Vote of no confidence called by Tory MPs – What happens next?

What times we live in. Our polity appears to be disabled and functioning Government is barely doing any of that.

The decision by 1922 committee chair Sir Graham Brady to call a snap vote of confidence poll in the Prime Minister’s leadership undoubtedly helps Theresa May. MPs have barely 12 hours to grapple with the prospect of removing her as Tory leader – but remember not necessarily immediately as Prime Minister.

Just as Margaret Thatcher was ‘defenestrated’ by her own MPs in 1990, she stayed in office as caretaker until a new leader was elected. In those days it was just Tory MPs who had the vote – now it is also the party membership.

Early indications from my ‘WhatsApp’ reach across the Tory parliamentary party since 7:30am this morning indicate that there is strong likelihood that the Prime Minister will win today’s ballot BUT the real question is how many Tory MPs decide not to back her. Over 100 MPs will create real difficulty.

If the Prime Minister gets the backing of her fellow parliamentarians tonight there is a strong likelihood that the European Research Group (ERG) will detach themselves formally from the Conservative whip. They have been operating as a party within a party for some time and this may now be their ‘Corn Laws’ moment to permanently step outside.

Watch out for the ERG approaching Labour and the SNP overnight to support a vote of No Confidence in the entire government as soon as tomorrow. The ERG would remain happy to see the clock tick out on the Prime Minister’s deal and a no deal Brexit to ensue.

If the PM loses, it looks like there will be a long list of contenders but the ERG have agreed to meet to ensure they have ONE candidate. [Good luck with that I think!]

Until 20:00 tonight Tory MPs will be listening to what their constituency associations have to say. But one thing I can tell you is don’t look at Conservative MPs on Twitter today. I’m reliably informed by one Tory MP already that what they say will not match their actions in a secret ballot!

And all this while the Brexit clock ticks….

Cicero hosts Brexit event with ‘Norway Plus’ chief proponent Nick Boles MP

Cicero was thrilled to welcome Nick Boles MP, chief proponent of the ‘Norway Plus’ alternative Brexit plan, for an exclusive event. The session allowed Mr Boles to introduce his the proposal, which reportedly has the backing of several cabinet ministers.

The ‘Norway Plus’ approach, outlined in full in this article for the Financial Times, would see the UK joining the European Free Trade Association (EFTA) and the EFTA element of the European Economic Area (EEA), maintaining the UK’s customs union and single market access while moving outside the jurisdiction of the European Court of Justice and the EU’s drive to ‘ever closer union’.

Mr Boles described the approach as the “genuinely only” option that will ensure the UK maintains ‘frictionless trade’ with the EU, with no predicted economic hit from the alternative arrangement because it would not require new customs checks.

While there would be opposition to ‘Norway Plus’s continued membership of the single market, and the commitment to free movement of people, he argued that a small majority could be achieved within Parliament for the plan. Its support would depend on all other options, including the Prime Minister’s agreed approach, a plan backed by the Labour party leadership, and a potential second referendum, all having failed first, leaving “one shot” for Norway Plus to be approved.

Mr Boles added that a second referendum would never be backed by Conservative MPs like himself. Any Tory leader would “be out by lunchtime” if they attempted to bring forward a second referendum, which would need to be enacted in an Act of Parliament, meaning it could not be forced by opposition parties uniting. He added that he could not countenance voting for a ‘No deal’ Brexit given the economic damage this would cause, rating the UK’s chances of crashing out without a deal at only 10%.

This event was chaired by Cicero Executive Chairman Iain Anderson. Please do get in touch if you would like to be invited to similar events.

Cicero named Consultancy of the Year at prestigious industry awards

The Cicero Group team is delighted to announce that we have been awarded ‘Consultancy of the Year’ at the 2018 UK Public Relations and Communications Association (PRCA) Public Affairs awards.

The win caps an exceptional year, following the successful acquisition of Westbourne Communications in June 2018 which created the UK’s largest independent public affairs agency. We have seen superb growth across each of our corporate communications, public affairs, digital and market research services, maintaining exceptional levels of client service, and have ambitious growth plans ahead for 2019.

