Martin Vander Weyer | The Spectator columnists & writers

Could Haldane have helped save us from inflation?

Would Andy Haldane, the economist who left the Bank of England to run the Royal Society of Arts, have made a better governor than Andrew Bailey? You might be thinking that Daffy Duck would have made a better fist than Bailey of combatting the cost of living crisis. But seriously, Haldane was an outsider (backed by this column) in the race won by Mark Carney in 2012, and Dominic Cummings reportedly wanted him to follow Carney in 2020. He’s a brilliant real-world observer and it’s poignant to know that, though he warned Monetary Policy Committee colleagues early last year to brace for inflation, it has ‘surpassed my worst expectations’. He thinks the Bank has been damagingly slow in its responses and that we’re heading for ‘a massive shock’ precipitated by the need for sharply higher interest rates.

No, BP’s profit hasn’t boosted Starmer’s windfall-tax call

BP’s ‘underlying’ first-quarter profit of $6.2 billion, compared with $2.6 billion in the first quarter of 2021, was a direct reflection of the surge in global energy prices. Coming 48 hours before polling day, it also looked like a gift-wrapped on-time delivery for Sir Keir Starmer and his claim that a windfall tax on ‘excess’ profits of North Sea oil and gas extractors would knock £600 off the energy bills of ‘those who need it most’. Perhaps anticipating the BP announcement, Rishi Sunak last week seemed to trim his opposition to a windfall tax, telling Mumsnet ‘of course that’s something I would look at’ if energy companies fail to invest in the right sort of projects. But it’s the ‘if’ that matters there. BP’s net result for the period was in fact a colossal loss, after taking $25 billion of charges from writing off its stake in the Russian oil giant Rosneft.

The one thing Netflix could do to keep me subscribing

Anecdotes and statistics should never be confused, but let’s do just that to build a composite picture of today’s UK economy. As the ‘cost of living crisis’ – barely out of its starting blocks – began to eat spending power and erode confidence, high street sales fell 1.4 per cent in March while non-store retail (largely online) dropped 7.9 per cent. Office occupancy, blighted by working from home, is stuck below 30 per cent of capacity. The City of London is a ghost town on Mondays and Fridays, while West End footfall remains a fifth below 2019 levels. But in case you’re planning a resumed commute or an in-town shopping binge any time soon, be aware that rail workers are threatening ‘the biggest rail strike in modern history’.

Why Elon Musk should forget Twitter and stick to Tesla

I spent Easter agonising over whether to throw the considerable weight of this column behind Elon Musk’s maverick $43 billion bid for Twitter. One thing I didn’t do, however, was consult the multitude of opinions on the matter available via Twitter itself, because I’m afraid I regard it as a satanic cacophony of misinformation and vanity. If that puts me in the position of the late-15th-century scholar who said ‘Printing presses? Pah! The only news I trust is handwritten by monks’, so be it. But when I read Musk’s claim that ‘civilisational risk’ would be decreased by his sole ownership of the ubiquitous microblogging site, I laughed out loud. Not that I think Musk a fool. On the contrary, his leadership of Tesla since he bought into the fledgling electric car company in 2004 really has contributed to civilisation, in the sense that it has pioneered the global automotive industry’s post-carbon transition.

Who can put the toothpaste of inflation back in its tube?

The UN Food and Agriculture Organisation’s food price index rose 13 per cent last month to stand a third higher than a year ago. Within the index, cereals rose by 17 per cent – driven by interrupted Ukrainian and Russian wheat supplies – and vegetable oils by 23 per cent, Ukraine being the world’s biggest sunflower farmer. In the UK, wholesale milk is up 20 per cent, as farmers face rising fuel and feed costs. Supermarkets squeeze suppliers to suppress retail prices: but soon, around the same time as our next quarterly gas bills, we’ll feel the full impact at the checkout. And then what? We may be on the cusp of ‘a new inflationary era’, says Agustin Carstens of the Bank for International Settlements: interest rates must rise, however painfully, to fight it.

