UK strips citizenship from teenager who joined Islamic State in Syria

Staff reporter(wp/reuters):::
Britain stripped a teenager who travelled to join Islamic State of her citizenship on security grounds, triggering a row over the ramifications of leaving a 19-year-old mother with a jihadist fighter’s child to fend for herself in a war zone.

The fate of Shamima Begum, who was found in a detention camp in Syria last week, has illustrated the ethical, legal and security conundrum that governments face when dealing with the families of militants who swore to destroy the West.

With Islamic State depleted and Kurdish-led militia poised to seize the group’s last holdout in eastern Syria, Western capitals are trying to work out what to do with battle-hardened foreign jihadist fighters, and their wives and children.

Begum, who gave birth to a son at the weekend, prompted a public backlash in Britain by appearing unrepentant about seeing severed heads and even claiming the 2017 Manchester suicide attack - that killed 22 people - was justified.

She had pleaded to be repatriated back to her family in London and said that she was not a threat.

But ITV News published a Feb. 19 letter from the interior ministry to her mother that said Home Secretary Sajid Javid had taken the decision to deprive Begum of her British citizenship.

“In light of the circumstances of your daughter, the notice of the Home Secretary’s decision has been served of file today, and the order removing her British citizenship has subsequently been made,” the letter said.

The letter asked Begum’s mother to inform her daughter of the decision and set out the appeal process.

When asked about the decision, a spokesman said Javid’s priority was “the safety and security of Britain and the people who live here”.

Begum was one of three outwardly studious schoolgirls who slipped away from their lives in London’s Bethnal Green area in February 2015 to fly to Turkey and then over the border into the cauldron of the Syrian civil war.

LONDON TO SYRIA

Islamic State propaganda videos enticed her to swap London for Raqqa, a step she still says she does not regret. She fled the self-styled caliphate because she wanted to give birth away from the fighting.

“When I saw my first severed head in a bin it didn’t faze me at all. It was from a captured fighter seized on the battlefield, an enemy of Islam,” she told The Times which first discovered her in the camp in Syria.

She was equally harsh when describing the videos she had seen of the beheaded Western hostages, The Times said.

Begum has named her newborn, Jerah, in accordance with the wishes of her jihadist husband, Yago Riedijk, a Dutch convert from Arnhem. He was tortured on suspicion of spying by Islamic State but later released.

Another son, also called Jerah, died at eight months old. A daughter, Sarayah, also died aged one year and nine months, The Times said.

Her family’s lawyer said he could seek to challenge the British government’s decision to deprive her of citizenship.

“We are considering all legal avenues to challenge this decision,” said lawyer, Tasnime Akunjee.

British law does allow the interior minister to deprive a person of British citizenship when conducive to the public good, though such decisions should not render the person stateless if they were born as British citizens.

Police in Bangladesh said they were checking whether Begum was a Bangladeshi citizen, and Britain’s opposition Labour Party said the government’s decision was wrong.

“If the government is proposing to make Shamima Begum stateless it is not just a breach of international human rights law but is a failure to meet our security obligations to the international community,” Diane Abbott, Labour spokeswoman on home issues.

Ken Clarke, a former Conservative minister, said he was surprised that Javid’s lawyers had given him such advice.

“What you can’t do is leave them in a camp in Syria being even more radicalised... until they disperse themselves through the world and make their way back here,” he said.

“I think the Germans, the French and ourselves have got to work out how to deal with this difficult and, I accept, dangerous problem,” he said.

Lloyds Bank brushes off Brexit fears with £4 billion investor payout

Banking&Finance reporter(wp/reuters):::

Britain’s biggest mortgage lender posted a 24 percent rise in net profits to 4.4 billion pounds, below expectations of 4.6 billion pounds, according to a company-provided average of analyst forecasts.

It pledged to pay a 3.21 pence per share total dividend, up 5 percent, and unveiled a 1.75 billion pound share buyback. That would still leave the bank’s core capital ratio — a key measure of financial strength — at 13.9 percent.

