Martin Vander Weyer | The Spectator columnists & writers

Prince Harry is surfing an investment wave

Does the economist David Blanchflower — who I described as the Bank of England’s ‘resident wacko’ during his 2006-09 tenure on the Monetary Policy Committee and who later served as an adviser to Jeremy Corbyn — have a former pupil on the editorial team of the Today programme? I can’t think why else he should have been afforded a soft six-minute interview with Mishal Husain (addressing him by his nickname ‘Danny’) in Monday’s prime slot between Thought for the Day and the eight o’clock news. British-born, US-based Blanchflower is best remembered for declaring in 2009 that if the then shadow chancellor Osborne’s proposed spending cuts were ever enacted, ‘five million unemployed or more is not inconceivable’. Off-piste predictions were his stock in trade in those days; this week he popped up to plug a theory that — while he sees inflation as a temporary distraction — the US economy could be heading for recession, into which the UK will inevitably follow.

Why we should all start hoarding cash and loo rolls

If there’s anyone in Britain who knows how to keep grocery shelves stacked, it’s former Tesco chief executive Sir Dave Lewis, who has been named as Downing Street’s ‘supply chain tsar’. Application of Tesco’s mastery of logistics and fierce discipline on suppliers should keep delivery trucks moving, so long as they have drivers. But even Lewis won’t be able to avert the pre-Christmas surge of panic-buying which I’m told Cabinet Office planners fear — especially if it’s combined with a major outage in the banking system. Last week’s Facebook crash was a warning that blank screens are only a couple of burned-out circuits or a cyberhacker’s half-hour away. And if we’re looking for vulnerabilities, consider the contactless card transactions that now account for more than a quarter of all UK payments and for which the limit goes up this week from £45 to £100: what happens if the systems behind the card terminals go down, shortly followed by ATM networks overwhelmed by demand for cash? It may be comforting to know that the Bank of England (working with the Treasury and the National Cyber Security Centre, among other bodies) has recently updated its ‘operation resilience’ guidelines for just such an eventuality.

Why stamp duty doesn’t add up

‘Blame it all on business’ was the Tory strategists’ answer to petrol queues and the risk of a no-turkey Christmas that threatened to distract the party-conference faithful from adulation of the Prime Minister. As spin, it might have been shocking if it wasn’t so familiar. But as an explanation of the supply crisis, the idea that business has been deaf to years of warnings that it could no longer rely on immigrant labour is hogwash, rivalled only by the proposition that spiralling wages will lead us to a fairer society — rather than contributing to a bout of uncontrolled inflation in which higher pay actually buys fewer goods because all prices are rising. The answer to all this lies in one word, productivity, in which the UK’s record is lamentably weak.

Why scrapping business rates is a bright idea

A worthwhile policy proposal amid the Labour conference dogfight? Now there’s a surprise. But shadow chancellor Rachel Reeves’s scheme to freeze and eventually scrap business rates, in the meantime boosting high-street survival by raising the threshold for small business rate relief and incentivising re-use of empty premises, was the brightest moment of the Brighton event. No matter that Reeves is likely to hold her post only as long as Sir Keir Starmer holds his and that anything promised today will resemble a Dead Sea scroll by the time Labour ever returns to power. No matter also that her idea of balancing relief for bricks-and-mortar businesses with higher taxes on digital giants is sure to be defeated both by the giants’ lobbying power and by moves towards global corporate tax harmonisation.

Is government preparing to shake the magic money tree again?

Will my bath water still be hot by Christmas? That’s not a question I’d normally feel a need to share with you, but shortly after this morning’s ablutions I read that Bulb Energy — the UK’s sixth-biggest energy supplier with 1.7 million customers, including me — ‘is seeking a bailout to stay afloat amid surging wholesale gas prices’. The spike in the global gas-price graph is extraordinary, up 250 per cent since the start of 2021 and steeper in August. It has many causes beyond our shores, including depletion of stocks last winter, restricted supplies from Russia, hurricane-hit US refineries and increased Asian demand post-Covid. But as this column has long argued, decades of policy dither by successive governments has left the UK peculiarly vulnerable in terms of energy security, and suddenly we see what that means in reality.