Why Channel 4 shouldn’t be privatised

Enough of stagflation forecasts, each more frightening than the last. Enough – for now – of energy policy sermons, as the government at last proclaims a serious nuclear plan. Instead, let’s have a week of real business stories, starting with tales of the old and new City. First, a rum do at the London Metal Exchange. The Bank of England and Financial Conduct Authority are investigating the exchange’s handling, last month, of a ‘short squeeze’ on nickel, provoked by fear of disrupted supplies from Russia. The metal’s price rocketed 250 per cent in two days to trade briefly above $100,000 a ton, reportedly leaving a Chinese tycoon called Xiang ‘Big Shot’ Guangda with a short position that could have cost his Shanghai--based company Tsingshan Holdings $8 billion; one of Tsingshan’s backers was the state-owned China Construction Bank, which was allowed extra time to pay Tsingshan’s margin calls.

Innovators brighten the future

How men’s pants predict economic crashes

Should you happen to spot me these days lurking outside a Calvin Klein boutique, notebook in hand, I assure you I have a serious purpose. I’m applying the method of the former US Federal Reserve chairman Alan Greenspan, who relished statistical minutiae and believed that sales of men’s underpants – an item so out of sight that a chap could readily choose not to replace worn-out ones when he senses an economic pinch ahead – offer a reliable indicator of impending downturns. That’s precisely the sort of trend we need to watch right now, when the Office for Budget Responsibility tells us to expect UK growth at 3.8 per cent this year and 1.8 per cent next year despite the crippling cost-of-living surge and the fear factor of war in Ukraine.

The moral of P&O: too many strategic assets are in foreign hands

P & O once stood for ‘Peninsular and Oriental’, with pleasant connotations of sailings to Cadiz and Constantinople – but after the furious reaction to P&O Ferries’ sacking of 800 UK workers, to be replaced by cheaper overseas agency staff, you might think it stands for ‘Putin and his Oligarchs’. With the mad Russian warmonger filling every headline, now is not a good time to turn yourself into a high-profile hate figure. With the pandemic barely over, now’s also not a good moment to be caught brutalising your workforce. But the man behind this sacking decision did all that in spades. He is Sultan Ahmed bin Sulayem, chairman of Dubai-based port operator and P&O Ferries owner DP World, and reported to have a private island and a hotline to Dubai’s ruling Al Maktoum family.

Biden is right: the crypto world needs to be controlled

President Biden’s executive order ‘Ensuring Responsible Development of Digital Assets’ won praise on all sides, an unfamiliar experience for one routinely dismissed these days as lacking the vigour or grip needed for presidential leadership. The order does little more than call for cross-government research into all things crypto. But in doing so it pleased bitcoin fanciers, NFT collectors and their ilk by acknowledging that their $3 trillion market is here to stay – while also giving comfort to sceptics who’d prefer to see crypto dealings brought under regulatory control like any other financial activity, rather than abandoned to the libertarian anarchy favoured by ardent cryptonauts. But that latter fantasy can’t happen until cryptocurrencies become so universal that they no longer need to interface with dollars and pounds.

Is fracking the answer to the energy crisis?

I’ll approach the hot topic of a ban on Russian oil by way of personal anecdote: I’ve never been a soldier or a spook but I have twice found myself ensconced in secure Nato conference rooms. The first occasion was a group visit to the military alliance’s Brussels headquarters 42 years ago, when an unsmiling American defence expert introduced us to the concept of ‘Mutually Assured Destruction’ – whose acronym was the key to the tense but relatively stable Cold War stand-off. In simple terms, it would have been utter madness for either side to fire the first nuclear missile. The odds on that happening by Kremlin order or error today are by no means as long as they were in 1980. But if that thought is too grim to contemplate, we’d better get our heads around a shorter-priced scenario: mutually inflicted economic mayhem.