The award is dedicated to our staff and our superb clients, without whom this success would not be possible.

If you would like to find out more about how Cicero can support your organisation, please do get in touch.

Cicero hosts ‘Future of tech’ panel event with Shadow Minister for Industrial Strategy

Cicero was delighted to host a panel event discussing ‘What next for the future of the technology sector’.

The event welcomed Chi Onwurah MP, Shadow Minister for Industrial Strategy, Mivy James, Head of Consulting, National Security, BAE Systems, and India Lucas, Policy Manager, Skills and Diversity, techUK. The panel provided their insights from across politics and industry, analysing issues including the future direction of regulation, skills and diversity within the tech sector.

Crunching the numbers: Can the Brexit deal get through Parliament?

By Chris Hughes and Simon Fitzpatrick

As we wrote earlier today, Theresa May faces a major challenge in seeking to get the Withdrawal Agreement and Declaration on the Future Relationship which she has negotiated with the European Union through Parliament.  Commentators have formed a consensus that the Prime Minister does not have anything like the votes to get her deal through Parliament. However, if political events of recent years have taught us anything, it is that the consensus view is worth interrogating. Here we set out some of the possible scenarios:

The worst-case scenario for the Government: A big rebellion and a united opposition

There are at least 96 Conservative MPs who have publicly indicated that they will vote against the deal, according to Buzzfeed’s Alex Wickham. If we assume also that the 10 DUP MPs vote against it, as they are indicating they will, that would result in a 106-vote rebellion. If we assume also that the opposition parties vote unanimously against, it would deliver a massive defeat of 197 votes.

A smaller rebellion

Let’s consider a less dramatic scenario. Instead of 96 Tories voting against, we imagine that only the most vociferously opposed – the 27 that have publicly declared no confidence in the Prime Minister –vote against the deal. Let’s also assume there are at least five Labour MPs who back the deal. That would see a Government defeat of 47 votes. In that instance just 24 MPs are required to switch sides to see the Government home. If the DUP could somehow be persuaded to come back into the tent, then it could be ‘game on for the Government’ with the option to go around and try a second time.

A path to victory for the Government, with some Opposition support

The balance of probability is tilted against the deal getting through Parliament. But this Government has survived very difficult votes before. The vote is not scheduled to take place for two weeks, and a concerted operation to sell the deal is now underway.

Ministers, Government Whips and advisors are using three arguments to try to win MPs round: first, the public just wants us to get on and deliver Brexit; second, this is the only deal that is on offer and the EU is clear that there is no scope to re-open negotiations; and third (depending on the recipient of the message), if you vote this down, you run the risk of No Deal (for remainers) or No Brexit (for leavers). The PM is also trying to sell the deal directly to the public through speeches, broadcast interviews, radio phone-ins and possibly even a head-to-head debate with Jeremy Corbyn.

Even then it will be tough to reduce the number of Tory MPs against the deal below 30, even with the Whips working all their magic. The effort to grow the number of Labour MPs (or, dare we say it, even SNP ones) prepared to back the deal will be of paramount importance. It does not look promising so far, with the likes of Lisa Nandy and Gareth Snell – considered potential supporters – stating that they will vote against, along with Labour Brexiteers like Kate Hoey and Dennis Skinner. Last night, the Prime Minister’s Chief of Staff Gavin Barwell and Cabinet Office Minister David Lidington briefed Labour MPs to try to persuade them why they should back the deal.

Reports suggest they did not have much success, with one Labour MP telling the pair that if Downing St wanted to persuade them, they should have started talking to them six months ago. That may be so, but the Government doesn’t have six months now – it has two weeks. If they could somehow find a way to up the number of Labour MPs who might back the deal to say 20, win round the DUP and keep the Conservative rebellion to a minimum, there might just be a path to a narrow victory. However, these are all very big ‘ifs’.

