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Archive for December, 2018

2019: So, what happens next?

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A cross-party group of MPs recently warned that Brexit was “sucking the life” out of Theresa’s May government. They are right: this week David Lidington, May’s de facto deputy PM, is tasked with finding policies that can be ditched so government and the civil service can focus on no deal planning.

Escalating fears of the UK crashing out of the EU without a deal will worry businesses who are yet to receive specification from government on the type of Brexit they should prepare for. The Cabinet Office’s nationwide email and leaflet campaign on business planning will provide scant reassurance.

The government’s social care green paper, and draft Domestic Violence Bill are likely casualties of Whitehall’s divided attention. The NHS, rising knife crime, public transport, homelessness and the environment remain national imperatives. But as warning sounds of no deal get louder, government and officialdom must turn its engines toward planning an outcome few wished for or expected. Hold tight for 2019…

But what do we know for sure will be on the agenda in the new year? The Spending Review, the process through which government decides how much it’s going to spend in the next few years, will be taking place. Departments will be looking at where they should spend money as well as where they need to make efficiencies. The people and businesses affected by these spending decisions will be seeking to influence them before they are finalised.

How did we get here?

It’s impossible to look ahead to next year without first looking back and assessing where politics has left us in 2018.

Months of acrimony and countless ministerial resignations have ensued since May published her Brexit plan in July. We have reached the end of the year with the plan as good as dead, a failed leadership coup, and staring quite possibly down the barrel of a no deal Brexit in March next year.

As constitutional and parliamentary deadlock has consumed the government, Jeremy Corbyn’s supporters have hailed the Napoleonic doctrine of not interrupting an enemy when they’re making a mistake. Those looking for clearer opposition and alternatives from the Labour leadership have not found the grand historical comparison as convincing and are left disappointed.

So, where now? We could leave the EU without a deal, there could be a second referendum, Parliament could hold advisory votes on alternative courses of action, Article 50 could be extended, or a general election could be called.

Brexit: is the end really nigh?

Yes. The UK is due to leave the EU on Friday 29th March 2019. Despite her efforts, May failed to re-open negotiations at last week’s European Council meeting and it looks virtually impossible that she will be able to allay the concerns about her proposed deal that have driven so many of her ministers to resign, her own MPs to seek her removal, and every other party to state that it will oppose the deal in Parliament.

Of course, opposition hinges on the so-called ‘backstop’, the process that would effectively keep Northern Ireland in the Single Market if a longer-term trade agreement is not reached after the transition period. It has proven too bitter a pill for many to swallow and will not be resolved before the rearranged vote in January. Even the threat of no deal has not been enough for most MPs to say they’ll support it.

Going into next year Brexiteers and Remainers in parliament might have to look again at what they’re prepared to compromise on to avoid another breakdown in process. Lest we forget, while the Conservative Party is broadly Eurosceptic, parliament is not. There may not be a majority among MPs for May’s deal, but there is no majority for a no deal either. However, there is a big risk the UK could sleepwalk into a no deal scenario because government and Parliament has failed to agree an alternative way forward.

Entering election territory

The next election is not due until 2022 under the Fixed Term Parliaments Act but one happening next year is certainly not unlikely. Labour, despite its dithering this week on the much-threatened no confidence motion in the government, is enthusiastic about an election. The sheer attrition of the Tories’ mishandling of Brexit could be enough to push Labour over the line if an election is held, even if the Conservative Party is marginally ahead in current polling. Labour would then have the platform to invoke a radical policy programme to tackle the social injustices that, many in the party argue, helped cause a leave vote in the first place.

The DUP’s position is more complex. They hate the PM’s deal; the possibility of further constitutional divergence from the rest of the UK is too much for them to bear, having cheered so blithely for a ‘leave’ vote during the referendum campaign. However, they are arch political operators and know that a Labour government led by a PM with pronounced republican sympathies, would not be in their interests either. The DUP is surrounded by unpalatable options on all sides and the extent of their opposition to the Withdrawal Agreement shouldn’t be underestimated; their tacit, continued confidence-and-supply support for Theresa May is not guaranteed.