The bank’s bumper payout and confident tone on the economy struck a contrast with rivals Royal Bank of Scotland and HSBC, which in the last week both reported taking provisions against Brexit amid concerns bad loans could rise.

Lloyds shares rose 2.7 percent, outperforming a 1 percent rise in the FTSE 350 banks index.

Britain’s largest domestic bank resisted any suggestion of complacency in its outlook for the economy, saying it recognised uncertainties existed.

Chief Executive António Horta Osório said he was betting on a last minute accord between British Prime Minister Theresa May and the EU on the future trading relationship between Britain and the bloc.

“We are planning for a deal and a smooth Brexit transition that should lead the economy to grow at around the same pace you have now of about 1-1.5 percent,” the Portuguese CEO told reporters.

“Of course other scenarios can play out ... Irrespective of that our business model is the right one and it is true that we face the future with confidence, otherwise we would not be ramping up our investment in this business.”

EXPANSION PLANS

The bank said it had spent 1 billion pounds on digitising its business and bulking up its wealth management operations, as it seeks to expand into the financial planning and retirement market via a joint venture with Schroders.

Lloyds is seen as hugely exposed to any downturn through its billions of pounds of lending to British consumers and businesses.

In recent weeks the Bank of England has warned Britain faces its weakest economic growth in a decade, with a one in four chance of a recession this year.

Despite Lloyds’ bullish tone on the economy, impairments for the year increased by 18 percent to 937 million pounds as the bank integrated the MBNA credit card portfolio it bought from Bank of America in 2017.

Lloyds also set aside a further 200 million pounds to compensate customers missold payment protection insurance, taking its total provision to 750 million pounds in 2018.

Horta-Osorio’s total pay package for the year slipped to 6.3 million pounds from 6.4 million pounds the previous year, but remains significantly higher than his counterparts at RBS and HSBC.

The bank’s shares remain at a similar level to when he took over the reins in January 2011, despite its profits rising steadily each year since, a factor which analysts attributed to investors concerns about Britain’s uncertain outlook.

Graphic: Lloyds shares under CEO Horta-Osorio - tmsnrt.rs/2U0FxvO

“Lloyds is indelibly plugged into the UK economy, and the shadow cast by Brexit means the bank’s shares are left out in the cold. If there’s a positive resolution to the current political uncertainty, we would expect the shares to rally,” said Laith Khalaf, senior analyst at investment platform Hargreaves Lansdown.

Three Conservatives quit party in protest at "disastrous Brexit"

political reporter(wp/reuters):::
Three lawmakers from Britain’s governing Conservatives quit over the government’s “disastrous handling of Brexit” on Wednesday, in a blow to Prime Minister Theresa May’s attempts to unite her party around plans to leave the European Union.

The lawmakers, who support a second EU referendum and have long said May’s Brexit strategy is being led by Conservative eurosceptics, said they would join a new independent group in parliament set up by seven former opposition Labour politicians.

The resignations put May in an even weaker position in parliament, where her Brexit deal was crushed by lawmakers last month when both eurosceptics and EU supporters voted against an agreement they say offers the worst of all worlds.

While the three were almost certain to vote against any deal, the hardening of their positions undermines May’s negotiating position in Brussels, where she heads later to try to secure an opening for further work on revising the agreement.

With only 37 days until Britain leaves the EU, its biggest foreign and trade policy shift in more than 40 years, divisions over Brexit are redrawing the political landscape. The resignations threaten a decades-old two-party system.

“The final straw for us has been this government’s disastrous handling of Brexit,” the three lawmakers, Heidi Allen, Anna Soubry and Sarah Wollaston, said in a letter to May.

Soubry later told a news conference that the Conservative Party had been taken over by right-wing, pro-Brexit lawmakers.

“The truth is, the battle is over and the other side has won. The right-wing, the hard-line anti-EU awkward squad that have destroyed every (Conservative) leader for the last 40 years are now running the ... party from top to toe,” she said.

