Martin Vander Weyer | The Spectator columnists & writers

Can the ‘next Bicester Village’ take off without tourists?

Retail footfall will be the first measure of recovery this spring. Everywhere I look, from central London to small-town Yorkshire, shopkeepers who survived the winter cull have been dusting their counters, cleaning their windows — and waiting in their doorways for the crowd of customers who have accumulated £150 billion of savings during lockdown and, despite the cornucopia of online offerings, can’t wait to start browsing and shopping for real again. Indications were mixed at the beginning of the week, with numbers still down on pre-pandemic levels, but at least the stock market is buying the theory. The FTSE 350 General Retailers index, which includes the likes of Dixons Carphone, Dunelm, JD Sports, Marks & Spencer and Pets at Home, is up 10 per cent in the last month and 75 per cent from its first lockdown low in March last year.

Was Deliveroo the most embarrassing flop in City history?

The market emphatically endorsed my negative opinion of the Deliveroo share offer, which bombed from its offer price of 390p to close at 282p before Easter. The biggest London IPO since the commodity giant Glencore went public in 2011 now also stands as the most embarrassing flop in living City memory. Goldman Sachs and JP Morgan Cazenove, the deal’s bookrunners, must have known it was in jeopardy when they knocked more than a billion off their first indicative valuation after UK institutional investors lined up to say they wouldn’t touch it. But 70,000 Deliveroo app users, having failed to read that signal, bought into the ‘community offer’ — and have lost an average of £200 each. The whole thing stinks like a left-behind prawn bhuna and it will be scant consolation if the banks involved are denied the £18 million of ‘additional commission’ payable at Deliveroo’s discretion had all gone according to plan.

Why I won’t invest in Deliveroo

‘The reason we have the vaccine success is because of capitalism — because of greed, my friends.’ So Boris Johnson told his backbenchers last week, though he immediately muttered ‘Forget I said that’ while aides tried to explain it as a joke on the chief whip, who was munching a cheese and pickle sandwich at the time. Whatever, the PM’s gaffe makes a neat text for a short Easter sermon. The fact is that ‘capitalism’ — the mustering of vast private-sector resources to bring lab-tested potions to mass production in record time — has indeed delivered a triumph, in combination with university science, a smart Whitehall taskforce, military logistics and NHS networks. And both the capital and the people involved deserve appropriate rewards, because that’s how capitalism has generated progress and prosperity throughout the modern age.

Are we entering a new era of fractured trade?

Just as the auto industry embraces the electric future I wrote about last month, it hits a new crisis: a shortage of the microchips that power everything under the bonnet. As a parable of globalisation’s perils, this one has all the ingredients from trade war to fire, drought and Covid pestilence. When car production slumped last year, chip-makers switched to meet booming demand for parts for smartphones, tablets and laptops. Now car factories are keen to raise output again, but there aren’t enough chips to go round. The leading source, Taiwan, is entangled in US-China tensions and its factories are afflicted by water shortages; other plants have been stricken by fire (in Japan) or extreme cold (Texas). The result is that Ford, Toyota, Volvo and Volkswagen have paused production lines and Nissan’s Sunderland plant has blamed non-delivery of chips for a decision to put 750 workers back on furlough.

Can John Lewis and Waitrose really remain partners?

Historians of unforeseen crises talk about ‘chaos theory’ and the ‘butterfly effect’, in which a small perturbation far away — the flapping of a butterfly’s wings in Australia, as it were — have impacts across much larger connected systems. More usually applied to weather events, the theory had its 2008 moment when the collapse of AIG, a US insurer whose name meant little over here, threatened to cripple so many banks that, without immediate bailouts, our high street ATMs (we were told) might have been switched off there and then. Let’s hope Greensill Capital, a little-known ‘shadow bank’ created by former Queensland sugar farmer Lex Greensill, doesn’t turn out to be a giant mutant butterfly: its collapse certainly has the makings of a huge story.

Are Wall Street’s ‘Spacs’ about to make waves in the City?

