Political Intelligence for Businesses working with Government

GUIDE delivers political and market intelligence for corporate clients. To find out more, email Chief Executive Greig Baker on greig@theguideconsultancy.com 

Another Scottish referendum could boost British business

Rumours abound of Nicola Sturgeon seeking another Scottish independence referendum when Article 50 is triggered. Contrary to popular wisdom, if Scotland does break away, Brexit will be a tactic where devolution proves to be the strategic cause. The political impact on the Tories could be more benign that unexpected, too, as many English voters have mixed feelings about Scotland’s place in the Union, while the SNP would have to take full ownership of policy outcomes in Scotland. Either way, aside from short-term currency fluctuations, the change would affect companies serving the UK’s remaining public sector.

Subject to any final deal, Scottish independence would increase Westminster’s appetite for spending – partly as more funds become available to use in England, Wales and Northern Ireland, and partly to replace infrastructure assets (especially maritime assets) lost in Scotland. At the same time, state spending in a newly independent Scotland would probably fall in line with a smaller tax take and a lower international credit rating.

Paradoxically, “independence” could also mean less autonomy for the Scottish Government, as it would probably have to align itself with the business and trade regulations of a larger trading bloc (whether the UK or the EU) over which it has precious little influence.

Business rates point to political role

In assessing the Government’s proposals for business rates, the front pages have taken a rare break from the twists and turns of Brexit. The rates issue is politically important and points to three important themes: first, austerity persists as the public finances remain skewed; second, all of the ‘easy’ cuts have been made and the tax take is already around its limit; and third, as a result of that austerity and those limited options, the Government needs private companies to play a bigger role in delivering domestic policies. All the time these themes remain, businesses’ influence and responsibility in Whitehall grows.

The Government wants transparency from suppliers

A new Procurement Policy Note (PPN) ‘updates’ transparency principles for Government suppliers, confirming “a presumption in favour of disclosure of contract and related information, that may previously have been withheld on grounds of commercial confidentiality”. Together with increased Select Committee scrutiny coming down the track, this means companies working with the public sector will find themselves in a very different environment over the next few years.

The full PPN can be found here: http://bit.ly/2kW3qWi

Government needs companies to boost cyber security

Quietly, new cyber security precedents are being set for all firms that work with the public sector, as the Government gets its suppliers to help protect the UK from cyber threats. For example, companies from all sectors will increasingly be subject to the kind of requirements set out in the newly published Civil Nuclear Cyber Security Strategy. This strategy has three key themes…

First, the Government sees it as a supplier’s job to keep on top of new technologies and the changing threats they introduce. Even in the nuclear energy sector (which, together with financial services, already has highly developed cyber security measures in place) the Government now expects to see a “transformation” in approach to cyber security, not just steady improvement. Where the Government feels companies are not up to scratch, regulations will be “reviewed and strengthened” and paid for by “additional industry resources”.

Second, the Government wants evidence that action is being taken by suppliers. Given examples include appointing board level representation of cyber security experts (in addition to a qualified CISO) and providing a “list all of critical digital assets and vulnerabilities across the organisation and supply chain [emphasis added]”.

And third, while the strategy focuses on Government demands of suppliers, there are also hints at the commercial opportunities being created. Companies that excel in demonstrating their cyber security prowess will enhance their bids for public sector contracts (which are also likely to be helped by using the Government’s apprenticeship scheme to expand cyber skills training) and could even develop a “cyber specialist consultancy capability” that is sold to other private companies.

For understandable reasons, the Government is prioritising critical infrastructure sectors in its new cyber security criteria, but they won’t be confined there for long. 

Labour is becoming desperate… and nasty

Over the weekend the Guardian attacked UKIP’s leader and Stoke candidate Paul Nuttall over the Hillsborough disaster. Aside from the Guardian’s unhealthy link to Jeremy Corbyn’s right hand man, Seamus Milne, and the very thin grounds for the story, the full page spread points to both Labour’s huge worries about Stoke opening the floodgates for UKIP in the North and to the Opposition’s continued failure to find a positive message to appeal to swing voters.