The ‘meaningful vote’ process: What to expect in the next two weeks

By Charlotte Adamson, Account Manager

After a tumultuous few weeks in British politics, we are on the verge of a Parliamentary reckoning for Theresa May’s Brexit deal. The Withdrawal Agreement and Political Declaration are scheduled for debate and a vote in December. Here is a guide to what to expect over the coming weeks.

Step 1: Commons vote on procedure

First, the Government must table a Business Motion in the Commons. This will set out the timetable for the debate on the Withdrawal Agreement and Political Declaration (expected to be five days) and will also set out any special procedure for how MPs vote on amendments to the motion.

The way amendments are voted on is a bone of contention. While the motion is a substantive motion and is therefore amendable, usual parliamentary procedure would dictate that MPs vote on any amendments before voting on the motion itself. The Government has argued that an alternative procedure should be used in this case, whereby MPs would be asked to decide on an unamended motion first, giving Parliament a clean ‘yes or no’ vote. Amendments would only be considered in the event Parliament does not pass the motion.

The Government’s rationale for this is to avoid a scenario whereby the motion is not officially rejected but amended to the point where it is legally unclear whether the Government can proceed to ratify the deal. The Government may also feel this increases their chances of getting the deal through: it would require MPs to feel confident voting against the motion first and risk it being rejected altogether if there then proved to be no majority for any amendment.

The Commons Procedure Committee does not agree with the Government’s approach, recommending that the usual parliamentary procedure for voting on amendments applies. The Government will set out what procedure it wants Parliament to follow when it publishes its Business Motion. Ultimately however, it will be up to the House to determine the final procedure: it could amend or reject a Government business motion if there was a majority to do so. If the business motion is rejected altogether, the Government could try again with a different business motion. Otherwise the default procedure will apply.

The Business Motion could be tabled as late as the night before the first day of debate, however this is unlikely in this case. Again, the Procedure Committee have recommended a full day of debate on the Business Motion and for this to take place at least two sitting days before the full debate. This means it could be as early as tomorrow or, more likely, Thursday.

Step 2: Parliamentary debate on Brexit deal

Assuming Parliament passes the Business Motion, the Government plans for five full days of debate on the Withdrawal Agreement and Political Declaration. This will run from Tuesday 4 – Thursday 6 December and commence again on Monday 10 December, concluding Tuesday 11 December.

In addition, under the EU (Withdrawal) Act, the Lords is required to debate the deal but their approval is not legally required for the Government to go ahead and ratify it. They will debate via a ‘motion to take note’, which will not necessarily trigger a vote. However, if amendments are laid these will be voted on. None of the Lords activity will be binding, however Peers may try to conclude their deliberations before the Commons vote in order to inform MPs ahead of their vote.

Step 3: Commons vote on the deal

MPs will then vote on the motion. It’s expected that the main vote will be on a single motion seeking approval of the three documents the Government has now put before the House: a statement that an agreement has been reached, the Withdrawal Agreement itself and the political declaration on the future relationship. According to our latest analysis of the numbers, the challenge in front of Theresa May is very significant with mounting cross-party criticism of the deal. We’ll be writing more later on the numbers, but it is important to bear in mind that a major operation is underway to try and sell this deal. This Government has survived tough votes before and things can change quickly in the current environment.

The deal passes: time to celebrate?

If the deal is approved by the Commons, Theresa May will first breathe a huge sigh of relief. This is the maximum moment of danger for both her and for the Brexit deal she has negotiated, and if she gets past this hurdle the remaining stages will be easier.

However, that is not to say she is over the finish line. The Government must then bring forward the EU (Withdrawal Agreement) Bill, the legislation that will put the Withdrawal Agreement (and thus the transition period) on the UK statute books. While MPs’ maximum moment of influence is during the vote on the motion, some may still look to amend this Bill. Additionally, the Lords are harder to predict and Peers that felt they did not get adequate say on the final deal through their ‘motion to take note’ may use this Bill as their mechanism of influence. Ultimately, May will have to maintain support for her deal throughout this Bill’s passage or risk a last-minute de-railing of Brexit.