The government should be helping, not hindering, start-ups

I’m hugely enjoying meeting the finalists for The Spectator’s Economic Innovator of the Year Awards. This year’s bumper entry was strong on paths to decarbonisation — as you’d expect for the new era of climate action — and on ventures rocket-boosted by the pandemic, whether designed to take pressure off the NHS or in the ‘edutech’ field of online learning. By contrast, ‘fintech’ and consumer apps were less prominent than in earlier years, reflecting changed priorities. And come to think of it, common to all the entrants I’ve talked to so far is that not one has said: ‘We couldn’t have done it without the help we’ve had from government.’ I’m prompted to this observation by two news items on adjacent pages of Tuesday’s Financial Times.

What tea with the WI taught me about responsible investment

Late-breaking exam results: many of the City’s top fund managers have failed a vital test of ‘stewardship’ — defined for this purpose as ‘the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society’. That mouthful comes from the Financial Reporting Council’s UK Stewardship Code; asset management firms seeking to become ‘signatories’ to the code were asked to submit essays describing their own investment principles, highlighting their approach to hot-button ‘ESG’ (environmental, social and governance) issues. Out of 189 applicants, 64 failed to reach the pass mark, while some major firms chose not to apply at all.

How to solve the looming pigs-in-blankets crisis

This is getting serious. Never mind global shortages of microchips, plastics, copper and container ships; now we’re running out of pigs in blankets. The British Meat Processing Association says its members are so understaffed that annual production of 40 million packs of this popular pork item for the Christmas market is under threat. The British public have so far stoically accepted occasional empty supermarket shelves as a pandemic knock-on, to be blamed in part on necessary pinging of key workers and delivery drivers and in part on neighbours’ stockpiling, rather than on systemic government cock-up. But if the succulent sausage-in-bacon delicacy is nowhere to be found, trouble will surely follow. I jest in the interest of asking a proper question: why won’t ministers listen to the Road Haulage Association, the National Farmers’ Union and the Food and Drink Federation when they ask for a short-term visa system that would allow EU and other foreign workers back into the UK to fill the skilled vacancies that are disrupting their sectors and holding back wider recovery? Business Secretary Kwasi Kwarteng bats the idea away, urging employers instead to take on some of the two million Britons who are still in the furlough scheme that ends this month and are likely to need new opportunities.

Rishi’s stamp duty gimmick did little but help greedy builders

The Hundred — some sort of pimped-up cricket tournament, I gather — passed me by entirely, but I’ve been admiring the spin bowling of the Clayton, Dubilier & Rice team in another big contest, namely the bid battle for Morrisons. When CD&R made its initial 230p per share offer in June, there was much talk of the ruthless financial wizardry this New York private equity firm might apply to the supermarket group to extract maximum profit within a short timescale. But there was no more than a passing mention of the role as CD&R’s adviser of the former Tesco chief executive Sir Terry Leahy. Now the offer has been raised to 285p — capping another US bidder, Fortress — while the script has been rewritten to present CD&R’s approach as a personal mission on Leahy’s part to protect the legacy of his hero, the late Sir Ken Morrison, who built the eponymous family business into a nationwide chain.

Head back to the office – it’s your patriotic duty

Give or take a few leader-writing shifts and editing projects, I’ve been working from home for the past 30 years, so it may seem hypocritical to tell anyone else to return to the office. But it’s time to bring normality back to the world of work. I believe few people are capable of higher productivity in isolation than they are amid the shared energy and competitive pressure of a physical congregation of colleagues. Employers should not be allowed to use WFH as cover for cutting office space and certainly not for cutting wages. So on this issue I’m unusually but firmly at one with Goldman Sachs boss David Solomon, who said earlier this year that remote working is ‘not a new normal, it’s an aberration’. And restoring normality also means — yes, kids, I’m talking to you — that if you’ve been taking it easy for the summer, it’s now your patriotic duty to get a job as well as a jab.