This column generally takes a sceptical view of financial novelties and gimmicks. So my antennae have twitched in recent days at frequent mentions of Spacs, or ‘Special Purpose Acquisition Companies’, which are the latest plaything of Wall Street and could be about to go large over here. Also known as a ‘blank cheque’ company, a Spac is a stockmarket-listed cash shell that raises money with a view to merging with a real — usually hi-tech, often relatively early-stage — business seeking a fast route to listed status. Hundreds of Spacs have been created in the US since the craze began last year, many with celebrity names — sports stars, astronauts, rappers — attached to win attention. On the positive side, Spacs have drawn more than $70 billion so far this year towards investment in high-growth companies while offering retail investors the opportunity to back propositions that might previously have been reserved for professional venture capitalists.

The case for keeping business taxes low

Why should business pay tax at all? That’s a provocative but forlorn question to ask in Budget week. Business pays corporation tax on profits because that’s what voters expect, partly because many are conditioned to believe profit is a sin and partly because all would prefer to pay less tax themselves. Investors pay tax on capital gains because — as the American bank robber Willie Sutton said of his crimes — that’s where the money is. And companies pay more tax as business rates on premises because that’s the easiest way to collect contributions towards public services from which they benefit — but it’s also an easy levy to relieve at times, like now, when the private sector needs help. Those are the principles with which the Chancellor was wrestling last weekend, while on one side business lobbyists urged him to rely on a rocket-shaped recovery to rebalance the public finances and on the other, Lords Clarke and Hague declared tax rises, corporate and personal, to be the only righteous path.

The car industry is accelerating towards an electric future

Back in November, when Downing Street’s pandemic responses looked daily more incompetent, the announcement of a ban on sales of new petrol and diesel cars by 2030, ten years earlier than originally planned, was largely greeted — along with the rest of the ‘Ten Point Plan for a Green Industrial Revolution’ — as another exercise in Johnsonian distraction and thin-air number-plucking. Auto makers responded defensively, citing the huge costs of re-engineering model ranges in short order and the shameful failure of ministers to encourage investment in plug-in networks for electric vehicles. Meanwhile, Tesla founder Elon Musk announced he would site a battery ‘gigafactory’ in Germany because Brexit made the UK ‘too risky’.

The City is losing its battle with Brussels and Amsterdam

No sign of progress towards a workable deal with the EU for financial services, on which news is due next month. Bank of England Governor Andrew Bailey warned in unusually frank terms this week that although the UK has granted ‘equivalence’ to the EU in some financial activities, ‘the EU has not so far done likewise to the UK’ and seems unwilling to do so by reference to a ‘common framework of global standards’. Instead, Brussels is seeking to apply to the UK ‘a standard that the EU holds no other country to’, amounting to ‘rule-taking pure and simple’. Given the importance of financial services to the UK economy, that’s a major defeat of the Brexit principle which seems to be passing almost unnoticed. Meanwhile, Amsterdam last month overtook London as Europe’s largest share-trading centre with average daily trades of €9.

Why it’s a good time to invest in a pub

It’s obvious from the body language of Bank of England Governor Andrew Bailey that negative interest rates — much talked about this week — are the last device he ever wants to use. Deployed with mixed success in Europe, this monetary equivalent of Pulp Fiction’s adrenaline jab in the heart is a desperate remedy against deflation, recession and banks’ reluctance to lend. UK banks have been given six months to prepare for the possibility, while Bailey has been talking up the likelihood of rapid recovery as vaccinations advance and Brexit trade disruptions fade. So by the time the banking system is ready, the negative-rate tool should be back in the vault and the Bank’s Monetary Policy Committee — which last week voted unanimously to hold the base rate at 0.

The Reddit rampage is a sign of market turmoil ahead

The Reddit story — in which a ragtag army of small investors have executed a spectacular short squeeze against hedge-fund goliaths — can be interpreted two ways. Some say it’s another populist citadel--storming in the spirit of the moment, but this time an admirable one because its target is ‘Wall Street’, which everyone hates: the so-called ‘stick it to the man’ version. Others see a fever of price-chasing, part-driven by lockdown despair, akin to crypto-mania and the surge in online gambling; in this version, it has nothing to do with serious investment but is a sure signal of more market turmoil ahead. To recap: several million retail investors connected via chat groups such as WallStreetBets on the Reddit social media platform collectively decided to buy stocks that hedge funds, anticipating price falls, had been short-selling.