At least BP and Shell tried to teach Russia true capitalism

BP will offload the 20 per cent stake in Rosneft, the Kremlin-controlled energy giant, that is the residue of 25 years’ effort to teach true capitalism in Russia. Shell is ditching a deal with Gazprom, the other state oil and gas major, that includes participation in the stalled Nord Stream 2 gas pipeline to Europe and an LNG project at Sakhalin in the Russian far east. Western companies in many other sectors will abandon their footholds in Putin’s empire in the coming days. Russia’s one-generation dalliance with the western way of business – as opposed to lawless homegrown kleptocracy – is over. But just because Rosneft pays handsome dividends, let’s not vilify BP (or Shell) for trying. Back in the Yeltsin era, the world sincerely hoped Russia was set for economic rebirth.

Pipeline politics: what happens if Putin cuts off Europe’s gas?

The price of Brent Crude oil was hovering at $100 a barrel as Germany halted approval of the controversial Nord Stream 2 gas pipeline from Russia in response to Putin’s latest aggression. The oil price is five times its low point in 2020 — and the name itself, from the now-defunct Brent field in the North Sea, is a reminder of the UK’s energy vulnerability. ‘But only 3 per cent of our gas comes from Russia’ is irrelevant because we pay world prices for oil and gas from Norway, the US and the Gulf — prices driven both by physical constraints and global market sentiment. A cut-off of Russian gas supplied via Ukraine, for example, would directly affect only Slovakia, Austria and Italy, but you can be sure it will notch the prices we pay higher.

Bad news, Governor: the wage-rise spiral is already raging

I’ve had the opportunity recently to take part in wage-rise discussions for several small entities in which I’m involved. The conversation has been much the same everywhere. ‘How about we offer them 3 per cent?’ ‘But that’s less than current inflation and they didn’t have a rise when they were on furlough last year.’ ‘So how about 5 per cent?’ ‘Safer to say 7, but they’d still be worse off than before the pandemic. And they’ll get 10 per cent or better if they move anywhere else.’ All of which was perfectly confirmed by official figures this week: annual pay settlements running at 3.7 per cent but (because so many people having been moving jobs for better wages) average pay up by 6.3 per cent in a year and by more than 10 per cent since February 2020.

Why windfall taxes are a rotten idea

Annual profits of £9.5 billion at BP this week followed a £20 billion jackpot at Shell last week, thanks to soaring global wholesale energy prices that BP boss Bernard Looney recently said had turned his company into a ‘cash machine’. For the very same reason, Ofgem has announced a 54 per cent (roughly £700) increase in the energy price cap for 22 million UK customers, while the Chancellor is scrabbling to keep at least some of those households out of ‘fuel poverty’ by offsetting half the rise with a £200 energy discount, to be recouped over five years, plus a £150 council tax rebate. As investors in the oil giants look forward to enhanced dividends and multi--billion share buybacks, was there ever a plainer or timelier case for a windfall tax? Ed Miliband, Labour’s shadow secretary for climate change, says it ‘beggars belief’ that the government won’t do it; the Lib Dems and Greens are naturally gagging for it; more significantly, so were 75 per cent of Conservative voters polled by Savanta ComRes in mid-January.

The ghosts that could come back to haunt Blair

I’m picturing Sir Tony Blair enjoying a fitting of his Garter robes after watching Boris Johnson stagger through PMQs. ‘I’m in the clear these days,’ he’s thinking. ‘So much water under the bridge, what could possibly come back to haunt me?’ Well, here are two items he might like to consider: the application of the 2003 US-UK extradition treaty in the case of Dr Mike Lynch; and Foreign Secretary Liz Truss’s statement that new sanction rules will mean ‘nowhere to hide for Putin’s oligarchs’ and their fin-ancial assets. Lynch was the founder of Autonomy, a UK software firm which Hewlett-Packard of the US bought in 2011 for $11 billion — but subsequently declared worth very little, accusing Lynch of cooking its books to secure the price.