The deal doesn’t pass: what next for May? 

If – as currently looks likely – Parliament votes down the deal, under the EU (Withdrawal) Act, Mrs May has 21 days to make a statement on her proposed next steps to Parliament. The Government must then bring forward a neutral motion before the Commons and a motion to take note before the Lords, both within seven sitting days.

There has been some debate over whether the motion in the Commons would be amendable. Under the Standing Orders of the Commons, where a motion is expressed “in neutral terms”, no amendments to it may be tabled. However, the judgement on whether a motion is in fact in neutral terms falls to the Speaker, and parliamentary procedure, including Standing Orders, is designed to be flexible and allow the House to achieve what it wants. The Speaker could ultimately decide to disapply the rule if he is so inclined – and given current Speaker John Bercow’s history of interpreting procedure flexibly and giving backbenchers increased ability to have their say, he may well decide to do so.

Leaving that debate aside, there are a number of ‘next steps’ the Government could propose. The first is to ask Parliament to reconsider their original rejection of the deal – similar to when the US Congress rejected the TARP bank bailout deal in 2008, only to approve a version of it after market chaos ensued. There is nothing in the EU (Withdrawal) Act that would prevent the Government from taking this course of action, however under usual parliamentary procedure Government could not table exactly the same motion twice. Any second motion would have to be re-worded to demonstrate a “substantive difference” compared to what had previously been considered by MPs. Under this scenario, the Government may hope that a change in circumstance will convince MPs to vote differently the second time around.

The second is for the Government to seek to return to the negotiating table with the EU. May could feel this is her only option, particularly if Parliament coalesces around an alternative to her deal. However, this course of action is not entirely in the UK Government’s gift and relies on EU willingness to re-open negotiations. This therefore currently seems unlikely.

A third option is for the Government to seek a second referendum on the final deal. If Parliament rejects the deal but there is no clear majority for what it wants instead, May could conclude the only option is to offer a second referendum as a way through the impasse. Given the current timeframe, it looks extremely unlikely this would take place before March 2019, and so the UK Government would need to ask the EU for an extension of Article 50. This is not guaranteed, although the EU is said to be sympathetic to an extension in these circumstances.

Clearly, there remains a great deal of uncertainty in this process and around how the Government will proceed if their deal is defeated. We should remain prepared for all eventualities.

Cicero Research: ESG Investments Insight Report

It is a bit of a cliché when we say that advisers are typically interested in whatever their clients tend to be interested in. So when you also consider that ESG Investing has historically been more the realm of institutional investors, why did we find a retail adviser study so important to conduct?

Well, the fact is that the whole concept of ESG is increasingly finding its way into the retail investor consciousness. We are seeing more and more coverage in the money pages of the press (and not just the trade press) and there are even TED talks on the subject. And who doesn’t love a good TED talk?

But after a few historical false starts, some caution is warranted. And that is more so the case for ESG, where advisers would need to find a way to incorporate non-financial considerations into client portfolios. With the Regulator keeping a firm eye on the suitability and appropriateness of advice given (from a financial outcome perspective) this is no mean feat.

Even the definition of ESG itself is somewhat fluid – more of a catch-all phrase for a whole range of strategies that take markedly different approaches. Furthermore it has, over the years, morphed from managers trying to deal with bad governance to excluding stocks based on a far wider range of characteristics, or focusing exclusively on one niche aspect.

That ESG is proving far more “sticky” now than it has previously, though, is undeniable – even before we consider the findings within our retail adviser study. Data from the Investment Association (IA) showed ethical funds, another catch-all term, saw AUM grow from £12.4bn to £15.4bn in 2017. Its share of overall assets rose slightly to 1.3% from 1.2%.

This might seem relatively small-fry, but momentum is clearly building, and we would go as far as to suggest that we are close to the point when ESG is about to really break into the mainstream. And, to be blunt, if asset managers did not envisage this future then we would not be witnessing all the runners and riders jostling for position in the way that we are. Barely a week goes by without new fund launches – and both advisers and investors cannot fail to notice.