Business rebirth is always possible – with the right help

The online fashion retailer Boohoo is buying Debenhams without its stores and staff, confirming the demise of the high street. Airlines face quarantine rules that could kill international travel for many months ahead, while the cross--Channel Eurostar rail service cries out for state rescue. The travel and hospitality sectors, alongside what’s left of bricks-and--mortar retail, watch their survival chances evaporating. Amid unremitting economic mayhem, new milestones are easily taken for gravestones. But here’s an optimistic parable from half a century ago. The bankruptcy of Rolls-Royce on 4 February 1971, crippled by a contract to supply newly developed RB211 jet engines for the US-built Lockheed TriStar aircraft, was a traumatic episode that bears comparison with today’s headlines.

My stamp duty solution for the Chancellor

On the Wednesday in early July when Rishi Sunak announced a temporary increase from £125,000 to £500,000 in the stamp duty threshold for house purchases, a record 8.5 million people visited the Rightmove property website and I’m pretty sure I was one of them. I continued visiting it weekly: it became a lockdown obsession, alongside French television thrillers, until last month I finally spotted a London flat I wanted to buy. Now, like thousands of others, I’m pushing to complete before 31 March, when the stamp duty holiday — a £15,000 saving for me but the equivalent of a £3.9 billion annual giveaway for the Treasury — is due to expire. The housing market has run hotter than anyone expected for the past six months and is still ticking along in lockdown, but pundits fear it will go cold again — with price falls of 5 per cent or more — when the stamp duty incentive is taken away.

Sell bitcoin, buy Tesla

Which is madder, bitcoin at $41,500 — oops, make that $31,000 on Monday — or Tesla shares at $880 apiece? Don’t get me started on the crypto-mania in which the Financial Conduct Authority has warned gamblers ‘they should be prepared to lose all their money’. But Tesla, relatively speaking, is a real thing: a California-based carmaker which has expanded the frontiers of the electric vehicle market that’s going to become huge in the next decade and could soon make carbon--fuelled road transport extinct. Put that way, it’s not so surprising — in tech stock terms — that investors should value Tesla higher than the rest of the US auto industry combined. But those investors are not making an objective calculation based on projected profits or dividend flows.

The Brexit deal has left the City to fight for its own future

‘This Article shall not apply with respect to financial services.’ That’s what it says on page 92 of the EU-UK Trade Co-operation Agreement, and my search engine has found nothing else in the monster document offering any comfort to the sector, which contributes £130 billion to the UK economy and provides more than a million jobs. That’s in marked contrast to fishing — £1.4 billion, 24,000 jobs — which gets a compromise settlement (pages 919-925, if you’re keen) accounting for every last haddock, hake and horse mackerel. No great surprise in a Brexit process in which political symbolism trumped economic sense at every turn: but does it mean our bankers have been abandoned, without passports or Portaloos, on some bleak financial equivalent of Manston Airport? If so, why haven’t they raised more protest? Despite reassurances from Rishi Sunak, the City’s position looks substantially weaker than it did before.

My fateful appearance at the Bank of England’s Christmas drinks

Tidings of comfort as the vaccination programme advances, but shortage of joy. That’s my summary of a season in which there’s no Spectator Christmas bash for the first time in my 29 years on the magazine; in which my panto-dame ball gown hangs forlornly as a decoration in the foyer of the theatre where social distancing has made it impossible for us to mount a show; and in which I can’t even offer my customary restaurant tips, because there have been so few opportunities to eat out anywhere and, apart from a brief French escape in July, no chance at all to travel abroad. Nevertheless I count my blessings, the greatest being is that I’m still here writing for you. And I can at least offer a blast of Christmas past that combines elements of all the above: gastronomy, conviviality and slapstick comedy, plus the City name-dropping that is this column’s more conventional forte.

Can Mike Ashley defy high street reality?

Separating heroes from villains in the great retail survival struggle is like spotting bent coppers in Line of Duty — whose sixth series, I’m pleased to report, has just finished filming. The plot just keeps twisting. Sir Philip Green, as I said last week, is seen as an irredeemable baddie; and most commentators (though not usually me) put sportswear tycoon Mike Ashley in a similar category, as an opportunist with a track record as a harsh employer. But now here he is, trying through his company Frasers Group to launch a last-ditch rescue for Debenhams, despite having lost £150 million last year in previous pursuit of the department store chain. He can’t save all 124 shops and 12,000 jobs — but even saving half or a third of them would be remarkable.