May said she was saddened by the decision and that Britain’s membership of the EU “has been a source of disagreement both in our party and in our country for a long time”.

“But by ... implementing the decision of the British people we are doing the right thing for our country,” she said, referring to the 2016 referendum in which Britons voted by a margin of 52-48 percent in favour of leaving the EU.

Asked what May would say to others considering resigning, her spokesman said: “She would, as she always has, ask for the support of her colleagues in delivering (Brexit)”.

INDEPENDENT GROUP

The three sat in parliament on Wednesday with a new grouping which broke away from the Labour Party earlier this week over increasing frustration with their leader Jeremy Corbyn’s Brexit strategy and a row over anti-Semitism.

Another former Labour lawmaker joined their ranks late on Tuesday, and several politicians from both the main opposition party and Conservatives said they expected more to follow from both sides of parliament.

What unites most of the group of 11 is a desire to see a second referendum on any deal May comes back with, now that the terms of Brexit are known in detail - something the prime minister has ruled out.

For May’s Brexit plan, the resignations are yet another knock to more than two years of talks to leave the EU, which have been punctuated by defeats in parliament, rows over policy and a confidence vote, which she ultimately won.

Britain’s 2016 EU referendum has split not only British towns and villages but also parliament, with both Conservative and Labour leaders struggling to keep their parties united.

May has faced a difficult balancing act. Eurosceptic members of her party want a clean break with the bloc, pro-EU lawmakers argue for the closest possible ties, while many in the middle are increasing frustrated over the lack of movement.

Those who have resigned have long accused May of leaning too far towards Brexit supporters, sticking to red lines which they, and many in Labour, say have made a comprehensive deal all but impossible to negotiate.

But May will head to Brussels hoping that her team will get the green light to start more technical negotiations on how to satisfy the concerns of mostly Brexit supporters over the so-called Northern Irish backstop arrangement.

The “backstop”, an insurance policy to avoid a hard border between the British province of Northern Ireland and EU member Ireland if London and Brussels fail to agree a deal on future ties, is the main point of contention in talks with Brussels.

British officials are hoping they can secure the kind of legal assurances that the backstop cannot trap Britain in the EU’s sphere to persuade lawmakers to back a revised deal.

But May’s argument she can command a majority in parliament if the EU hands her such assurances is getting weaker. A government defeat last week showed the eurosceptics’ muscle.

One pro-Brexit Conservative lawmaker, Andrew Bridgen, said: “I would find it very difficult to accept a legal document from the same (party) lawyer whose definitive advice four weeks ago was that we could be trapped in the backstop in perpetuity.”

More Labour MPs and some Tories could join new group - Chuka Umunna

Political reporter(wp/bbc):::

More Labour MPs could quit the party unless it listens to their concerns, Jeremy Corbyn has been warned.

Seven MPs have walked out in protest at the Labour leader's handling of anti-Semitism and Brexit.

One of the seven, Chuka Umunna, said "a lot of Labour MPs" could follow suit, together with Tories "demoralised by the UKIPisation of their party".

Deputy Labour leader Tom Watson has warned his party could see more defections if it did not change.

He said Labour had to do more to tackle anti-Semitism and he also urged Mr Corbyn to reshuffle his shadow cabinet to reflect a wider range of MPs.

Mr Corbyn has said in a statement he was "disappointed" by the defections, which represent the biggest split in the Labour Party since the Social Democratic Party was set up 40 years ago.

Shadow Chancellor John McDonnell said the seven should now stand down as MPs and seek re-election against Labour Party candidates.

The seven MPs - Mr Umunna, Luciana Berger, Chris Leslie, Angela Smith, Mike Gapes, Gavin Shuker and Ann Coffey - quit Labour in protest at what they said was a culture of "bullying and bigotry" in the party and frustration over the leadership's reluctance to back another EU referendum.

Mr Umunna said another "big issue for us" was the belief that Mr Corbyn could not be trusted with national security, if he became prime minister.

"Many Labour MPs agree with us on that," he told BBC Radio 4's Today programme.

