Lockdown – Reflections at the end of week 59

The sparkling sunshine of the early morning today carries the promise that Spring weather isn’t a myth or a vague vestigial memory of times long gone and that I will be soon able to mothball the ancient and disreputable looking dog walking coat for a few months - not that any self-respecting moth would have anything to do with it.

It has been a week touched by optimism in the UK. The numbers of vaccines delivered continue to rise and the numbers of reported infections continue to fall. The Bank of England has revised its economic growth forecast up to a level not seen since the industrial revolution and its prediction of peak unemployment levels down, also by a substantial margin. I have also read a piece of crystal ball gazing this week published by a firm of corporate recovery and restructuring specialists which suggests that whilst there will be a couple of spikes in corporate failures in July and October this year, each being a point at which particular government support measures run out, there is unlikely to be a significant overall increase in corporate failures due to the pandemic. The Bank of England has pointed out that the expected increase in GDP will be a bounceback rather than new growth, and the recently announced personal debt relief measures are evidence that life isn’t and won’t be rosy for everyone. However, the overall picture is a good deal more encouraging than many dared to hope at times during the last 12 months.

Harold McMillan and Boris Johnson were both educated at Eton and Balliol College, Oxford, and share the distinction of holding the office of Prime Minister as leader of the Conservative Party. The Hartlepool by-election result appears to show that they have at least one other thing in common. McMillan is commonly reported as having replied, when asked what was the greatest influence on his administration, with the words “Events, dear boy, events”, and it seems highly likely that an elderly Boris Johnson, looking back several years from now on his political career, might well say the same thing. Many political commentators are expressing the view that the Hartlepool result, in which the Conservatives have won the seat for the first time since its creation in 1974, is attributable substantially to the ongoing influence of the Brexit referendum and impact on the 2017 general election and to voters’ perception of the success of the UK’s vaccination programme. Whilst it also seems clear that the Labour Party is in the midst of an existential crisis, with a lack of clarity as to where its core principles and purpose lie, it’s also hard for the party to resist the influence of events.

The influence of Brexit has also popped up this week in Jersey, where the skippers of French fishing boats, on the 200th anniversary of the death of Napoleon, chugged into St Helier to blockade the port. The UK government’s response was to take a leaf out of Viscount Palmerston’s book and send in the gunboats. After a touch of excitement, everyone went home.

As Michel Barnier tucks into his fried breakfast, the prospect of a land border between the EU and the UK but running along the boundary between England and Scotland may also be appearing on the horizon as we wait to see if the results of the Scottish Parliamentary sees overall control going to the SNP which would, in turn, bring significant further pressure for a Scottish independence vote. Whatever you may think about Scottish independence, this is another illustration of the influence of events, and in this particular case, the law of unintended consequences. When setting out on his spree of referenda, David Cameron’s aim was to keep the UK in the EU and to retain Scotland within the UK. The offer of a referendum on EU membership appeared to be driven in part by concern at the possibility that UKIP would nibble away sufficiently at the traditional Conservative vote to cause the party problems in the 2015 general election. As it happened, that concern was unfounded because the effect of the Scottish referendum turned out to be to eradicate the Labour Party’s hold on Parliamentary seats in Scotland, thus delivering a Conservative majority but whilst at the same time significantly strengthening the SNP. Voting analysts also speak of the SNP having garnered support from disgruntled Scottish remainers, with an independent Scotland likely to look for membership of the EU. Mr Cameron also seemed to be unaware that, for those wanting change, referenda are never decisive until they deliver the desired result, at which point they become irreversible expressions of a nation’s choice.

And so back to fish and to the industrial revolution where it’s also been a good week for twaite shad everywhere. For the very few of you who don’t already know, the twaite shad is a member of the herring family that swims up freshwater rivers to spawn and is partial to the River Severn. During the industrial revolution, weirs were built in the Severn which has made the twaite shad’s journey upriver difficult if not impossible. Two out of a planned six fish passes have been completed, with the other four on the way, which, it is hoped, means that a once plentiful species will recover from its current endangered status. At which point, French fishermen demanding a quota will blockade the port of Bristol…

Have a good weekend.

Ian Waine leads Prettys’ Corporate Services Team and has advised on a large number of corporate recovery and corporate restructuring cases over the last 30 years. He can be contacted at 07979 498817 or iwaine@prettys.co.uk.

Ian Waine
Senior Partner