Spectator Out Loud

Martin Vander Weyer, Laurie Graham, Michael Mosbacher

15 min listen

Spectator Out Loud

Martin Vander Weyer, Laurie Graham, Michael Mosbacher

15 min listen

On this week's episode, we’ll hear from Martin Vander Weyer on the crash of crypto. (00:47)Next, Laurie Graham on the difficulties of downsizing. (04:20)And finally, Michael Mosbacher on the history of the fur industry. (12:20)Produced and presented by Sam HolmesSubscribe to The Spectator today and get a £20 Amazon gift voucher:www.spectator.co.uk/voucher

What’s really behind the crypto crash

‘Market turmoil’ looks set as the theme of the week, so let’s take a close look at a trading arena more prone to mayhem than most. Why has bitcoin lost half its value since November? First, I could make a case that since crypto investment has become at least a small part of many mainstream portfolios, its prices tend to respond to the same signals that influence conventional share indices — rather than following fantasy flight paths of their own. So just as FTSE and Nasdaq investors are seriously rattled by the prospect of war in Ukraine on top of existing fears about interest-rate rises and tighter money, so crypto fans are also naturally nervous. And when tech fanciers become sellers of stocks such as Netflix and Peloton (the maker of digitally connected exercise bikes), which led a sell-off of former ‘lockdown winners’ at the end of last week, so bitcoin holders — likely in many cases to be the very same people — are cashing out too.

The TV licence is a dead duck

‘Tell me we’re winning the media battle!’ I imagine Unilever boss Alan Jope barking at his team on Tuesday, following the revelation on Sunday of his rejected £50 billion bid for GlaxoSmithKline’s consumer healthcare arm. ‘Yes, sir,’ replies the flustered PR, ‘Very much so… except for top investor Richard Buxton of Jupiter telling the FT: “The idea of letting the goons at Unilever run [the GSK business] is laughable.” Then there’s an analyst in the Telegraph saying: “We can’t imagine many things that would unnerve us more about Unilever” than this deal going ahead. Oh, and our shares fell 7 per cent yesterday.’ Jope is now huddled with his advisers trying to work out whether he can up his bid to the £60 billion that might be acceptable to GSK shareholders without crippling his own balance sheet.

Hunterston’s closure is the nuclear accident no one noticed

So farewell, Hunterston B, the nuclear power plant on the Firth of Clyde that shut last week after 46 years’ service. It will be followed this summer by Hinkley Point B in Somerset and in 2024 by Hartlepool and Heysham, leaving the UK with just four nuclear stations boasting five gigawatts of generating capacity between them — when they’re not suffering extended ‘outages’ for maintenance and repair. That compares with 15 stations and 13 gigawatts, meeting a quarter of UK electricity demand, at the UK’s mid-1990s nuclear peak. Meanwhile, the 3.2 gigawatt Hinkley Point C, developed by EDF of France and due on stream in 2026, ‘may be delayed after defects were found in a similar reactor in China’, reported New Civil Engineer last month — and Sizewell C in Suffolk, also EDF’s, awaits a government green light.

Will the energy price spike bring down Boris?

What does the new year have in store for consumers — and families trying to make ends meet? A stumbling recovery at best, with a continuing tide of inflation that I predict will swiftly pass the Bank of England’s current forecast of ‘around 6 per cent by spring 2022’ and take much longer to turn than the Bank’s Cnut-like posturing seeks to suggest. And driving that surge will be the energy price spike, which could be the factor — far more potent than endemic sleaze and proven incompetence — that topples the Johnson regime. Fact: wholesale natural gas prices have quadrupled in the past year. They may drop again in the medium term when the global interplay of demand, supply and geopolitical tension returns to something like its status quo ante; or they may not.

Spectator Briefings

Inflation, rates and dividends: A financial review of 2021

36 min listen

Spectator Briefings

Inflation, rates and dividends: A financial review of 2021

36 min listen

The world economy is bouncing back from the impacts of Covid 19. It has been bumpy year of recovery which has included labour shortages and consistent inflationary pressures. But it hasn't been all doom and gloom. Kate Andrews, the Spectator's economic's editor reviews this financial year. She is joined by Martin Vander Weyer, the Spectator's business editor and Paul Abberley, chief executive of Charles Stanley group. This podcast is kindly sponsored by Charles Stanley. The recording took place just before the Bank of England announced the rise of interest rates to 0.25%.