Mr Umunna said the new Independent Group was not yet a new political party, but he believed it could become one in time.

He urged members of all parties to join them in building an "alternative" to the current two party system, which he said was "fundamentally broken".

The BBC has been told two Conservative MPs are thinking of joining the new Independent Group in Parliament.

Mr Umunna refused to speculate on who they could be but he added: "There are a lot of Labour MPs wrestling with their conscience on this issue but also Conservatives who have become demoralised by the UKIPisation, if you like, of the Conservative Party."

A number of Conservative MPs are at the centre of rumours about joining the new group.

Sarah Wollaston, a supporter of the People's Vote campaign for another EU referendum, along with the seven Labour defectors, has warned about former UKIP members joining local Tory parties and the pro-Brexit European Research Group (ERG) pushing the party to the right.

On Monday evening, she tweeted: "#BLUKIP has been busy taking over the Tory Party alongside the ERG. Soon there will be nothing left at all to appeal to moderate centre ground voters."

Other Conservative MPs unhappy with the party's direction include Anna Soubry, another People's Vote supporter, who has called in the past for a new centre party.

This splintering might, just might - in time - turn into a much bigger redrawing of the landscape.

For now though that is way off. And this is first and foremost about the Labour Party - the seeds of the splinter sown more than three years ago, bearing bitter fruit just when Parliament's biggest decisions over Brexit are about to be made.

Several Labour MPs have said they are considering their future in the party - but more have said they are sticking with it.

Former shadow environment secretary Mary Creagh told Today: "I have [been approached] and I've said no. I think what is important is we now take a long hard look at ourselves as a political party.

"It is clear that Brexit is pushing both parties to the brink, it is clear that anti-Semitism has taken root in our party."

Edinburgh South MP Ian Murray told the BBC he was sticking with Labour but "may change his mind" unless the party responded to concerns about its culture and direction.

Labour MP Jess Phillips, writing in the Daily Telegraph, called on Mr Corbyn to listen to why the MPs had quit and "act on it", warning that reacting with bitterness could cause the party to "burst apart".

However, shadow foreign secretary Emily Thornberry told the Daily Mirror that the resignations were a "distracting and divisive exercise".

Shadow business secretary Rebecca Long-Bailey told BBC Radio 4's Today programme Labour MPs had to "listen to each other".

But she added: "Equally, I think we also have a duty to unify and make sure that we provide a force for change within Britain."

HSBC warns on China, UK slowdowns as 2018 profit disappoints

Banking&Finance reporter(wp/reuters):::
HSBC warned it may have to delay some investments this year as Europe’s biggest bank missed 2018 profit forecasts due to slowing growth in its two home markets of China and Britain.

Its shares fell 3 percent and analysts cut their forecasts as HSBC reported a drop in fourth-quarter revenue amid tumbling stock markets that sapped customer’s confidence in investing.

The results spoke to a wider problem for European banks, which are struggling to return to growth after a decade of post-crisis restructuring due to a worsening global economic outlook.

At the end of his first year in charge, Chief Executive John Flint said HSBC may have to delay investment plans in order to avoid missing a key target known as ‘positive jaws’ - which tracks whether the bank is growing revenues faster than costs - for a second straight year.

“We will be proactive in managing costs and investment to meet the risks to revenue growth where necessary, but we will not take short-term decisions that harm the long-term interests of the business,” Flint said on Tuesday, after HSBC reported a lower-than-expected 16 percent rise in 2018 profit before tax.

In June, Flint had said HSBC would invest $15-$17 billion over three years in areas including technology and China, while keeping profitability and dividend targets little changed.

“The key thing is just to moderate the pace of investments ... not to cancel it or change the shape of the investments,” Flint told Reuters.

The bank said it failed to achieve positive jaws in 2018 due to the weakness of markets in the fourth quarter.

A combination of U.S.-China trade tensions, central banks turning off the money taps and cooling growth in former hot spots wiped 10 percent off MSCI’s 47-country world stocks index last year, its first double-digit loss in any year since the 2008 global financial crisis.