Why I swapped my country pile for a tiny London pad

The Edition

America abandoned this fight before the Afghans did

39 min listen

The Edition

America abandoned this fight before the Afghans did

39 min listen

Why filling Father Christmas’s sack will cost more this year

Bank of England governor Andrew Bailey looks increasingly uncomfortable as inflation notches upwards from ‘nothing to worry about’ towards the Bank’s latest prediction of a decade-high 4 per cent peak later this year and a possible ‘Oops, we’re back to the 1970s’ if spiralling wage and price pressures confound the forecasters. I wrote last week about the UK’s lack of lorry drivers, but that’s just one of many bottlenecks that need unblocking, as Bailey says, to bring ‘a wave of supply back on to the market’ and quell the blip. More significant globally, and much more difficult to resolve, is the logjam of shipping. The composite World Container Index published by the maritime research firm Drewry stood this week at $9,371 per 40ft container, which is 370 per cent higher than in the same week last year, having risen steeply since the grounding of the giant carrier Ever Given in the Suez Canal in March.

Is it time for a Dad’s Army of lorry drivers?

Here’s a patriotic proposal: let’s form a Dad’s Army of lorry drivers, of which the Road Haulage Association reckons there’s currently a 100,000 shortage. Daily headlines tell us this is causing supply disruptions that have led to reduced factory output and half-empty supermarket shelves, slowing recovery and contributing to the blip in inflation. We need Walmington-on-Sea’s trusty platoon at the wheel to compensate for the million-plus exodus of foreign-born workers that has afflicted the economy from hospitality (see this week’s last item) to fruit farms, slaughterhouses and construction sites — compounded in haulage by delays to thousands of HGV tests for new applicants last year. Right now, of course, all such problems are exacerbated by pingdemic chaos.

Is the airline ‘booking surge’ a load of hot air?

Be glad you’re not in Dr Mike Lynch’s shoes. A London judge has ruled that the founder of the Cambridge-based software venture Autonomy can be extradited to the US to face multiple fraud charges in relation to the takeover of Autonomy in 2011 by Hewlett-Packard of California. This was, undoubtedly, a disastrous purchase: HP paid a huge premium over Autonomy’s market value, swiftly found all was not as expected, wrote off most of the $11 billion price and accused Lynch of having artificially inflated the company’s numbers. His fate now hangs in the legal balance. The Serious Fraud Office looked at the file but dropped it on grounds of insufficient evidence; meanwhile, judgment in a £3.8 billion civil action against Lynch is not due until September.

The clever radical who led the City’s transformation

It’s a vivid example of unintended consequences that the swimming-pool builders of southern England should owe so much to Sir Nicholas Goodison, the former chairman of the London Stock Exchange who has died aged 87 and whose obituaries suggested little inclination to frivolity, poolside or otherwise. Head-and-shoulders the most cerebral of the Exchange’s leading members at the turn of the 1980s, he was also one of its most far-sighted and probably, as a noted connoisseur of 18th-century clocks, its most cultured. A traditionalist majority of his peers were content with the City’s clubbable old ways. But Goodison — a third-generation stockbroker who had originally thought of a career in teaching — argued for the competitive virtues of abolishing fixed commissions, integrating broking and jobbing which had always been kept apart, and raising the potential of London to challenge Wall Street by allowing combined firms to be owned by deep-pocketed banks.

Could hydrogen power turn air travel green?

Have you been scanning airline websites for exotic destinations to which your double-jabbed status might allow you to slip away in August? I certainly have, but I’ve ruled out the parts of Canada and the United States that are stricken by record-breaking heatwaves and forest fires — and I’m wondering what impact such extreme climate events will have on the aviation industry as it struggles back to life after the pandemic. Having survived a year of near-total shutdown, I suspect it will now face an onslaught of green rhetoric to which governments — positioning for November’s COP26 climate conference in Glasgow — will be forced to respond. A recent Financial Times headline, ‘Brussels targets aviation fuel tax in drive to cut carbon emissions’, was one indicator.

Will a John Lewis home be up Boris and Carrie’s street?

