Liz Truss urged by Bar Council to condemn Brexit ruling backlash

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New Lord Chancellor installed

The Bar Council joins calls for the Government to defend the judiciary’s independence after three judges were heavily criticised. Justice Secretary Liz Truss is being urged to condemn “serious and unjustified attacks on the judiciary” following a High Court ruling over Brexit. The Bar Council has joined calls for the Government to defend the judiciary’s independence after three judges were heavily criticised by some Tory MPs and sections of the media. The trio ruled on Thursday the Government must seek MPs’ approval before triggering Article 50 – the formal process of leaving the EU.

The Daily Mail called the judges “enemies of the people” while the Daily Express claimed the ruling was a marker of “the day democracy died”. The Bar Council, which represents barristers in England and Wales, condemned the attacks and called upon Lord Chancellor Ms Truss to do the same. It said: “A strong independent judiciary is essential to a functioning democracy and to upholding the rule of law.” Ms Truss has not spoken on the matter since the court decision and Prime Minister Theresa May has also been urged to calm the backlash in the wake of the ruling. Ex-attorney general Dominic Grieve said the stinging criticism of the trio was “chilling and outrageous” and “smacks of the fascist state”. He said reading some of the press coverage was like “living in Robert Mugabe’s Zimbabwe … I think there’s a danger of a sort of mob psyche developing”.

Bob Neill, the Conservative chairman of the justice select committee, told The Times: “All ministers from the Prime Minister down must now make clear that the independence of the judiciary is fundamental to our democracy.” It comes as Labour leader Jeremy Corbyn demanded Mrs May set out her Brexit plans “without delay”. In a speech to the Class think-tank, he said Labour “accepted and respected” the EU vote result but called for the Government’s negotiating terms be transparent and accountable to Parliament. Mr Corbyn also insisted all UK businesses should be given “assurances” over the impact of Brexit to match those apparently made by the Government to Japanese car-maker Nissan.

On Friday, Mrs May suffered a setback after a pro-Brexit Conservative MP resigned over “irreconcilable policy differences” with the Government. Stephen Phillips announced he was quitting over what he perceived to be a failure to appreciate the need to consult Parliament over Brexit. His resignation as MP for Sleaford and North Hykeham has fuelled speculation the PM will call an early election. However, a Number 10 source insisted Mrs May stood by her declaration that she would not go to the country before 2020. Meanwhile, the woman behind the successful High Court challenge on triggering Brexit has been subjected to a torrent of online abuse, including rape and death threats.

Gina Miller, who was born in Guyana in South America, has also been the target of racist rants by internet trolls, who have called for her to be deported.


Bank of England left embarrassed by forecast u-turn

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The Bank of England is seen in the City of London in London

The Bank has binned gloomy post-referendum growth projections and now admits it may have to hike interest rates after all. Let’s be frank, this is hardly the first time the Bank of England has got something wrong. It missed the financial crisis, it misjudged the strength of the housing market in the run-up to it, it underestimated the inflationary surge in 2008 and overestimated the economy’s capacity to recover from the Great Recession. But rarely has the Bank ever got an economic forecast quite as wrong as this one. In fact, one can go one step further: this is the biggest forecast u-turn in its history as an independent central bank.

Think about it.

In August, its first forecast after the referendum vote, the Bank slashed its gross domestic product projections more than in any single Inflation Report on record. Today, it raised its GDP forecast more than in any single Inflation Report on record. It is, of course, a deep embarrassment. Having cut interest rates to the lowest level in history and pledged to cut them again, the Bank has now had to admit that it no longer has plans to cut them. In fact, with inflation now forecast to rise further above its 2% target than at any point in recent history (that tends to happen when the pound falls) it has had to signal that it may have to raise rates if prices continue rising.

Very awkward indeed.

And yet, the story is not quite as straightforward as those headline revisions might suggest. For one thing, that near-term upgrade is followed by a big growth downgrade in the following years. The upshot is that actually in three years’ time the economy is set to be a few percentage points smaller than the Bank forecast last time around. That raises a deeper issue about the economics of Brexit: the real damage (or indeed boost) will be determined by the way the negotiations go in the coming years, and by the nature of the deal the UK eventually secures.