GROWING BUT SLOWLY

Flint’s comments come as an economic slowdown in China challenges HSBC’s strategy of pouring more resources into Asia where it already makes nearly 90 percent of its profits.

China’s economic growth slowed to 6.6 percent in 2018, the weakest in 28 years, weighed down by rising borrowing costs and a clampdown on riskier lending that starved smaller, private companies of capital and stifled investment.

Pressure on the world’s second-largest economy could increase if Beijing and Washington do not reach a deal soon to end their year-long trade dispute, which is taking a growing toll on export-reliant economies from Asia to Europe.

HSBC’s profits in Asia grew by 16 percent to $17.8 billion last year, accounting for 89 percent of group profit.

“Clearly our customers are really more cautious and are more thoughtful around this trade war with the U.S.,” Flint said.

“It’s possible that we’ll see a slightly lower growth rate this year but we are still going to see a growth rate.”

Since taking over from Stuart Gulliver last February, Flint has largely stuck to the same China-focused strategy as his predecessor while attempting to revive HSBC’s ailing U.S. franchise and putting less emphasis on its investment bank.

BREXIT HIT

HSBC set aside $165 million against possible future bad loans in Britain, which it said reflected the increased risks of a potential economic hit from Britain’s departure from the European Union, scheduled for next month.

HSBC joined UK peer Royal Bank of Scotland in warning that uncertainties related to Brexit could also drive businesses under.

“The longer we have the uncertainty the worse it’s going to be for the customers. Customers are absolutely postponing investment decisions ... and that’s been the part of this slowdown that we have seen in the UK,” Flint said.

HSBC reported a profit before tax of $19.9 billion for 2018, versus $17.2 billion the year before, but below an average estimate of $22 billion, according to Refinitiv data based on forecasts from 17 analysts.

The bank said it would pay a full-year dividend of $0.51 per share, roughly in line with analysts’ expectations. HSBC was confident of maintaining the dividend at this level, it said.

The bank’s core capital ratio, a key measure of financial strength, fell to 14 percent at the end of December from 14.5 percent at the end of 2017, mainly due to adverse foreign exchange movements.

Honda to close UK car plant as Brexit looms

Business correspondent(wp/reuters):::
Honda will close its only British car plant in 2021 with the loss of up to 3,500 jobs, a major departure of Japanese investment announced just over a month before the United Kingdom is due to leave the European Union.

The Japanese firm, which builds a tenth of Britain’s 1.5 million cars at its Swindon plant, said the move was not related to Brexit and that it needed to focus its activity in regions where it expects to sell most cars, after struggling in Europe.

But the timing of the announcement, just 38 days before Brexit, comes amid deepening Japanese corporate worries about investing in Britain after it leaves the EU.

“This decision was not informed by Brexit,” said Honda Chief Executive Takahiro Hachigo.

“We had to consider the rise of electrified vehicles, and the different speeds at which electric vehicles will be taken up in North America and Europe.”

Honda, which builds its Civic car in Britain and Turkey, said it would stop making the model in both countries. The announcement comes just over two weeks after fellow Japanese carmaker Nissan reversed its decision to build a new SUV in Britain.

Honda, Britain’s fourth biggest automaker, will cease production at its Swindon plant which made 160,000 cars in southern England in 2018.

It follows decisions by Japanese electronics companies Sony and Panasonic to move their headquarters from Britain into the EU, while Hitachi put a $28 billion (£22 billion) nuclear power project in Britain on hold in January.

‘DEVASTATING DECISION’

Some 1,000 Japanese firms are based in Britain, employing around 140,000 people, and have invested about £60 billion, according to the Japanese embassy in London.

Nissan, Toyota and Honda were encouraged to come to Britain in the 1980s as a pro-business gateway to the EU and have helped turn around a domestic car industry that had been decimated.

The trio currently build half of Britain’s cars and hundreds of thousands of engines at production sites across the country.