The Financial Times carried a curious story at the weekend about ‘the secretive process to elect the Lord Mayor of London’ being ‘thrown into disarray’ by ‘objections from some City leaders’ to the candidacy, for 2022, of Nick Lyons — who has just been elected as one of the City’s two sheriffs but who happens to be an Irish citizen. Lyons’s unnamed opposers say City rules have always required the Lord Mayor to be a British citizen. The City Corporation, the Square Mile’s local authority, says it has legal advice to the effect that Lyons is not disqualified, EU citizens being permitted to stand in UK local elections. The FT omitted to mention Vincent Keaveny, the senior alderman who is expected to succeed as Lord Mayor this autumn and who describes himself as ‘a proud Irishman’ with dual citizenship.

The Nicola Sturgeon effect on house prices

Nicola Sturgeon depresses me and seems to be having the same effect on Scottish house prices. In a housing market described by departing Bank of England economist Andy Haldane as ‘on fire’, the flames have been rising higher the further away from London — but more or less extinguishing themselves at Hadrian’s Wall. Why buyers are scarcer in Nicola’s domain is a question I’ll leave to our political writers, but the broader picture of soaring home prices across the rest of the UK is an unforeseen pandemic effect that may have painful consequences. Nationwide’s June data shows an annual price-rise bar chart increasing steadily from 7.3 per cent in London through the English provinces to 13 per cent in Yorkshire and Humberside and even higher in Wales and Northern Ireland.

Why private equity sharks are shopping at Morrisons

The late Sir Ken Morrison — founder of the eponymous supermarket chain that’s the latest UK target for US private equity — had the blunt manner of the Yorkshire cattle farmer he became in reluctant retirement after he was ousted by his own board. Criticising his successors from the floor at one of his last AGM attendances, he roared: ‘I have 1,000 bullocks… but you’ve got a lot more bullshit than me.’ So I’m sorry he’s not around to accost the suits from the New York firm of Clayton, Dubilier & Rice (and their adviser, former Tesco chief Sir Terry Leahy) on the intentions behind the takeover bid that sent Morrisons’ shares soaring on Monday. This is the hottest event so far in the surge of foreign money chasing cheap UK assets that I described last week.

Foreign opportunists are turning Britain into a corporate car-boot sale

The snatching of a 12 per cent stake in BT by French entrepreneur Patrick Drahi, last seen here when he bagged Sotheby’s for $3.7 billion two years ago, could be a good thing if it injects dynamism into the telecoms giant’s late-running plans to install high-speed broadband across the UK. But it’s also part of a wave of fast--moving foreign money hunting undervalued UK assets — which is positive if it fuels capital investment for growth, negative if it makes nothing but fast bucks for private investors. The logic is simple. The private equity fraternity is laden with cash and global in outlook; what it sees in London is an appetising menu of companies trading on average earnings multiples of around 14 times, compared with roughly 23 times in the US.

Suddenly used cars are hot property

Companies should willingly pay tax wherever they generate profits — this column has long argued — because it’s fair they should contribute to the cost of the public services on which all business ultimately relies, and because the reputation of capitalism as a whole is tainted when corporate tax bills are reduced to absurdly low levels by the use of offshore domiciles and spurious royalty payments that most governments lack the willpower to challenge. So I welcome at least one half of the G7 finance ministers’ agreement last weekend on a new global corporate tax regime. The half I’m ready to praise is the proposal that all countries should have the right to tax some of the locally generated profits of the world’s largest multinationals.

Will the new breed of retail investors cash in – or crash out?

‘Feed the ducks when they’re quacking’ sounds like advice from a foie gras farmer — but let’s leave gastronomy till last and focus first on stock market activity. The saying actually comes from Wall Street and means that if investor demand is strong, it’s best satisfied with ample supplies of new stock. What’s wrong with that? Nothing, if the investors understand risk and the offerings are sound. But is that what’s happening in the current retail investment craze on both sides of the Atlantic? Probably not. From its low in March last year, the FTSE 100 index has risen 40 per cent. A hectic London market in new issues since the autumn has offered novelties ranging from the Dr Martens boot brand to Darktrace in cybersecurity, with most debutants outperforming the wider market and only Deliveroo an outright flop.

