Financial services group Hargreaves Lansdown says:
“Around £40 billion has been wiped off the value of banking stocks in the last two days, with over £8 billion wiped off house builders, representing around 18% and 37% of their total market capitalisation respectively.”
“Hinkley
27th June 2016
EDF’s plans to build an £18bn nuclear power plant at Hinkley Point in Somerset will be subject to a fresh wave of uncertainty following Brexit.
EDF reiterated its commitment to the project, which has already suffered repeated delays, after Brits voted to leave the EU on Friday.
But asked whether Brexit could lead to Hinkley being scrapped, Angus Brendan MacNeil, chair of the energy and climate select committee, said: “Anything could happen … Hinkley is in a very different position this week than it was last week.” “At the very least the final investment decision (FID) will again be kicked down the road … you can’t see the French committing billions to a country they thought was in the European Union and is no longer.”
Peter Atherton, utilities analyst at Jefferies, said: “It’s yet another added complication in what’s already a very complicated process.” He added that if chancellor George Osborne, who is a strong supporter of the project, leaves the Treasury his replacement “might take a somewhat different view”. …
LEP member SC Innovations Ltd (Supacat, M D Nick Amey) is making it clear exactly what it is expecting from its nuclear activities:
“… SC Innovation is Fit for Nuclear (F4N) accredited by The Nuclear Advance Manufacturing Research Centre (NAMRC) and is also the first South West England based engineering business to open an office in the Somerset Energy Innovation Centre (SEIC). The centre has been established to create collaborative opportunities for prospective Hinkley Point C contractors to engage with local and regional companies.
“SC Innovation can offer a flexible range of attractive opportunities to potential partners. We can offer workshop facilities and capabilities including subassembly, testing, verification and validation acceptance testing as well as documentation management. We can also project manage the local supply chain where they can benefit from our access to over 2000 suppliers in the south west region”, said Joe Wilcox, Head of SC Innovation. “One of our core competencies is delivering engineering projects in sectors which demand a high level of compliance with strict regulatory and technical standards, as evidenced by our F4N status”, said Joe Wilcox, Head of SC Innovation.” …
No conflict of interest there then!
Exeter, Cornwall, Plymouth and North Devon – immigration (unsurprising)
Torridge and the South Hams – expats (obviously second-homers on both sides of the channel!)
Mid Devon, West Devon and Teignbridge – NHS (they are about to lose several local hospitals)
And East Devon? The economy. The only area that searched first on the economy.
Owl thinks it’s because lots of East Devon developers (particularly those at the Growth Point and Cranbrook) farmers who might become developers ( you know who you are) and councillors worried about paying for their new HQ hogged the search engine!
Wonder what our LEP members searched for? Still waiting for that upbeat press release, guys.
Update: the nearest other county that searched for the economy near us was North Somerset – so close to Hinkley C!
Just seen this Facebook page “About directly elected Mayors in England and Wales”and just LOVE the “Related Pages” links to:
“… Thursday’s referendum delivered a 52% vote in favour of leaving the EU, causing David Cameron to resign as prime minister and £120bn to be wiped off the FTSE 100.
Alexandra Jones said: “Now that the result of the referendum is clear, we need to focus on what happens next. It’s too early to understand the full implications of Brexit for places across the country, but the political and economic uncertainty ahead will clearly have a huge impact on the future of UK city economies.”
She added that there are “big questions” about how Brexit will affect cities which have historically relied on EU funding to strengthen their economies, as well as places which have been able to attract international jobs and investment partly due to the UK’s membership of the Single Market.
“There is also a serious risk that the government’s devolution agenda will come to a standstill, with the political focus likely to shift to moving powers from Brussels to Westminster, rather than empowering UK cities to grow their economies,” said Jones.
“In the weeks ahead, it’s vital that political leaders seek to provide as much clarity and certainty on these issues as possible, and demonstrate that UK cities remain open for trade, talent and investment.” …
OK next PM, let’s make it simple. You now have three choices:
1. Invoke Article 50 the day you become PM
2. Invoke Article 50 soon after you become PM
3. Find an excuse not to invoke Article 50
If you settle for (1) or (2) it is probably not a good idea for you to go for the Norwegian model – they pay to be in the EU but they don’t get any voting rights AND they have to accept free movement. Either (1) or (2) means LOTS of negotiating (by lots of extra civil servants you need to recruit NOW, by the way) as, if it takes more than 2 years, you walk away with nothing or whatever scraps the EU chooses to throw at you on the way out. And if it is (1) or (2) why wait? Just do it.
