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Any other business

Don’t believe the Tory grumbling: HS2 is on the way

Also in Any Other Business: oil prices, the remaking of Icap and the fate of the Filofax

There’s a lot of negativity around HS2, and I sniff a Brexit connection. You might think Leave campaigners whose aim is to boost British self-belief would promote the idea that we have a talent for grands projets such as the Olympic Park and Crossrail, rather than a propensity to deliver half what’s promised at double the cost. But there’s also an overlap between Tory MPs opposed to the northbound high-speed rail link, usually because it bisects their constituencies, and Tory MPs opposed to the government on the EU referendum. So I suspect that’s where the trouble lies.

The spin is that cabinet secretary Sir Jeremy Heywood is reviewing the project ‘as fears grow’ that it will bust its already inflated £55 billion budget. Among cost-paring measures, the line may not reach Manchester — or if it does, won’t stop at Manchester Airport. A station at Sheffield’s Meadowhall shopping centre may also be erased; and sections of expensive tunnel are for the axe.

But my intern mole who fetches coffees for HS2’s bosses in Canary Wharf says most of that is nonsense. Tunnelling can actually be cheaper than ploughing across premium surface property. Manchester Airport’s station is more certain to be built than most, because the airport itself will bear a chunk of the cost. Meadowhall, beside the M1, would not be a mere shopping stop but a major interchange for South Yorkshire’s conurbations. What’s more, initial contracts worth almost £12 billion are now in prospect: love it or hate it, the high-speed loco is leaving the drawing board.

The super-hub

That being so, my advice to sceptics is to train your binoculars on Old Oak Common. This urban wilderness where HS2, Crossrail (now the Elizabeth Line), Underground and Overground meet is the west London ‘super-hub’ that could also become a satellite city, with thousands of new homes, a cultural quarter and a new QPR stadium. The scheme was promoted by mayor Boris Johnson but in March its master architect, Sir Terry Farrell, said it was ‘heading for disaster’ because of lack of co-ordination and haste to complete Crossrail. A true test of British project-management skills will be whether that cock-up can be averted and the site developed to its fullest potential.


An HS2 passenger changing at Old Oak for the Elizabeth Line could be at Heathrow in 11 minutes or Bond Street in less than ten. To me that signals a different opportunity to lop the HS2 bill: why bother tunnelling from Old Oak to the ill-connected terminus that is Euston? And if £5 billion could be saved, why not spend it extending the Elizabeth Line or Crossrail 2 to Stansted airport, which should (in defiance of the Davies Commission) be encouraged to build the second runway for which it has ample scope? Then we’d really make some progress.

Back to normal?

Is oil heading back to normality? At the start of the week, the Brent Crude barrel price was close to $50 for the first time since November, prompted by supply problems in Nigeria and Venezuela. ‘Normal’ might mean a $60–80 range — at which many oil projects around the world (including US shale) become viable again, while energy-efficient industries are not unduly shocked by cost rises. But Goldman Sachs says we’re not going there yet, $50 being the top for this year — the same Goldman that foresaw $200 oil in 2008 and $20 oil last year, neither of which happened. As ever, no one really knows: all we can say is that oversupply by uncoordinated producer nations will keep energy unusually cheap for some time yet.

Spencer’s empire

I wrote recently that the reduction of a company’s name to meaningless letters usually signals trouble. So I’m intrigued to see the money-broking giant Icap (an abbreviation of ‘Intercapital’) rechristening itself ‘Nex’, which invites confusion with the retailer Next but was the winning entry in a competition for which the prize was a case of claret. What it signifies is that Icap founder Michael Spencer has decided to move out of his traditional realm of shouting brokers — whose profits have been squeezed by low rates, subdued interbank activity and currency swings — towards the sexier but uncertain territory of ‘fintech’.

Icap’s ‘voice-broking’ arm has been transferred to rival Tullett Prebon, in which Nex will hold 20 per cent while Nex itself focuses on electronic trading and ‘post-trade services’ such as risk management for derivatives investors; it will also explore ‘blockchain’ technology, which is the money world’s new new thing. Smart move, or sign of an empire past its zenith?

I put that question to a market veteran who reminded me that Spencer set up shop in 1986 with ‘six guys in Finsbury Circus’ and built the world’s biggest money broker, worth £3 billion. In an era of capital destruction in the City, who has matched him? Martin Gilbert’s Aberdeen Asset Management (founded 1983, market cap £3.5 billion, turbulent history) might be comparable, but it’s hard to think of others. ‘Would I be surprised to see Michael make a huge success in fintech?’ says my man. ‘Watch this space.’

Eighties icon

When Spencer and Gilbert started, they were probably equipped with the upwardly mobile 1980s executive’s must-have: the Filofax. Was there ever a consumer product more iconic of its pre-digital era than this loose-leaf ‘personal organiser’? The man who rescued it from obscurity (it was previously popular only with clergymen and army officers) was a publisher called David Collischon, who died last month; having bought the company for £10,000, he floated it for £17 million in 1987. Like so much else, it dived in the 1990s — but perhaps surprisingly, the brand and the product still exist today. And you might get £150 for your vintage ‘Winchester’ Filofax on eBay.


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