For the Conservative Party itself, there may also come a day of reckoning in 2019. MPs from the Thatcherite and wet wings, distant though they are, stick at it together, mindful that the UK Conservative Party is the oldest surviving political party in the world and they don’t want to preside over its demise. But such is the toxicity of division over Brexit, the stress of these divisions may prove too much. MPs have already come forward to declare they’ll resign the whip if no deal becomes policy.

If Theresa May goes, then what? Who takes over? Did they vote leave or remain? Do they want a hard or a soft Brexit? You can almost already hear the squabbling.

WA says

There’s so much uncertainty that it can be a worrying time for a lot of people working in business, public services, and the third sector. Often, the noise around the Brexit debate can be confusing and makes it more challenging for organisations to plan a way forward.

As an agency we specialise in helping our clients with complex political and commercial issues. This can involve keeping them up to date on what’s happening, what developments could mean for their organisation, and providing versatile and creative advice which really adds value.

As we head into 2019, if there’s a burning question or issue for your organisation that you think we could help with, don’t hesitate to get in touch and one of the team will be delighted to chat.

The WA Communications team

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The future is female: how women’s health got technical

The #MeToo and Time’s Up movements have created (and been a direct response to) some of the biggest headlines of 2018. They have created a renewed focus on many of the lingering inequalities women continue to face in the workplace, as members of society (both in the UK and elsewhere) and in the eyes of the law –  a study by the Fawcett Society in January 2018 found that the UK system continues to fail women, and called for fundamental reform to increase access to justice and offer additional protections against harassment.

Despite ongoing challenges, ever greater numbers of women from all walks of life are continuing to step into formal and informal political arenas, with a record number of women elected in the US Midterms, sparking comparisons with ‘the year of the woman’ in 1992.

Against this political and societal backdrop, $400 million has been funnelled into femtech startups.

The term “femtech” was coined in late 2016, when Ida Tin, the founder of menstrual tracking app Clue, came up with the word to describe a sector that had started to quietly gather momentum. The femtech industry, made up of largely female led start-ups focusing on women’s health and wellbeing, has developed as a result of the desire among women to seek out alternatives to hormone-derived contraceptives and has expanded to include tech specifically catering to all aspect of women’s health, including post-natal care and female specific medical conditions. Consumers are increasingly demanding a major point of difference between medical options available to them, for example in contraceptives, where all conventional options are hormone derived, rather than offering non-hormone-based options. Start-ups are increasingly filling the gap that conventional pharma companies have yet to fill, creating apps and devices for women that range from daily monitoring of reproductive cycles to new treatments for chronic long term medical conditions based on technology, rather than pharmaceuticals.

The negative impact a lack of diversity (not only gender-based) in boardrooms has on business success is well-documented. A report by Grant Thornton found that a lack of diversity means companies fail to challenge their own assumptions and bring new ideas to the table. This is having a particular effect on the ability of the femtech industry to expand. There remains a disparity between the amount male-oriented health companies can raise, and the amount female-oriented companies can expect to raise. Ro and Hims, both specialists in male specific conditions, raised over $170 million between them this year, nearly half the amount raised by an entire industry of femtech leaders. This has been partially attributed to the makeup of the boardrooms femtech leadership pitch to, with femtech leaders stating that the disproportionately high concentration of men in the investment community make their products ‘unrelatable’, leading to ‘uncomfortable’ pitches that hamper sector growth.

Market analysts Frost & Sullivan have forecast femtech will be worth $50 billion by 2025 – a rapid expansion for an industry currently made up of 200 start-ups scattered around the globe. They found that women are 75 per cent more likely to use digital tools for health than men and that working age women spend 29 per cent more per capita on health than men of the same age. Given these figures, the opportunities are clear, however, currently just 10 per cent of global investment goes to female-led start-ups.