If you settle for (3) you pee off A LOT of the English and Welsh, but you make a lot of people in Northern Ireland and Scotland (and the EU) very happy. And you can blame LOTS of people for having had to take the decision, though your career might be rather short-lived. Good to have a Plan B with this one – maybe a job with an EU bank in Frankfurt.
So, if you still really haven’t decided what to do by this point, sit down with the people you trust, lock the door and don’t come out until you have made a decision. If you are still there after 24 continuous hours, it is an automatic (3).
Owl is glad to have helped.
Owl eagerly awaits the pronouncements of:
Paul Diviani – EDDC
John Hart – Devon County Council
and
Chris Garcia – Heart of the South West Local Enterprise Partnership
on how leaving the EU will affect our locality, their plans and their budgets.
You did all have a Plan B for this eventuality didn’t you?
The fundraising for murdered MP Jo Cox is attempting to raise £1.5 million for causes which were dear to her, including those for reconciliation and aid for refugees. As of now it is only £69,000 short of this target.
Donation via:
“The 2007-13 round of the European Regional Development Fund delivered 65,000 jobs and more than 15,000 new businesses.
The main priorities in the Heart of the South West for this round of the programme are:
• research and innovation;
• supporting and promoting small to medium-sized enterprises;
• low carbon;
• Information and communications technology …
… A total of £116,315,073 of ESIF has been provisionally allocated to the Heart of the South West LEP, made up of: £57,596,574 European Regional Development Fund; £43,178,166 European Social Fund and £15,540,333 European Agricultural Fund for Rural Development. (Exact figures will vary slightly reflecting changes to exchange rates.)
A European Strategic Investment Fund Committee for the Heart of the South West has been established. This committee, which was set up following an open advertisement, is made up of leading figures in the HotSW private and public sector and is on hand to assist and inform potential applicants about the process and advise on criteria that is most likely to achieve success. …
… The European Growth Programme is worth just over €7.3billion (almost £5.8billion). It is made up of the following three Funds:
• European Regional Development Fund (€3.6billion)
• European Social Fund (€3.5billion)
• Part of the European Agricultural Fund for Rural Development* (€221million)
The Rural Development Programme 2014 to 2020 has a total value of over £3.5 billion, of which €221 million will be invested through the European Growth programme to help promote rural economic growth.
We have agreed the major points of principle about the ERDF operational programme with the European Commission. Therefore, although the programme document has not formally been agreed, we feel able to invite applicants to apply for funding. The references in the call documents are based on the latest text of the ERDF Operational Programme. This text may be subject to further amendment during final agreement with the Commission. We will take the possibility of relevant changes to the text into account when assessing outline and full applications, and where such changes occur, will notify applicants of any issues that arise, and propose a method of dealing with them. We expect the operational programme to be formally agreed before the need to enter into funding contracts with applicants.
Between 23 March and 27 March, calls for projects are going live across all three of the above programmes. These can be accessed at http://www.gov.uk/european-growth-funding.
European Structural and Investment Funds
The Department for Communities and Local Government and the Department for Work and Pensions are the managing authorities for ERDF and ESF funding through the Growth Programme, funds established by the European Union to help local areas stimulate their economic development. By investing in projects the funds will help to support innovation, businesses, skills and employment to improve local growth and create jobs. For more information visit https://www.gov.uk/european-growth-funding”
http://www.heartofswlep.co.uk/news/new-european-funding-programme-opens-today
“According to figures from the Cornwall and Isles of Scilly Local Enterprise Partnership (LEP), the region was on course by 2020 to have benefited from a total of £2.5bn of funding – EU cash matched with public and private investment – since the turn of the century.
Headline projects completed with EU backing have included a £132m scheme to bring super-fast broadband to the far south-west, three innovation centres, rail line improvements and the development of a glitzy university campus at Penryn, near Falmouth.
It wasn’t going to end there. Between now and 2020, key projects supported by EU funding were set to include exciting work around aerospace – with Newquay touted as a possible site for the proposed spaceport announced in the Queen’s speech – and in geothermal energy.” …
… In the hours that followed the referendum result, Cornwall council and the local enterprise partnership (LEP) sought reassurances that they would not lose their funding and were mocked on social media, where critics claimed they had voted out and then asked if they could keep the EU cash anyway.
Sandra Rothwell, chief executive of the LEP, told the Guardian it wasn’t like that. “Cornwall was one of those places with a high percentage for leave and we’re not asking Europe if we can keep the money anyway. Our focus is on getting a message to national government: We have a clearly evidenced economic need, we have very clear plans of what we want to do. We have been delivering that plan on the basis of investment up to 2020. That plan needs to continue.”
