Outrage as Boris Johnson stops Corbyn and Co in their tracks

Business Week: also in the news was trade; economic signposts; Huawei, Apple, and jobs

John Bercow, speaker of the House of Commons, called Boris Johnson’s move a “constitutional outrage”.

John Bercow, speaker of the House of Commons, called Boris Johnson’s move a “constitutional outrage”.

 

The struggle in the House of Commons between hardline Brexiteers and those seeking to ensure a smooth exit from the EU escalated to outright war this week as prime minister Boris Johnson moved swiftly to neuter opposition to his no-deal plans.

Minds on the opposition benches had finally appeared concentrated on trying to find consensus on a way to stop Johnson. After a two-hour meeting on Tuesday, the parties agreed to park the planned no confidence vote and instead focus on legislative methods.

But less than 24 hours later, they were left stunned when Johnson announced plans to suspend the House of Commons from the second week of September until just two weeks before the Brexit date of October 31st.

While parliament is routinely suspended to prepare for a queen’s speech, which sets out the government’s plans, this will be the longest suspension since the end of the second World War in 1945. MPs, as well as media across Europe, likened the move to “a coup”.

John Bercow, speaker of the House of Commons, called it a “constitutional outrage”, adding it was “blindingly obvious that the purpose of prorogation now would be to stop parliament debating Brexit”.

In a rare joint statement, opposition parties Labour, the SNP, the Liberal Democrats, Plaid Cymru, the Independent Group for Change and the Green Party condemned the move. On the other hand, it was welcomed by DUP leader Arlene Foster.

Irish ministers however declined to comment, insisting it was an internal British matter. Although one junior minister, Michael Darcy, didn’t get the memo, likening Johnson to Oliver Cromwell in a tweet which was later deleted.

The escalation drove a three month sterling volatility gauge to its highest level of the year, with traders bracing for more big price swings in sterling between now and the Brexit deadline.

What with precisely two months to go now, negotiators will hold twice-weekly talks in an attempt to rework the Brexit agreement that Britain’s parliament has repeatedly rejected.

For now though, Minister for Foreign Affairs Simon Coveney has said existing proposals for alternatives to the backstop – which include trusted trader schemes and checks on goods away from the Border – are “not even close” to being acceptable.

Meanwhile, acting Central Bank governor Sharon Donnery this week warned a no-deal Brexit will have “an immediate and severe impact on almost all areas of economic activity”.

Minister for Finance Paschal Donohoe has signalled he will let the Republic’s headline budget surplus swing to a deficit of up to 1.5 per cent in the event of the no-deal Brexit, effectively pushing up to €4.5 billion back into the economy to counter the fallout.

Elsewhere, British Irish Chamber of Commerce called on the Government to divert €1 billion of windfall corporate taxes into a Brexit response fund to aid businesses.

Trump admits second thoughts on trade war

US president Donald Trump admitted this week that he had had second thoughts about his trade war with China which has been blamed for pushing the US and wider world economies towards recession.

Asked at a working breakfast with Boris Johnson if he had had second thoughts about the standoff, the president replied: “Yeah, sure. Why not? I have second thoughts about everything.”

On the bright side, there were also signs this week that the tensions might be dialled down a notch after Trump said there were bilateral talks planned “at a different level”. Mind you, he didn’t elaborate on what that might mean.

In Europe, German business sentiment deteriorated more than expected in August to hit its lowest in nearly seven years, in a further sign that escalating trade disputes are pushing the continent’s largest economy toward a recession.

Back home, and what have become known as the “Boris blues” struck again as consumer and business sentiment dropped to a new low.

Bank of Ireland’s “economic pulse” indicator, which combines the results of separate consumer and business indices, fell nearly four points to 79.1 in August. This was more than 12 points lower than a year ago and reflects the current edgy environment.

That’s despite wage growth in the Irish economy accelerating at its fastest pace in a decade. The CSO’s latest earnings data showed average weekly salaries rose to €771.12 in the second quarter of 2019, up from €745.09 a year earlier.

Elsewhere, retail sales fell 4.4 per cent in July, primarily as a result of a decline in sales in the motor trade despite the month typically being a strong one for the sector given that it’s the first month for new 192 registrations.

On that note, figures showed the Irish grocery market remains a closely fought battle, with less than half a percentage point separating Dunnes Stores on 21.6 per cent and third place SuperValu, on 21.3 per cent. Tesco came in second on 21.5 per cent.

Huawei announces major Irish investment

Chinese tech giant Huawei hosted a party of Irish reporters in Shenzhen this week as it announced plans to invest €70 million in research and development here the next three years.

The company, which employs about 180 people in Ireland across facilities in Dublin, Cork and Athlone, said the investment focus would be on video, cloud computing, artificial intelligence and site-reliability engineering.

Huawei also disclosed that it has transferred many of its mobile software services to an Irish subsidiary called Aspiegel Limited, meaning the Irish unit has taken over responsibility for European users’ personal data.

Staying with tech, hundreds of Apple workers across Europe who were employed to check Siri recordings for errors have lost their jobs after it was revealed the recordings included confidential information, illegal acts, and even Siri users having sex.

More than 300 employees have had their contracts ended in the company’s Cork facility alone.

There was bad news also for staff at British holiday rental company Hashtag Hotels which has fallen into administration leaving at least 35 workers in its Dublin operation without pay, in some cases for two months.

On the bright side, US multinational engineering group Jacobs is to create 200 new jobs across its facilities in Dublin, Cork and Belfast after completing a €4.5 million investment in its Cork base.

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