Who cares who runs the railways? We just want them to run on time

The long-awaited review of the railways by former British Airways executive Keith Williams chugged past the platform of public debate without creating much stir. Politicos noted that it had become ‘the Williams-Shapps Plan’, indicating an urge on the part of Transport Secretary Grant Shapps, in Tony Blair’s words, to be personally associated with eye-catching initiatives — in this case, especially those that have nothing to do with the issue of whether British holidaymakers will be allowed to fly abroad this summer. But the review’s core proposal — a new public body called Great British Railways that will control tracks, timetables and fares, and contract with private operators to run trains — provoked little controversy.

Is Farrow & Ball’s business model flaking?

The happiest thing that happens in May is the coming into leaf of my long beech hedge. The shift from brown to green symbolises, for me, an annual economic revival — of openings, reopenings and entrepreneurial optimism. This year, after April’s frosts on the end of a dismal winter, it was especially welcome. And as revival collides with new fears of ‘the Indian variant’, I’m clinging to optimism while watching for new-season winners and losers. In that spirit, I’ll make this column a collage of consumer themes. First — though I’m not sure what this symbolises — a friend tells me he celebrated relative freedom by driving to Bicester Village to buy ten pairs of Y-fronts. Chacun à son goût: I’m reminded that I used occasionally to dive into the Debenhams menswear basement in Oxford Street in search of Calvin Kleins.

The pandemic’s transatlantic divide in executive salaries

‘Consider a temporary cut in executive salaries’ was the Confederation of British Industry’s advice to members at the start of the pandemic. Back then I was gripped by fears of a backlash against capitalism: top pay cuts would indeed be wise, I wrote, not least because ‘sacrifice now is sensible insurance’. Looking at last week’s election results, I needn’t have been concerned about a second coming of socialism. But I’m one of many advocates for responsible capitalism who have long worried about growing disparities between executive and average pay — the key multiple having risen from 50 to 120 over the past two decades — that rarely reflect underlying performance. The pandemic offered an opportunity for rational restraint in the guise of social solidarity.

Can Melinda still keep Bill Gates in check?

‘We are seeing very substantial inflation,’ the great investor Warren Buffett told shareholders in his master company Berkshire Hathaway at their online annual meeting last weekend. He was talking chiefly about the housebuilding businesses in his port-folio, hit by rising material costs in what he called a ‘red hot’ economic recovery. But his remarks align him on a broader front with jittery bond investors and big-name economists, such as Larry Summers of Harvard, who have fuelled the US ‘inflation scare’. And if it’s coming over there — pessimists whisper — surely it’s coming over here? Maybe, but let’s keep this in perspective. Headline US inflation is 2.3 per cent but Fed chairman Jerome Powell says he expects it to settle back to 2 per cent, a level most central banks regard as healthier than no inflation at all.

Who’s really to blame for the Post Office scandal?

The alleged frauds for which the Post Office prosecuted no fewer than 736 of its sub-postmasters has turned out in almost all cases to be the result of faults in a computer system called Horizon which Post Office managers and the system’s supplier, Fujitsu of Japan, were reluctant to acknowledge. That’s the short summary of a miscarriage of justice which also looks like a case of mismanagement to the point of delusion: how could anyone believe a copy-cat crime wave on this scale was sweeping through a cohort of small businesspeople generally seen as the most upstanding of local citizens? And if that wasn’t the belief, the only other explanation is worse: cynical concealment of a 15-year IT cock-up for which no one was willing to carry the can.

Crypto is a virtual Vegas whose towers must fall

What should we make of the valuation of Coinbase, the cryptocurrency exchange listed on Nasdaq last week at $80 billion — three times the market value of Nasdaq itself? Coinbase’s stratospheric debut is clearly a reflection of the mania for bitcoin, currently trading at five times its price of six months ago. And that spike has in turn generated short-term profits for Coinbase, making it an attractive rarity among tech flotations that more often come to market long before they reach profit, which some never do. But is there a deeper message? Some say this is crypto’s coming of age, coinciding as it does with Rishi Sunak’s announcement of a Treasury-Bank of England taskforce to explore potential for a ‘central bank digital currency’ harnessing crypto-technology.

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