“This is a devastating decision for Swindon and the UK,” said business minister Greg Clark.

For Honda, declining demand for diesel vehicles and tougher emissions regulations have also clouded its manufacturing prospects. The company said in October 2017 it would stop making vehicles at its Sayama plant in Japan by 2022 as it grapples with a shrinking domestic market.

Like many of its global rivals, Honda is trying to streamline its operations as it invests heavily to develop electric vehicles and self-driving cars.

The recently agreed EU-Japan trade agreement means tariffs on cars from Japan to the bloc will be eliminated, while Britain is struggling to make progress on talks over post-Brexit trade relations with Tokyo.

Honda said that was not part of the decision-making process but the firm’s boss said it would benefit from the EU-Japan deal.

Britain’s largest trade union Unite said it would continue to consult with the company and fight to keep the site open.

“We will leave no stone unturned to keep this plant going and its workforce in employment,” said national officer for the automotive sector Des Quinn.

“We believe that the uncertainty that the ... government has created by its inept and rigid handling of the Brexit negotiations lurks in the background.”

UK jobs market defies economy's Brexit slowdown

Business correspondent(wp/reuters):::
British workers’ pay growth maintained its fastest pace in a decade in late 2018 and job creation stayed strong, data showed, suggesting the labour market was buoyant ahead of Brexit as the broader economy slowed.

Total earnings, including bonuses, rose by an annual 3.4 percent in the three months to December, matching their fastest pace of growth since mid-2008.

The increase was a touch below a forecast for a pick-up to 3.5 percent in a Reuters poll of economists.

Average weekly earnings excluding bonuses also rose by 3.4 percent on the year, the Office for National Statistics said on Tuesday, in line with the poll forecast.

Britain’s strong labour market has defied a slowdown in the economy since the 2016 referendum vote to leave the European Union.

Tuesday’s figures showed the number of people in work rose by 167,000 in the three months to December, the biggest increase since the first quarter of 2018 and stronger than the poll’s forecast of 140,000.

With Britain due to leave the EU in just over a month’s time, and no clarity yet on whether it will get a deal to smooth the shock, many companies have cut investment in equipment, potentially making them more likely to hire workers.

BREXIT EFFECT AHEAD?

However, Honda’s announcement that it will close a plant with the loss of 3,500 jobs and Nissan’s decision not to build a new model of car in Britain have raised concerns about the outlook for big manufacturers against the backdrop of Brexit and a slowing world economy.

Signs of nervousness among businesses might be yet to appear in the jobs figures, Andrew Wishart, an economist with consultancy Capital Economics, said.

“The (business) surveys deteriorated more markedly in January, so a Brexit effect might start to weaken employment growth in the next batch of official data.”

With unemployment at its lowest rate since 1975 - 4.0 percent in the three months to December - employers have begun raising pay for staff more quickly.

The Chartered Institute of Personnel and Development, a human resources professional body, said on Monday that private-sector employers planned to increase basic pay rates this year by the most since the survey started in 2012.

The Bank of England has said it will need to raise interest rates gradually to offset inflation pressures from rising pay.

This month, it forecast wage growth would slow to 3.0 percent by the end of 2019 before picking up again.

When adjusted for inflation, total earnings in the last three months of 2018 rose by 1.3 percent, the fastest increase since late 2016, the ONS said.

However, the pace of nominal wage rises remains slower than the 4 percent increases of before the financial crisis.

PRODUCTIVITY PROBLEM

Tuesday’s ONS data showed a downside of the continued strong job creation in the form of a latest fall in productivity, the Achilles’ heel of Britain’s economy.

Output per hour fell 0.2 percent in annual terms in the last three months of December. The last time it declined by more was in late 2015, the ONS said.

Weak productivity puts long-term pay growth in jeopardy and risks pushing up inflation.

The ONS data showed a fall in the number of EU workers in the United Kingdom, largely driven by a decline in eastern European workers. But the number of non-EU workers rose, resulting in a total annual increase of 83,000 foreign workers in the country in the last three months of the year.