Philip Green will be remembered as a nasty stain on capitalism

There really isn’t much left to be said about Sir Philip Green as his Arcadia fashion empire collapses into administration, taking the Debenhams chain down with it, unless a new rescuer steps in. An aggressive rag-trade wheeler-dealer since he started selling cheap jeans in the 1970s, Green was also once regarded as a brilliant merchandiser — until, it seems, he got too rich to bother keeping up with online competitors such as Asos, rising brands such as Zara and price-slashers such as Primark. So he won’t be remembered for his fashion sense — as the era’s other trouble-prone ‘King of the High Street’, George Davies of Next and Per Una, might be. Nor will Green ever be given much credit for grudgingly agreeing to pay £363 million to bolster the bombed-out pension fund of BHS, two years after he tried to relieve himself of that potential burden by selling the store group for £1 to the former bankrupt (now convicted tax evader) Dominic Chappell.

Beacons of light in the darkest of years

The Co-op Bank isn’t worthy of its name

We’ve heard a lot this week about infrastructure spending, and how much more will be needed if the UK is to achieve the ‘Green Industrial Revolution’ that the Prime Minister seems to have sketched on the back of a pizza box. We’ve also heard that the Chancellor is looking at ways to squeeze billions for Treasury coffers out of the private pension sector. What we haven’t heard so far is a plan to join those two pieces of the economic jigsaw — by encouraging pension managers to become committed investors in infrastructure projects. There are signs of a small shift in that direction among local authority pension funds, but at a recent World Pensions Council event, one speaker described overall long-term investment of this kind by UK institutions as ‘minuscule’.

If taxes must rise, Sunak should pick on private equity instead

It’s not axiomatic that taxes must rise to pay for the pandemic, if you seriously believe the surge in growth, jobs and prosperity that will follow the rollout of a hyper-efficient national vaccination programme will generate sufficient revenues for Rishi Sunak to stabilise the public finances, albeit at the highest level of debt ever seen in modern times. On the other hand, the Chancellor is surely pondering this question: in the current mood of public gratitude for the NHS and government support for the economy, there must be taxes I can tweak that won’t lose sackloads of Tory votes and might chip the peak off the debt mountain — so where are they? We can probably dismiss, for example, the shift to ‘pay per mile’ road pricing for motorists reportedly being mooted by the Treasury to replace the £40 billion a year it might lose if sales of new petrol and diesel cars are banned by 2030.

China’s rockstar-of-tech has fallen foul of Xi

FTSE indices soared as the Biden Bounce met vaccine euphoria, underpinned by the Bank of England’s announcement of another £150 billion injection of quantitative easing. It was heartening to see shares in airlines, hotels and Rolls-Royce, the aero engine maker, perking up — and hardly surprising to see lockdown winners such as Ocado and Just Eat among the fallers. Across the Atlantic, even mighty Amazon shed 5 per cent on Monday. But stock markets are one thing and real life is another. What matters in the short term is whether Boris Johnson can get us out of the lockdown he clearly didn’t want before the tide of redundancies, heading towards 150,000 a month, crushes the prospects for a consumer-led recovery, even after vaccine distribution has begun.

Ruthless Ryanair could show us the future of aviation

Aviation, nuclear power and public transport — along with good restaurants, golden retrievers and hand-knitted bed socks — are, as Julie Andrews put it, a few of my favourite things. So in a week when the news is as depressing as I can remember since the dark winter of 1973-4, I might as well write about all of them. I’ll try to find points of light along the way but it’s not going to be easy. First the plight of airlines, now so extreme that it’s hard to foresee any outcome other than nationalisation for many major carriers. Even if the new ban on leisure travel ends, only pre-flight Covid testing and reduced quarantine can boost passenger numbers in the short term, while transatlantic routes will take years to recover.

What’s the point of trying to break up ‘big tech’?