Will it be a deal that keeps the borders open and trade flowing? Will it clamp down on commerce and freedom of movement? These are the things that will determine economic growth and productivity in the coming years. It is too early to make a decent stab at predicting any of that – though the Bank’s medium term forecast cut suggests it believes the process might dampen growth in the coming years. Will it be right on that? As the former Governor, Mervyn King, used to say, the one thing we can be sure of is that none of our forecasts will be completely accurate.

Ed Conway Economics Editor



Why Philip Hammond should be getting ready to break up RBS

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Conservative Leader Theresa May Addresses Party Conference

The new series of The Missing is surely the gloomiest television of the year. But it has nothing on the endless saga of RBS, which seems to use the same disturbing time-shift device: whenever there’s a horrible new plot twist, you have to spot whether we’re in 2008, 2011 or today.

The crippled bank, still 73 per cent state-owned, has lost £2.5 billion in the first three quarters of this year, having just paid out another £425 million in ‘litigation and conduct’ costs chiefly relating to mortgage-backed securities hanky-panky in the US. Since its bailout eight years ago, it has lost considerably more than the £46 billion of taxpayers’ money that was pumped into it, and has never reported a full-year profit. Attempts by chief executive Ross-McEwan, after three years in post, to persuade analysts to focus on the bank’s positive underlying performance, rather than the extraordinary charges that are the legacy of his cursed predecessor-but-one Fred-Goodwin, fall quarterly on stony ground.

The harsh truth is this: if ever there was a company that cried out to be broken up, its operating business either sold to the highest bidder or if unsellable then parked in a ‘bad bank’ to be gradually wound down, RBS is surely it. The parent brand deserves to be buried forever, even if the main subsidiary brands of NatWest and Coutts are still viable and the original Scottish branch network might have a new life under a new (or old) name. But the one serious attempt to sell off a significant piece of the group — the separation of 314 branches into a ‘challenger bank’ under the revived and well-respected name of Williams & Glyn — has turned into the biggest cock-up of all.

The disposal was insisted upon by competition officials in Brussels, to be done by 31 December next year as a condition of the 2008 bailout. Plans for flotation of Williams & Glyn this year were abandoned because it proved too difficult to clone a separate computer platform; ‘restructuring costs’ relating to that and other problems amounted to £301 million in the most recent quarter alone. Next, Santander withdrew as a potential buyer because of incompatibility with its own superior systems; and after a recent second look, the Spanish group withdrew again because the price asked by RBS was too high for the can of worms on offer.

Now the Clydesdale & Yorkshire Banking Group — a hard-nosed operator recently spun off by National Australia Bank — has made a tentative offer, causing its own share price to dip as a result. But RBS says neither this nor any other Williams & Glyn sale can hope to be signed off by the end of 2017. In which case, Brussels may appoint its own ‘trustee’, somehow to force the disposal to completion.

What a farce. Philip Hammond, with none of George Osborne’s baggage to carry on this one, should call for a reappraisal of RBS’s chances of ever returning to the private sector in anything like its present size and shape. If he wants to set a generous time limit, he might say ‘before the opening of Heathrow’s new runway’. But if the expert advice is that the likelihood is close to zero however distant the deadline, he should send in a ruthless hit squad of accountants and liquidators to retrieve whatever value for the taxpayer they can find.

That would at least have some justice to it, since it is what RBS was accused of doing to so many of its struggling business customers during the recession.


Regulator accused of letting down poorer bank customers

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The Competition and Markets Authority (CMA) has been accused of letting down the financially vulnerable in its recent report on banking.

Labour MP Rachel Reeves said the CMA was guilty of a “dereliction of duty”, after it decided not to cap unauthorised overdraft charges. Instead the CMA’s August report suggested that banks should each set their own maximum monthly charges. Professor Alasdair Smith, the report’s author, denied the accusation. He was appearing before MPs on the Treasury Select Committee. Rachel Reeves said that, on average, vulnerable consumers were paying £225 a year in overdraft charges, which they could not afford. “It’s a dereliction of duty, Professor Smith. I think it’s a very disappointing report. You are letting down the most financially vulnerable,” she said. At the moment, the big High Street banks charge up to £100 a month for an unarranged overdraft, plus other fees on top. The MPs heard that the cost of borrowing £100 from a payday lender could even be cheaper.