The findings within this report paint a picture of an adviser base far more engaged and enthused with the concept of ESG investments for retail clients than we perhaps expected beforehand. Conversations are being had, business is being done and ESG is being incorporated in a strategic fashion through the building of bespoke portfolios, and ESG being factored into Central Investment Propositions.

However, the technical and practical challenges that advisers engaging with ESG face are far greater than the well-jumped hurdles in most other areas of financial planning and investment advice. Furthermore, some gaps in understanding clearly still exist.

But it is undoubtedly an exciting time to be in the ESG space, and the providers that can get not only their solutions right, but back that up that with the right support provisions and toolkit, have a real opportunity to pull away from the rest in the retail space.

Click here to enquire about Cicero’s ESG Investments Insight Report

Protection procrastination remains a thorny issue

By Phil Wickenden, Managing Director, Research

At some point circa 2014 I penned a sorry stanza to illustrate the problem of procrastination in the protection market. It included reference to small will-writing bears, estate planning ninjas and rappers with a penchant for relevant life policies.

Terrible as it was, it was my response to my father’s short verse sent to me after the birth of my son, enquiring as to the status of my relevant life policy application (FYI, the status was very much “on my desk”). That such creative lengths can be gone to and still yield no immediate results highlights the challenge facing advisers, for most of whom faux rap battles are not an appropriate means of client contact.

While there have been encouraging signs of engagement since 2015, across most of the more technically demanding protection markets covered in a study we undertook (wealth protection, inheritance tax protection, business assurance and employee cover), only 32 per cent of clients advisers believed should have cover in place did so. Is this enough for those purporting to deliver holistic, joined-up plans?

Perhaps, being far more aware of the business cost of time, many are less keen to engage with procrastination. I can understand the frustration, having been the source of much of it for both my financial adviser and my dad. But is it acceptable? That is up to advisers.

There is no doubt more can be done but the real, and often unpleasant, challenge is getting clients to associate more strongly with a mental image of the future and focus on the specific problems that need to be solved. Advisers need to fundamentally believe that the effort and skill required to facilitate this level of engagement are, quite frankly, worth it – both for them and their clients. In this regard, it is telling only around half of advisers have business protection in place for their own firm. A slightly smaller number have a relevant life policy.

While advisers value providers that demonstrate commitment to the market and to raising the profile of protection, perhaps the job of persuasion starts with the adviser.

Our research shows, subject to the product being economically acceptable and the process to completion being smooth, there is a real opportunity for providers to more proactively engage with advisers, and in turn jointly develop the market through effective disturbance and solution creation.

DUP rebellion highlights four key issues Theresa May needs to clear before Brexit

By Charlotte Adamson, Account Manager

Last night, the Democratic Unionist Party (DUP) failed to back the Government during a number of votes and amendments on the Finance Bill. This is the Bill that puts the Budget into law and makes tax measures agreed in the Budget Resolutions permanent, therefore giving the Government the ability to raise vital revenue, and essentially, to govern.

While the Government avoided defeat on any of these votes (with thanks to the Labour Party for giving a number of MPs permission to ‘miss’ the vote), the DUP’s action throws into question the ‘confidence and supply’ arrangement currently propping up Theresa May’s minority Government. Under the arrangement, the DUP agreed to support the Government on “all motions of confidence… the Budget, finance bills, and money bills”. On a literal reading, it therefore seems as if the DUP has technically broken this by abstaining and voting against the Government last night. Yet the Tories and DUP are arguing the arrangement remains in force because the amendments the DUP abstained on were cost-neutral.  So – for now – the supply and confidence arrangement just about remains in tact and the Government can continue on.

However, last night’s dramatics do serve to demonstrate that while Theresa May has performed well over the last 72 hours, there remain a number of moving parts that could affect her leadership and the final Brexit deal.