The ‘antitrust’ law suit launched by US authorities against Google has been reported as a potential turning point in the dominance of ‘big tech’ — and an echo of the courtroom dramas that diminished the excessive power of America’s late 19th--century oil, steel and railroad barons. But I wonder how much impact it will really have. The allegation, in brief, is that Google has created an illegal near-monopoly by paying large sums to Apple and other smartphone makers to secure its position as the default search engine for billions of consumers, its grip reinforced by ownership of Android, the phone operating system, and Chrome, the popular browser — all of which also gives it a stranglehold on the digital advertising market.

Who’d want the job of vaccinating the nation?

Is that a light at the end of the tunnel — or a second lockdown thundering unstoppably towards us? News of a viable vaccine is the one development in the Covid drama that could drag the national mood out of the current despair that’s pulverising economic recovery; it would also provoke a euphoric stock market rally. And it’s clearly getting closer. But how close? The chance of a magic potion for Christmas remains ‘slim’, according to Vaccine Taskforce chair Kate Bingham; spring next year is a safer bet, says chief scientific adviser Sir Patrick Vallance, adding that ‘we should not overpromise’. He’s right there: the worst thing ministers could do — worse than any Covid cock-up so far — would be to create expectations of swift vaccination for the old, the vulnerable, and frontline workers, then fail to deliver.

Impossible to choose…

For The Spectator’s 2020 Economic Innovator of the Year Awards, sponsored by Julius Baer, we have introduced a new award for Social Impact to reflect the fact that today’s entrepreneurs, especially younger ones, tend to believe that business should aspire beyond profit (even though they recognise that profit is essential for any business to survive, grow and reward its investors) towards trying to make the world a better place. On that basis, it was no surprise that the vast majority of our almost-150 entrants this year ticked the box that indicated they’d like to be considered in this category, as well as on their merits as innovators and business-builders. But in doing so, they interpreted the phrase ‘social impact’ very widely — and of course the first thing our judges are likely to be asked, and indeed need to ask themselves, is: ‘What does it actually mean?’ Well, here’s our interpretation: ‘All the entries we have selected as finalists in the Social Impact category are entrepreneur-led for-profit businesses, not social enterprises or charities.

Why now is the perfect time to invest in art

The Bank of England has told commercial banks to prepare for the possibility of negative interest rates. This last hypothetical spanner in the toolbox of monetary stimulus — since rates are stuck close to zero anyway and quantitative easing through bond-buying programmes has diminishing effects — sounds weird and worrying but has already been in use in Europe for some time. Its intended effect is to push the commercial banks to lend more to business by penalising them for depositing cash with central banks. But what on earth does it mean for personal savers? The fact is that all monetary policy since 2008 has been designed to stimulate moribund economies and keep companies alive on a broad front — with collateral impacts on individuals.

Solving 21st Century problems

What a pleasure to be reunited (via Zoom, needless to say) with our genial judging panel for Scotland and Northern Ireland in The Spectator’s Economic Innovator of the Year Awards, sponsored by Julius Baer. Irene McAleese is co-founder and chief strategy officer of See.Sense, the Northern Ireland-based ‘smart bike lights’ and road-use data analysis venture that was our regional winner in 2018. Ian Ritchie CBE is a leading figure in Scottish tech circles, having been involved as an investor or director in more than 40 start-up businesses. Three finalists pitched to us, all with admirable clarity and passion – and all in different ways, solvers of 21st Century problems. One Year No Beer is an example of entrepreneurship with social purpose upfront.

The Blackburn brothers who are bringing Asda home

What a triumph of entrepreneurial empire-building — if that’s still an acceptable phrase — is the £6.8 billion acquisition of the Asda supermarket chain by Blackburn-born self-made billionaires Mohsin and Zuber Issa. Sons of Gujarati immigrants, these brothers have advanced from a single petrol station in Bury to a chain of almost 6,000 in ten countries with convenience stores and coffee shops attached. Now their company EG Group has brought Asda back into British ownership after two decades as part of Walmart, the big-box monster of American shopping. The pair’s success has been built on boosting the profitability of fuel retailing, in an era when big oil companies were pulling out of that market, by adding more consumer choices, including the (to me rather forlorn) concept of the UK’s first drive-through Starbucks outlets.