From a political perspective, much of the drive for women to take charge of their own health has been helped along by the re-politicisation of reproductive health and women’s rights. The election of President Trump in America is frequently cited as a galvanising moment for women globally, who have become concerned by his tendency to insult women he disagrees with and brag about sexual assault prior to his election. Additionally, while in office, Trump has become known for his promotion of anti-choice judges and politicians.

Battles to normalise women’s issues have taken place in Parliament too. In 2015, Stella Creasy MP made headlines for forcing Conservative MP Sir Bill Cash to say the word “tampon” in a parliamentary debate. The image of a young, female MP persuading a middle aged male Conservative to talk directly about the ‘taboo’ subject of women’s health and menstruation was something of a milestone in a parliamentary system not known for moving with the times. Creasy made headlines again in October 2018 when, following a referendum in the Republic of Ireland in favour of ending the ban on abortion, she and fellow MP Conor McGinn successfully passed a series of symbolic amendments to the Northern Ireland Bill in Parliament forcing the Northern Ireland secretary, Karen Bradley, “to issue guidance” to explain how officials can continue to enforce the ban. Given the issue is a devolved one, the real-world ramifications are likely to be limited, but as a symbolic gesture it was a powerful one –  it became an embarrassing subject for the UK government, given their confidence and supply agreement with the DUP, who are stridently anti-abortion. The DUP is unlikely to change its opposition to ending the ban on abortion, but they are increasingly isolated on the issue, with their view seen as increasingly unacceptable across all mainstream parties.

As more femtech products show that new ways of approaching female health are not only possible, but popular, investors will become aware of their growth potential and transformative effect on the health market. Elvie, a femtech start up that manufactures pelvic trainers, has just entered into a contract with the NHS that has the potential to save the NHS over £400 per female patient annually.

It hasn’t all been plain sailing for femtech companies, particularly those dealing with female contraception. In August 2018 an advert for Natural Cycles, one of the most high profile contraceptive apps, was banned by the Advertising Standards Authority after it found that their claim to be “highly accurate” at preventing unwanted pregnancies was misleading. Such headlines have caused some reputational damage for the fledgling industry, raising doubts about the viability of non-hormonal contraceptives, which remain a significant focus for femtech businesses. However, wider enthusiasm for alternatives to conventional contraception and medical treatments remains high, proving the continuing consumer enthusiasm for femtech.

Against this backdrop, femtech has the potential to make it far easier for women to take control of their own health. The consumer market is ready and willing to pay for innovative new options, as opposed to just dealing with the pain and side effects that are often dismissed as being ‘part and parcel’ of being a woman. As investors who benefitted from the consumer interest in men’s health over the last decade can attest, the personalisation of female healthcare holds benefits for both consumers and investors.

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May survives the twelfth day of Christmas as her Brexit deal hangs by a thread

As the carol goes, the twelfth day of Christmas is usually associated with the sound of drummers drumming.

However, in this extraordinarily chaotic year, it is no surprise to learn that the drummers were replaced by relieved Conservative MPs, banging desks in relief as Theresa May faced down a vote of no confidence in her leadership. The Prime Minister remains in office, but is she in power?

A vote of confidence in Theresa May’s leadership became almost inevitable after she decided to pull Tuesday’s meaningful vote at the eleventh hour. The fact that Ministers were on the airwaves only hours earlier, confidently proclaiming the vote would go ahead, only added to the sense of betrayal felt by many Conservative MPs. In their view, the Prime Minister’s deal betrayed Brexit and now she was denying them their chance to throw it (and maybe her) out.

