Along, cold weekend brought a haul of business news more bad than good. The worst was from aero-engine maker Rolls-Royce, which announced a £5.4 billion half-year loss — adverse currency movements plus a collapse in new orders and engine-repair work — and warned that in the ‘plausible downside scenario’ of an extended slump in global aviation, the company might cease to be a ‘going concern’.
That’s a horrendous prospect for what’s left of British engineering. And unlike recent losses on a similar scale at BP, there’s no consolation in terms of long-term repositioning of the business: in short, the fewer jets flying, the grimmer Rolls’s future. As cash runs out, survival will require capital injections bigger than the company’s bombed-out £5 billion market value — possibly from HM Treasury, if ministers don’t want this beacon of British excellence to pass into foreign control.
The alternative will be a merger, for which BAE Systems looks the only feasible UK partner. That would certainly create a ‘national champion’, but one which will have to endure very tough times before it starts winning medals again.
More signs of the way the world is changing. First, Rolls-Royce finance director Stephen Daintith jumped ship to join the online grocer Ocado, whose prospects have soared this year — while Tesco announced 16,000 new jobs to cope with its own surge in online customers. Second, billionaire industrialist Sir Jim Ratcliffe was reported to be buying a former Daimler plant in France as the base for his Grenadier 4x4 vehicle project, previously destined for south Wales. When this successor to the classic Land Rover Defender was unveiled in 2017, the spin was that Ratcliffe wanted to help arrest the decline in UK manufacturing; now that looks an increasingly lost cause, it seems he just wants a ready-made factory inside the EU.
Then there’s the surge in online gambling reported by Flutter Entertainment, the parent of Sky Bet, Betfair and Paddy Power which recently entered the FTSE 100 and — believe it or not — has a market value four times that of Rolls-Royce. We may no longer make things in metal but ‘recreational online poker’ is a growth sector — and you might expect a scolding from me for suckers who waste money on it. Except that I’ve developed an online habit myself: a weekly punt on the National Lottery. I pass whole dog-walks fantasising about how I’ll spend this week’s £139 million jackpot. Lockdown has done strange things to us all.
Waving little flags
How odd of our usually sensible Chancellor to shape his autumn statement by floating a menu of possible measures in the bank holiday media. If the intention was to test which provoked the most hostile response, the answer was all of them — except the one about slashing foreign aid, which most voters would cheer. A rise in fuel duty is a rotten idea if it deters commuters from returning to work; a hike in corporation tax is bad if it squashes UK competitiveness and business investment; ‘soak the rich’ rises in capital gains tax and cuts in pension relief would drive talent away. All this we knew already — but could any Chancellor seriously make no tax raids at all, carry on borrowing without limit, and ‘go for growth’ alone to fill a huge fiscal hole? Prudence and confidence are what the public awaits from Rishi Sunak this season; waving little flags in the Sunday papers just makes him look weak.
Far too slow
In early June I urged Culture Secretary Oliver Dowden to ‘embrace Rishi Sunak’s whatever-it-takes’ and come up with a plan to save the performing arts. A month later he trumpeted a ‘£1.57 billion rescue package’ without specifying a timetable. Grant-giving to theatres and music venues that were already bleeding to death was then delegated to Arts Council England, which eventually promised to announce individual grants between late September and early November. So the last successful applicants will wait four months for news and longer for cash — while those behind them in the queue get nothing at all.
The timing is acute. A nationwide survey of venues published in May found half expecting to run out of cash by the end of October, rising to 70 per cent by the end of the year. Among ‘iconic organisations’ at risk of insolvency were Bristol Old Vic, Manchester Royal Exchange, Sheffield Crucible, Chichester Festival Theatre, Nottingham Playhouse, Sadler’s Wells and the Roundhouse — to which we might add ‘Coming soon to a theatre near you’. Most of Rishi Sunak’s schemes to bolster the wider economy through lockdown were swiftly and efficiently executed, but the arts ‘rescue’ looked like a low-priority afterthought. We’ll see by early next year just how much destruction it has failed to prevent.
Get off your sofa
Meanwhile, some observations from my local Yorkshire arts scene. Chamber music in a marquee with one side open for ventilation: packed. Outdoor Shakespeare in weather like February: another sell-out. Indoor cinema at my small-town arts centre? A dozen tickets sold if we’re lucky, as cinema takings nationally run at just 6 per cent of last year’s figures. We haven’t tried staging Covid-themed monologues by famous actors, but I doubt they’d sell either. A socially distanced, super-sanitised auditorium is surely safer than any busy restaurant, but irrational fear is deterring audiences of all kinds, combined with Netflix to keep them at home. What’s needed is a new version of ‘eat out to help out’. How about ‘get off your sofa, go see a show for…’ 50 per cent up to £10 off every ticket from now until Christmas? Another drop in Rishi Sunak’s spending bucket — but a vital boost to moribund town centres as well as to theatre folk. Why not, minister?