Gastro-nomics: a foodie’s guide to a changing world

Twice recently I’ve been asked my opinion of ‘Doughnut Economics’. The first time, I was tempted to cover my ignorance with a Johnsonian impromptu riff on supply-chain issues in the deep-fried batter sector. But sensing seriousness I steered off and googled the phrase later, so I was ready the second time to discuss Kate Raworth’s 2018 book of that title, about why we should abandon pursuit of GDP growth in favour of a gentler model in which we take better care of nature and each other — illustrated by her ‘doughnut of social and planetary boundaries’. That’s a debate for another day, but what I really admire is the title itself, inviting readers to think about the changing world by way of sweetmeats: very much what this column tries to do in parables disguised as restaurant tips.

Don’t strand Cambo until our energy future is secure

If the phrase ‘stranded asset’ hasn’t yet entered your vocabulary, here’s a useful example of what it means. The 178 million barrels of oil in the Cambo field west of Shetland may stay there for ever because of government shilly-shallying over whether and when to end exploitation of the UK’s remaining hydrocarbon resources — while we import equivalent volumes of oil or gas from the Middle East, Norway and Vladimir Putin’s Russia, just to keep our lights on. Shell — which had a 30 per cent interest in Cambo but is under pressure from shareholders, activists and regulators to accelerate its shift to cleaner energy — has pulled out of the project on the grounds of its ‘weak economic case’ and ‘potential for delays’, the latter obvious code for lack of faith in political support.

For industry, the pandemic isn’t over yet

‘So you think it’s all over? Ho ho ho!’ That’s the message from Satan’s dark laboratory (twinned with Wuhan’s) where the Omicron variant turns out to have been bubbling in its test tube while we dared to resume our normal lives during the autumn. But whether that ugly little globule ruins Christmas or proves to be largely a scare story, the pandemic’s disruption of business ain’t over yet either: supply chain hold-ups, labour shortages, cost spikes and debt pressures continue apace. Here, for example, is news that the UK car industry produced fewer than 65,000 cars in October, down 41 per cent on the same month last year and its lowest October output since 1956. Production has declined for four consecutive months, partly thanks to the closure of Honda’s Swindon plant, but chiefly because of the global shortage of microchips which industry chiefs think could last well into 2022.

Why you should be wary of buy now pay later

Are you logged on to Klarna, Clearpay, Laybuy or Zilch for your Black Friday shopping binge — or are you an old-timer like me who still uses traditional credit cards and even sometimes tries to pay for purchases in cash? If those four brand names meant nothing to you, you are yet to join the millions of UK shoppers who have discovered ‘buy now pay later’ (BNPL) apps that offer, with a couple of simple checkout clicks, payment for fashion and beauty purchases, and even groceries, in a series of interest-free instalments. ‘Shopping just levelled up’ is Klarna’s witty slogan for its three-instalment offer; at Laybuy, it’s six; at Zilch, 25 per cent up-front and the rest later. Own whatever you love and deserve — from Boohoo, Asos, Pretty Little Thing or Lush, to name a few — but don’t pay for it yet.

Andrew Bailey has been a bitter disappointment

Earlier this year I drew a comparison between the Bank of England governor Andrew Bailey and the Metropolitan police commissioner Dame Cressida Dick. When appointed, both were hailed as head-and-shoulders the best qualified internal candidate for the job. Yet both have subsequently attracted volleys of flak for everything that has gone wrong on their watch. That’s a peril of the media age for any high-profile public servant. But Dame Cressida, hugely respected by fellow officers, seems to rise above it. Bailey, by contrast, is beginning to look beleaguered, a recent fiasco over interest rates having followed the rattling of several skeletons in his record as a former regulator. Many in the City now wonder whether he was ever the right man for the top job.