‘Deeply disappointed’

However Professor Smith said the focus of the CMA’s banking enquiry had been on making competition between the banks work better. “I don’t think it’s a dereliction of duty,” he said. But he said he shared Ms Reeve’s concern. “I agree with you that our measures will not directly address all of the problems of the most vulnerable overdraft users,” he told the MPs. “And it is not realistic for us to do this.” However, the CMA’s senior director, Adam Land, said vulnerable customers would be helped by its plans for so-called open banking, which will enable consumers to share their banking data with third party providers. “Open banking helps overdraft customers in three ways: The first challenge it overcomes is customers feeling that they can’t switch because they are in debt; secondly it provides money-management tools so customers can avoid getting into a poor position; and third it will help customers compare the costs of overdrafts.”

The CMA has also been criticised by the debt charity StepChange, which has argued for a regulated maximum overdraft charge across the whole industry. After the hearing, the chair of the committee, Andrew Tyrie MP, also expressed concern: “The weaknesses identified today were already evident from the interim report of last year. The committee was deeply disappointed by what it heard.”




Barclays’ PPI costs rise by another £600m

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The cost of the payment protection insurance scandal has topped £40bn after Barclays took another £600m hit to pay compensation to customers who were mis-sold the product.

The extra provision, announced as the bank reported a 10% fall in nine-month profits, takes Barclays’ costs to £8.4bn. Data compiled by the thinkthank New City Agenda shows that this top up for Barclays has pushed the total provisions incurred by the industry to £40.2bn. Lloyds Banking Group makes up £17bn of that total bill for PPI mis-selling scandal tops £40bn

Barclays said its extra provision was caused by the cutoff point of June 2019 for claims, set by the Financial Conduct Authority. It added: “We will continue to review the adequacy of the provision levels in respect of the FCA’s proposals, which remain subject to consultation.” In the midst of an overhaul being led by chief executive Jes Staley, the bank insisted it was “open for business” after the Brexit vote. But Staley admitted he was considering what changes it might need to make to its business as the UK made plans to leave the EU.

Barclays chief executive Jes Staley insisted Barclays was ‘open for business’. Staley said: “We are looking at our options. We will take incremental steps. We are engaged in active discussions with the British government. Our desire is to stay as fully invested in the UK as we can.”

This week, the Observer reported a warning from Anthony Browne, the chief executive of the British Bankers Association, that bosses had their hands “quivering over the relocate button”. Staley said while Barclays was looking at its options, “I wouldn’t say our finger is quivering. Our intention is to stay as much invested in London as we can. We are a British bank.” In July, Staley said operations might need to be strengthened in Ireland if the government did not clinch a passport deal that gave access to the remaining 27 EU countries.

The bank’s shares were the biggest risers in the FTSE 100, despite the extra charge for PPI and the £150m hit to cover costs incurred in reducing office space because of job cuts. The bank would not disclose which office was affected, but it has been reported that it has been in talks about leasing space in Canary Wharf to the government. The shares closed 4.5% higher, at 190p, after the bank reported that its profits fell to £2.9bn in the nine months to September, triggered by a loss in the non-core division that houses the operations Staley has earmarked for sale or closure.

Staley joined Barclays in December and set about selling off the bank’s operations in Africa. He said: “The growing momentum in attaining our strategic goals means we can feel optimistic of our prospects of completing the restructuring of Barclays – a restructuring to a simplified, transatlantic, consumer, corporate and investment bank with the capacity to deliver sustainable, high-quality returns for shareholders. This quarter has seen us take another important stride toward that state.” The vote to leave the EU had been a political shock, Staley said, but consumers had recovered swiftly.

“The referendum was a political shock, not an economic shock. I think consumers have recovered from that, but there has been an impact in the currency, which directly impacts the consumer,” said Staley. Barclays said it remained in discussions with the US Department of Justice over a settlement related to mortgage bond mis-selling.


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