Another Brexit vote is the last thing Labour needs

Labour has heralded the Government’s “huge concession” of allowing MPs to vote on the draft Brexit deal before it goes to the European Parliament for ratification. Aside from the fact it wasn’t “huge” at all, this is the last thing Labour needs. Another substantive vote on Brexit, occurring that much closer to the planned 2020 General Election, would simply remind voters of Labour’s divisions over Europe and give UKIP a boost in Labour-held seats before polling day.

LibDem strategy document: Brexit is a “revenue opportunity” and donors have “expectations” of how money will be spent

GUIDE has been given a LibDem strategy document that describes Brexit as a “revenue opportunity” and says big donors have “expectations” for how the party will spend their money.

The document, written by LibDem Chief Executive Tim Gordon, lists the LibDems’ financial difficulties, with “poor conference results” set to continue and the LibDem 2017 conference expected to “break-even at best”. Gordon also says “standing order decay continues” for membership subscriptions and those returns will be “worse than [the] last 4 years”.

In a second document, LibDem finance manager Tope Famaks says the party is facing rising costs from their imported Nationbuilder and Connect campaigning tools, which have become more expensive due to exchange rate changes.

The party plans to use the “revenue opportunities” of “our European positioning” and negotiate a new “right to sub-let [a] portion of the GGS [Great George Street]” headquarters with its landlord.

Gordon says the LibDems can secure “one-off, often unpredictable but transformative donations” and the “post-BREXIT political situation has [the] potential to strengthen our income streams”. Indeed, it seems this is already happening and “by-elections have helped us mobilise donors, many inspired by our European positioning”. There is an “expectation from [our] key donor that the money will be spent on driving momentum in [the] year ahead”. A third document points to the success of this fundraising, as the LibDems expected to raise £100k in campaign funds last year, but actually secured more than £2.3m of donations.

The documents raise three important questions:

1/ Do the LibDems have a financial incentive to obstruct the Brexit process?

2/ To what extent is LibDem Brexit policy (e.g. their call for a second referendum) influenced by the potential to raise future funds for the party?

3/ Does the LibDem plan to secure funds and national support after their 2015 collapse rely on prolonging the Brexit debate?

For comment and further details, please contact GUIDE’s Chief Executive on greig@theguideconsultancy.com

Future of the EU in Trump's hands?

Two sides will take part in Brexit talks, so a parochial focus on things this side of the Channel risks missing key issues. For example, the current Greek bailout (of €86bn) is due to end next year and euro finance ministers are reviewing the deal. High on the list of concerns are doubts about whether the US-based International Monetary Fund will support another bailout – doubts compounded by President Trump’s belief that the eurozone is failing anyway and another package would be throwing good money after bad. Without the IMF, Germany would have to foot more of the bill, which makes for a pretty unattractive pitch in an election year. At the same time, the ECB has put the frighteners on other countries (like Italy) that might be considering a euro-exit, only confirming they see it as a realistic prospect. The UK may end up feeling it got out of the EU just in time, but big problems on the continent are in no one’s interest – and our negotiating partners will be looking for help in avoiding them.

Whitehall turf war

Civil Service jockeying continues for power over the UK’s Brexit preparations. The MoD, for instance, has made a play of offering its expertise to DExEU, while also claiming other departments, like DEFRA, have simply got too much on already to take a bigger role. Coming on top of what was an institutional leaning to Remain and former mandarins now openly criticising Government policy, the Civil Service needs to change tack quickly to rebuild the most effective working relationships with Ministers.  

Brexit and workers' rights

In its drive to counter fears of stripping back workers’ rights post-Brexit, the Government has just announced it is “determined to tackle pregnancy and maternity discrimination” and said it will “consider” telling courts to extend the time limit for wronged mothers to bring a tribunal against their employer. Dramatic change to the current law seems unlikely, but the move is further evidence that the Government will move quickly to address any worries that could give MPs or Peers a rod to beat them with.


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