The quick turnaround of the vote of no confidence certainly played to the Prime Minister’s advantage. After the shambolic attempt by the European Research Group a few weeks ago to oust May, they clearly needed time to corral sufficient support. In the end, time was against them. The 200-117 victory in favour of the Prime Minister means that a vote of confidence cannot be called in her leadership for at least a year, securing her position in the party. However, 117 rebellious MPs is sizeable, and should Cabinet ministers decide to resign en masse over the coming weeks, her position could become untenable. For the Conservative Brexiteers, they end the week the way it began: with a Prime Minister and deal they cannot support.

While the Conservatives have been tearing themselves apart, Labour has surprisingly, sat by watching the drama unfold.  The scale of Conservative opposition to Theresa May’s leadership would naturally lead you to believe that it is only a matter of time before Labour tables a vote of no confidence in the government. However, Labour leader Jeremy Corbyn wants to be certain that he can defeat the government. While it is festive season, it remains to be seen whether Turkeys would actually vote for Christmas (Conservative MPs voting against the government in a vote of no confidence). It may also be the case that Corbyn is also unsure of what exactly his next move should be. Those in his party that are pleading for a vote of no confidence are mainly advocates of a second referendum (Chuka Umunna, Margaret Beckett). While the People’s Vote campaign has certainly picked up momentum in recent weeks, the only hope of ever having one is if Labour can get behind it. As Jeremy Corbyn plots his next move, it remains to be seen whether he will give the Remainers inside and outside of his party what they want.

With enemies on all sides demanding different things from Brexit, what next for Theresa May?

Overnight, her position became all the more precarious as EU leaders united to reject renegotiating the Withdrawal Agreement. May’s plan had been to secure concessions from Brussels, mainly around the Northern Irish backstop. The Prime Minister’s plan was to secure a target for a UK-EU trade deal by the end of 2021, thereby ensuring the backstop contained a time limit. Yet the backstop is fundamental to the Agreement for the EU, and the Irish Prime Minister, Leo Varadkar, while happy to offer assurances, will not budge on something that he believes is a fundamental assurance to maintaining peace in Northern Ireland. Despite this, it is still likely that May will secure some form of assurances regarding the backstop, which she will then take back to her Tory Brexiteers and the DUP ahead of a meaningful vote, pencilled in for January 14th. As Parliament stares into the abyss of a no-deal, it is impossible to predict whether political opponents on all sides of the House of Commons will support the Prime Minister’s deal.

Arguably, the most admirable quality about the Prime Minister is that she can often kick issues into the long grass, when defeat seems inevitable. However, with March fast approaching, that grass is running out and attention quickly turns to whether she can command the support of MPs from all sides to pass her deal. If she does, this is only the start of the many painful battles that lie ahead. As we look ahead to the New Year, deal or no deal, Parliament is certain to play a fundamental role in determining our future relationship with the EU.

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Deal or no-deal for May?

It has been another extraordinary week in Westminster. The Government started the week with two significant defeats in the Commons. In doing so, it became the first government in history to be found in contempt of parliament, was forced to publish the full legal advice provided to the Cabinet on the Withdrawal Agreement, and handed parliamentarians a greater say over what should happen if (when?) the government loses the meaningful vote.

This has been followed by speculation around how much the Government is expected to lose by in next Tuesday’s vote and even about the possibility the vote itself might be delayed. Theresa May, however, appears set to press ahead, insisting that this is the only deal available. Her message remains clear; the only alternatives to her approach are no deal or no Brexit. But is this still the case following the success of Dominic Grieve’s amendment?

To answer this, it is important to understand what this amendment does. It essentially allows Parliament the opportunity to express a view on what it wants to see happen if the meaningful vote is lost. This would be achieved by tabling and voting on non-binding motions. This allows different options, not currently backed by the government, to be tested to see if they can command the support of a majority in the Commons.

However, having the tool to this in theory is not the same as being able to organise a majority of parliamentarians in favour of a credible alternative approach with a hope of being accepted by the EU in practice. Remember, no deal will happen unless Parliament can actively agree on an alternative. So let’s examine the various outcomes that could be put forward by Parliament under this mechanism.

