental and workplace protections after Brexit.
It also contained a guarantee of no hard border in Ireland – the despised backstop – if the EU and UK fail to reach a free-trade deal. Raab, in his resignation letter, described the commitment as unacceptable despite its having been signed up to before he took the post.
But May told her detractors to take it or leave it, or face the prospect that Brexit would founder. The ultimatum appeared to spark a mutiny in her party as senior figures moved to unseat her by forcing a vote of no confidence in her leadership.
That will require 48 Conservative MPs to formally call for the vote, and pantomime villain Jacob Rees-Mogg got the ball rolling at a meeting of the European Research Group of Conservative Brexiteers. Loud, enthusiastic banging of tables could be heard by passersby outside.
Nonetheless, May remained defiant. She said she would go to Brussels on November 25th to sign off on the deal and put it to a vote. Later, as confusion and rancour reigned, she vowed to “see this through” even as the enormity of her task began to crystallise.
DUP deputy leader Nigel Dodds confirmed his party, which props up May’s government, will vote against the deal, which he said could lead to the breakup of the UK.
The mood in Dublin switched from delight to alarm, while, in Brussels, European Council president Donald Tusk said member states would “finalise and formalise” the agreement unless something “extraordinary” happened in the meantime.
However, the European Commission is pushing ahead with contingency plans and draft legislative measures to prepare for a no-deal Brexit and the abrupt departure of the UK at the end of March.
Brows furrow after vulture fund report
The Central Bank will have won few new friends this week after it submitted a report to Cabinet suggesting that so-called vulture funds are more amenable to working with distressed borrowers than banks and other credit firms.
The regulator found “no evidence” that firms acting on behalf of vulture funds were not engaging with borrowers in arrears. It also said there was “no material difference” in the level of home repossessions between vulture funds and banks.
Existing loan terms are being honoured when handled by vulture funds or credit-servicing firms acting on their behalf, and people whose “circumstances have not changed” are not being moved from their existing loan arrangements, it said.
On a related note, figures from the Central Statistics Office showed property price inflation has fallen to less than 6 per cent in Dublin, which was the lowest level of price growth recorded in 18 months.
That led to suggestions the gradual pick-up in housing supply may be cooling the market. Nationally prices rose by 8.2 per cent in the 12 months to September, down from 8.9 per cent the previous month and 12 per cent a year ago.
Indeed, growth in construction continued in October, although the pace of expansion slowed to its lowest rate in more than three years, according to the latest Ulster Bank construction purchasing managers’ index.
For one thing, property investor Hibernia Reit said it may sell all of the more than 320 apartments it currently owns for almost €150 million to finance the building of new homes on a high-profile 92-acre site it is acquiring near Newlands Cross in west Dublin.
The land, bought from the Irish Rugby Football Union for €27 million, has good road and rail links to central Dublin. Hibernia indicated new builds there could be split 70/30 between homes and business premises once it is rezoned.
Aryzta looks to bounce back
There was a boon for the Irish corporate landscape this week with the announcement that more than 700 new jobs are coming down the tracks, while beleaguered Irish-Swiss food group Aryzta successfully completed a massive rights issue.
Shareholders at Aryzta – the maker of Cuisine de France and McDonald’s burger buns –were offered rights to 10 new shares for every one they currently own in an exercise that sought to raise €790 million in proceeds before expenses.
The cash will be set aside to deal with the company’s debt pile among other things following a torrid few years for the baker. A total of 97.4 per cent of shareholders took up their rights at a cost of one Swiss franc (€0.88 cent) a share.
Much of the remainder are understood to be several hundred long-standing Irish shareholders who were effectively locked out of the deal. They now find themselves with a stake in the company that is worth less than 10 per cent of what it was before.
On the jobs front, financial services company Grant Thornton is to increase its headcount by one-third over the next two years with the creation of 400 new hires, while customer service technology firm Genesys is to create 200 tech jobs in Galway.
Elsewhere, contact lens manufacturer Bausch & Lomb announced an expansion of its production facilities in Waterford in a move that is likely to lead to about 100 new jobs. Finally, Irish risk analytics firm Quaternion Risk Management will create 20 jobs in the capital.