Rothwell has asked for assurances about how Cornwall will continue to be funded, both up to the point where the UK leaves the EU and in the years after that. “There has been no clarification yet,” she said.” …
… EVERYTHING today is national. No-one appears to have a clue what is going on or what will happen next.
Normal service may be resumed tomorrow, but don’t bank on it! If it is, Owl will be here!
So, we voted out – and suddenly housebuilders (developers) shares plunged by 40%.
There does not seem to be an immediate link with voting out, but there is. We are in for an unstable time. There will be a recession and pundits differ only on whether it will be short (around 2 years) or long (anywhere from 5-20 years depending on who you listen to). House prices will reflect this by falling and mortgage rates may well rise, pushing some into negative equity and others wary of buying in case they fall into negative equity.
Housebuilders will also need to factor in higher import costs coming in the near future when EU trade reduces and new trade agreements have not begun, along with a local skills gap as workers from the EU dry up. Plus likely (possibly temporary)increases in income tax to cover lost government income from (again possibly temporary) shrinking markets. Not to mention higher unemployment benefits to those whose jobs currently depend directly and indirectly on those employers who would normally benefit from being in the EU.
To compound this, many developers have recently taken their huge profits out of their businesses by giving their directors massive bonuses.
All these factors cause a “perfect storm” for Local Plans and the general East Devon economy. Our Local Plan is predicated on continuous growth and increasing employment, fuelling a constant demand for new housing. And, more worryingly, there are penalties if this does not happen. If we (and all other councils) do not maintain a 5-year land supply, we are penalised by having our housing numbers INCREASED by 20%.
Another complication is that, currently, our council (and others) depend for income on the government’s “New Homes Bonus” – the more new homes it gets a developer to build, the more income it gets.
All this conspires to suddenly make our local plans hardly worth the paper they were written on.
Then there is devolution – which in Devon and Somerset also highly depends on housebuilding – having “promised” an extra 176,000 houses over and above Local Plans, and also dependent on continuous growth and constantly increasing employment. It is no coincidence that the Chairman of our Local Enterprise Partnership (LEP: the lead in the devolution bid) is Chairman of big developer, Midas.
Our LEP was also promised “jam tomorrow” funds (over 30 years) from the government AND anticipated masses of EU funding, all riding on the back of a new Hinkley C nuclear power station. All other devolved areas were given similar promises.
Our new government will now have its hands full attempting to negotiate its way out of the EU, rewriting or scrapping those EU laws we have (including those on environmental protection and workers rights) and trying desperately to work out where this notional extra £350 million a week is eventually going to be spent. It has already been promised to the health service, areas currently in receipt of EU regeneration funding and academic research programmes currently supported by EU grants. That is simply an arithmetical nightmare and almost certainly an impossibility.
This leaves East Devon in a precarious position: heavily dependant on new housebuilding and continuous year on year economic growth with constant employment growth and receipt of funds from a distracted government which has also promised to stem immigration – many having voted for this as its first priority. These two priorities will mean little time for other things. Not to mention having to deal at the same time with the implications of Scotland and Northern Ireland’s differing position on their future in the UK and EU.
The Local Plan and devolution deals are now almost certainly of much lower priority to this beleaguered government and this may well lead to unintended consequences the like of which our council and our LEP can only imagine and for which they have no plan B.
Many warned that economic growth and increasing employment between now and 2030, when our local plan ends, was unattainable and that at least one event would intervene for which there was no contingency. Few expected it to happen quite so quickly.
““If you haven’t got money, you vote out.” We were in Collyhurst, the hard-pressed neighbourhood on the northern edge of Manchester city centre last Wednesday, and I had yet to find a remain voter. The woman I was talking to spoke of the lack of a local park, or playground, and her sense that all the good stuff went to the regenerated wonderland of big city Manchester, 10 minutes down the road.”
or, in the case of East Devon:
If you are not in with the powerful in-crowd, you vote out. If you are in Axminster on the hard-pressed eastern side of East Devon … that has seen its local playing fields gobbled up by a developer, a muddy broken-down S106 playground that has been hedged in by mean housing, feeling that all the good stuff has gone to the councillors and senior officers in their new HQ in Honiton and the “regenerated” Seaton 10 minutes down the road?
“Councillor Paul Diviani, Leader of EDDC, said: “The British people have spoken and why not? They were asked a question and they have answered it.
As far as I’m concerned it was the right answer because I trust the electorate to get the answer right.”
http://www.midweekherald.co.uk/news/eu_referendum_eddc_leader_says_i_trust_the_electorate_1_4590816
ER … ONLY WHEN IT AGREES WITH HIM!!!!