1. DUP support. The DUP’s disagreements with Government stem from the negotiated backstop in the Withdrawal Agreement that they deem to be placing an unacceptable regulatory border between Northern Ireland and the rest of the UK. The party’s decision to abstain and vote against the Government last night is a calculated move to highlight a shift in the power dynamic and show that the DUP has ‘options’ for recourse if the Government is deemed to be breaking their side of the bargain with regards to this aspect of its negotiated deal with the EU. These options include voting against the Brexit deal when it comes before Parliament and/or removing its support from the Government more broadly.

In terms of removing support for the Government more broadly, this would present a significant challenge for the Government. The Fixed Term Parliaments Act dictates that confidence votes must be specifically worded to trigger a general election, so if the DUP vote against the Finance Bill after its Third Reading, yet to be announced, and there is a subsequent Government loss, this would not be a confidence vote in itself. However, if the Government cannot get this Bill through Parliament it affects their ability to raise vital revenue, and as such constrains their ability to govern. We would therefore likely see a no confidence vote in the Government shortly afterwards in this scenario. One potential solution for Government here is to delay the final stages of the Finance Bill until after Parliament’s vote on the Brexit deal and therefore take the heat out of this – a tactic this Government has used previously with the controversial Trade and Customs Bills.

In relation to Parliament’s vote on the Brexit deal, the DUP has proved to be hardened negotiators but it is currently unclear how real their threat to withdraw support on this is. A lot could still change between now and Parliament’s vote on the deal. Additionally, Number 10 will be analysing the parliamentary numbers very closely as we approach this, and it is possible that if May can get enough Conservatives to back her deal along with some Labour MPs, she can afford to lose the DUP’s votes – this may already be ‘priced in’.

2. Conservative leadership election. The Prime Minister’s leadership remains in a precarious position. After a call to arms from Jacob Rees-Mogg and Steve Baker for MPs to submit letters of no confidence in order to initiate a leadership challenge, the 48 letter threshold has still not been reached.

This is not to say that the threshold won’t be reached in the coming days but the apparent struggle with which the ERG are scraping letters together does suggest that the Prime Minister may have more support than thought within the ‘silent majority’ of her Party and that the number of Brexiteers willing to oust her to attempt to achieve a better deal is smaller than expected.

3. Irish backstop. A delegation of senior Brexiteers led by Iain Duncan-Smith met with the Prime Minister last night to discuss alternative plans for the Irish backstop. This relates to a clause included in the Withdrawal Agreement that states that the backstop could be replaced by a “subsequent agreement that establishes alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing”.

According to reports, the Prime Minister is now considering returning to the ‘max fac’ solution – a technological solution that would ensure the border remains invisible. If May can develop this technology and achieve agreement from the EU on this as an alternative to the backstop, this could lead to a climbdown among Brexiteers, who will be able to claim they are satisfied May has changed course. This could mean May can get enough votes to get the deal through Parliament.

4. Deal done? EU officials had hoped the final wording of the declaration on the future relationship would be published today, but yesterday Spain demanded guarantees that Gibraltar will not be included in any future trade deal. Additionally, it has been reported this morning that France has raised concern over wording on fishing rights. Both serve as reminders of the domestic politics taking place in EU countries and how this could impact on Brexit negotiations.

EU Chief Negotiator Michel Barnier is reported to have warned against reopening negotiations on the Withdrawal Agreement, as this would open a door for the UK to seek to also renegotiate certain elements.

 

Given the above, May’s future and her prospects for getting the Brexit deal through Parliament remain unclear.

CNBC News Editor Katrina Bishop speaks at Cicero Group event

Cicero’s latest media briefing event welcomed Katrina Bishop, News Editor of CNBC EMEA.

The event discussed the best ways to engage with CNBC, the leading business and financial news network. Ms Bishop discussed the business stories of greatest interest to her audience, the organisations and sectors underserved by the press that she is looking to cover, and the secrets to engaging with broadcast media, before answering questions from our audience of senior communications professionals.

The event was chaired by Joey Jones, Strategic Counsel at Cicero Group.

If you would like to be invited to similar Cicero events, please do get in touch.

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Joey Jones

Strategic Counsel

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