Another kind of Brexit – Norway-style EEA arrangement or Canada +++?

Any expression of a desire for a Norway-style EEA deal or a ‘Canada +++’ fails to account for the fact that both these options remain very much on the table by the open nature of the political declaration. Parliament expressing a view in favour of either approach does not obviate the demand from the EU for the Withdrawal Agreement and, specifically, the Northern Irish backstop. The EEA option would mean accepting free movement of people and undermining the UK’s ability to strike independent trade deals, while the Canada option would fail to prevent a hard border on the island of Ireland. There appears to be more MPs willing to back Norway than Canada but, in either scenario, there will still need to be very painful trade offs and the EU’s demand for a fall-back option for Ireland will remain.

Renegotiate the deal

The message from Brussels has been very clear on this point. They will not reopen negotiations on the Withdrawal Agreement unless there is a material change in the UK political landscape, widely interpreted as a second referendum or a General Election leading to a new government. There may be some wiggle room to make cosmetic changes to the political declaration on the future relationship or a declaration. While this might buy off some of the dissenting Conservative MPs, it won’t address the fundamental concerns held by the most hard-line Brexiteers and, importantly, the DUP over the nature of the Northern Ireland backstop. Ultimately, if Parliament does issue a command to attempt re-negotiation it won’t solve anything if the EU refuses to budge.

A second referendum

This is the one option likely to represent a significant enough shift to persuade the European Commission and remaining member states to pause the clock on Article 50. Its popularity appears to have increased as a back-up option to avoid no-deal. However, it is still far from clear that a parliamentary majority can be found for it. Were the Labour leadership to pivot its position and back a second referendum (as appears possible) that would be a significant step but there remains deep concern across the Conservative Party about the long term implications. Being seen to tell people, in effect, that they were wrong and they need to vote again risks either another leave vote (thereby solving nothing) or opening a real Pandora’s box should a remain win be seen to further undermine faith in the political process among those that thought the outcome of the first referendum would be binding.

It may not be possible to move forward until all these various options have been explored and tested against parliamentary opinion. Should none of them command a majority, or prove possible to agree with the EU, then Theresa May will have been proved right and MPs will be left with the stark choice between May’s deal and no deal. When the other options have been examined forensically, these two options still appear by far the most likely outcomes.

But will Theresa May survive long enough to be proved right? Potentially yes. She has demonstrated extraordinary resilience so far, though this will likely depend on the scale of the expected defeat in the meaningful vote. The DUP look set to support the government in a formal parliamentary vote of no confidence, thereby protecting from an early election by default. But their approach to the confidence and supply deal with the Conservative Party thereafter could have a significant bearing on the Prime Minister’s future.

May is still vulnerable to another move against her within the Conservative Party, either via the 1922 48 letters process, or by a move against her by sufficient numbers of the Cabinet. Refusal of the DUP to back a May-led government could prove fatal to her. The fact remains though that replacing Theresa May would not, in itself, unlock the Gordian knot that is Brexit.

So what does all this mean for businesses and investors? Firstly, that Brexit uncertainty still has some way to run, at least until the end of the calendar year and possibly into January. But we are now nearing the end of this particular phase of Brexit. The clock is ticking and, unless the votes for a second referendum materialise in Parliament, the UK will still be leaving the EU on 29th March next year. The nature of that departure should be settled one way or another in the coming weeks.

At that point, this exhausted government and parliament will be forced to turn its attention back to domestic matters. Next year will see a spending review and the first Queen’s Speech for over two years. In the absence of an election, these will be overseen by a weakened minority government operating in a Parliament that has reasserted itself. This will present big opportunities for influencing how the country takes itself forward regardless of what happens in the next month.

It is impossible to predict what will happen in the next two weeks, but it is both possible and necessary to prepare for the moment when attention eventually turns back to other matters.

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