This was published by the Daily Telegraph a few days ago, and now Brexit is a reality it should be read with new eyes:
“Perhaps the most powerfully held aspiration for Brexiteers is to restore UK parliamentary sovereignty: in the words of Michael Gove, to “take back control” and, of John Redwood, for Britain to “be a democracy again .
But what would this “taking back control” mean in practice? Brexiteers imply that while EU legislation is “imposed”, Westminster parliamentarians control non-EU law-making through active debates and votes.
Except they don’t, because for voters what impacts on their lives most is not primary legislation – Bills – on which parliamentarians can vote, but the meaningful detail of the Bills, which Whitehall civil servants and ministers increasingly choose to hide in secondary legislation (sometimes called delegated legislation of Statutory Instruments – SIs).
The scale of this was estimated for the Lords by former minister Baroness Andrews:
“80 per cent of the laws as they impact on individuals are transported through statutory instruments, whether that is welfare benefits, food safety, planning requirements or competition across the NHS…”
Essentially Whitehall civil servants and ministers are defining important laws as “secondary legislation” in order to subvert the ability of parliament to choose whether to pass or not to pass laws.
Brexit is no guarantee of British control of its own destiny or of parliamentary sovereignty because our parliament is not in control.
SIs are rarely debated, and historic Westminster procedure means they cannot be amended. The idea that parliament meaningfully votes to “pass” them is no more real than the idea that the Queen gets to decide the content of the Queens Speech.
The problem is not new. An official Parliamentary report published in 2011 found that the last time the House of Commons rejected a SI was in 1979; it appears from the Hansard record that the rejection of this SI may have been a mistake.
The House of Lords, despite a 1994 resolution affirming its ‘unfettered freedom to vote on any subordinate legislation’, has voted down secondary legislation on only three occasions in the last half-century.
That one reason why the Lords’ hard line on the tax credits SIs in October 2015 caused such consternation in government and David Cameron to appoint Lord Strathclyde to review Lords powers and recommend further action.
The erosion of parliamentary sovereignty by the growing use of secondary legislation and “Henry VIII clauses” (which give ministers powers to change primary legislation through Statutory Instruments and thereby bypass the need for parliamentary votes) to reduce the parliamentary accountability of ministers and Whitehall civil servants was dubbed “The New Despotism” in a book by Lord Hewart of Bury, Lord Chief Justice of England and former Attorney General, published as long ago as 1929.
This would not change outside the EU. The problem was just as real before Britain joined the European Community.
Labour MP Willie Hamilton told parliament in the 1971 European Community accession debate:
“A great deal goes on even now under our own eyes that we do not know about… some 2,000 Statutory Instruments, which have legislative effect, go through this House every year and only a handful of them are debated. This is already government by default. In that sense this House, voluntarily and negligently, has surrendered a large part of its sovereignty to the Executive…. Much play has been made of the decision-making by the bureaucrats in Brussels. Things are not as simple as that. What about our own faceless bureaucrats in Whitehall? What part does this House play now in making policy decisions and in framing legislation? We have none at all. Everybody is consulted except us. Therefore, let us not pretend there will be any serious derogation there when we get into Europe.”
Some Brexiteers, notably Douglas Carswell, have a track-record of championing democratic accountability in Britain’s Westminster parliament. But they are the exceptions. Most are happy to indulge a Westminster parliamentary processes and rules more akin to Mornington Crescent than to cricket. Westminster “parliamentary sovereignty” would be no more certain of “returning control” to British voters, than a sovereign British space programme would be of sending a union-jack adorned rocket to Mars and getting it back in one piece.
That is nothing to do with the EU – if voters do back Brexit to “take back control” they could find themselves holding a political pudding whose democratic promise has been significantly over-egged.
http://www.telegraph.co.uk/news/2016/06/19/brexit-wont-return-power-to-mps-in-parliament-because-parliament/
“The devolution genie is out of the bottle. As we debate our future sovereignty there needs to be a strong role for local governance.
So now we know. Or do we? The UK faces months of uncertainty as the consequences of the Brexit vote, followed by David Cameron’s own exit, play out.
As all eyes turn to messy wrangling at Westminster, where does this leave local government? At this moment, the sector needs its voice heard, and clearly.
As a priority, local government needs a seat at the table as the financial and legal implications of Brexit are considered. The sector needs clarity over the replacement of nearly £6bn of European Structural Investment Funds invested in regional infrastructure, skills and youth unemployment schemes across the country. These funds play an important but largely hidden role in community infrastructure, with little public understanding of them. A Leave-led government will need to commit to continuing these or face huge local disruption. Beyond that, the practical implications for local government in legal and regulatory terms over huge swathes of activity – procurement, waste collection and disposal, energy efficiency – will need to be understood by those navigating the consequences of working outside EU directives.
Secondly, the future of devolution is by no means certain. George Osborne’s political future remains as bound to Cameron’s as it has ever been and so is now in serious doubt. Since devolution to date has been driven by a chancellor who invested his personal political capital in the agenda, local government now needs to make the policy resistant to personnel change at the Treasury. Whatever happens at Westminster and Whitehall, the impending invocation of Article 50 and ensuing trade negotiations will consume the energy of SW1 – so new and deeper devo deals will be much harder for the foreseeable future.
Thirdly, the repatriation of powers from Brussels to the UK will strengthen the supremacy of Parliament. It is likely that Scotland and Northern Ireland’s Remain majorities raise questions about their future within the UK. Local government in England needs to make sure any constitutional discussion does not stop at the national level and addresses how we are governed more fully. The Referendum vote lay bare the geographical divides within England and the alienation of swathes of the country from the Westminster establishment.
It is clear that representative democracy as we know it is in crisis – to ensure legitimate government in the future we need a serious discussion about where power lies and how our communities can have more influence in their own future. For those of us who are localists this is a given – but the terms of the national debate are not yet set in this way and they need to be. Local government needs to be heard.
Over the coming months there will be more opportunity for this. Continued dysfunction at Westminster, with both main parties divided from the Referendum fallout, gives an opportunity for local leadership to stand out on the national stage as never before. By the end of this year, candidates for new directly elected mayors will be in place and many of our city and county regions will have the opportunity to decide the future of their places. Will this help to shift the centre of political and constitutional gravity away from Westminster? Can we breathe new life into our struggling national democratic culture? Time will tell, but it is likely that the politics and kinetic energy generated by the referendum will continue and may influence these elections in ways we cannot yet foresee.
As we continue a national discussion over what sovereignty looks like, we need to make sure there is a strong local dimension which gives life to the rich diversity of our nation of cities and shires. The devolution genie is already out of the bottle and even as the Westminster bubble bursts, stronger local governance has the opportunity to take on a new life of its own. The future legitimacy of our democracy may well depend on it.”
http://www.publicfinance.co.uk/opinion/2016/06/brexit-raises-questions-about-osbornes-devo-push
“The Local Government Association has called for councils to be given “a seat around the table” when decisions are taken over how to replace EU laws as part of the UK’s exit negotiations.
In a statement issued in the aftermath of the vote for the UK to leave the EU, the LGA said: “It is vital that local government is part of the team. EU laws and regulations impact on many council services, such as waste, employment, health and safety, consumer protection and trading and environmental standards.
“There cannot be an assumption that power over these services is simply transferred from Brussels to Westminster. If services are delivered locally, then the power over how to run them should rest locally too. Decades of centralised control over funding and services has distanced our residents from the decisions that affect their everyday lives. With greater control in our areas we can improve services and save money.”
The LGA also called on the Government to protect the “vital” £5.3bn of EU regeneration funding allocated up to 2020. This was necessary, it said, “to avoid essential growth-boosting projects stalling and local economies across England being stifled”. …
Whither Hugo Swire, who backed the losing side?
Whither devolution where much was based on EU funding?
Whither housebuilding and Local Plans?
So many questions and, as yet, so few answers.
Brave New World …
“EDF’s nuclear plant at Hinkley Point could face further delays after its workers launched legal action against the company in French courts and asked for the project to be put off.
The Works Council at EDF claims the energy firm has refused to grant access to key documents and that staff have been left unable to form a clear view on Hinkley.
The plant was due to be running by 2017 but the company is now aiming for completion by 2025, and has yet to make its final decision on how to raise the £18billion needed.
The decision was due in May, but delayed to consult the unions. Some representatives of EDF workers have asked for Hinkley to be put off for another three years – something the French energy company does not wish to do.
Their concerns echo those of senior managers at EDF, who last week wrote to the Energy and Climate Change Committee calling for Hinkley to be postponed.
In May, EDF’s UK boss Vincent De Rivaz faced questions from MPs over its failure to reach a funding decision last month, as had been promised.
If EDF fails to make its decision by September, it will be called back before the select committee again in October.
Jean-Luc Magnaval, secretary of the EDF workers’ committee, has said that even if judges force EDF to hand over the documents in question, the unions will struggle to come to a decision by their set deadline of July 4.
EDF said it had supplied comprehensive information on the project to the unions and participated in meetings to enable representatives to reach a decision in time.
A spokesman for EDF said: ‘EDF is confident in the quality of the information it has provided to the [union] in support of the Hinkley Point C project.’”
East Devon Watch 