FTSE 100 ▼ 7,535.46 -41.74 FTSE 250 ▼ 19,614.20 -41.85 DOW ▼ 27,219.85 -115.78 NASDAQ ▼ 8,185.21 -37.59 £/$ ▲ 1.243 +0.002 £/€ 1.107 unc. €/$ ▲ 1.123 +0.002 BUSINESS WITH PERSONALITY JESS CLARK @jclarkjourno A CONSERVATIVE MP yesterday branded property developer Persimmon a group of “crooks, cowboys and con-artists” after faults emerged in Help to Buy homes built by the firm. Speaking during Prime Minister’s Questions, Harlow MP Robert Halfon said he had met constituents living in homes built by Persimmon that were “shoddily built, with severe damp and crumbling walls”. Persimmon was forced to apologise to customers earlier this week following a Channel 4 investigation that found one of its new build homes had a total of 295 faults, including fire doors that did not shut, leaky sinks and faulty waste connections. The developer makes an average of £66,000 profit for every Help to Buy home it sells at a return of 30 per cent, higher than any of its competitors. Former chief executive Jeff Fairburn left the company last year following a long-running row over his £75m bonus. A Persimmon spokesperson said it was in regular contact with those affected and Halfon about the issue. THURSDAY 18 JULY 2019 ISSUE 3,416 CITYAM.COM FURIOUS CROWD BARKS AT CITY’S WATCHDOG BOSS Tory MP slams Persimmon ‘crooks’ The firm said the damp issues lay with the manufacturer of blocks used in the homes SEBASTIAN MCCARTHY @SebMcCarthy THE HEAD of Britain’s financial watchdog was heckled by aggrieved small-scale investors at a public meeting yesterday, following a spate of corporate controversies that have cast a cloud over the body’s reputation in recent months. Andrew Bailey, the chief executive of the UK’s Financial Conduct Authority, faced a grilling from victims of several high-profile company scandals. Cries of “stop protecting the crooks” and “run away slimy” were shouted at the end of yesterday’s crowded meeting in Moorgate, where members of the public demanded answers to their questions on fraud cases and compensation. Questions concerning the suspension of Neil Woodford’s flagship fund, the Royal Bank of Scotland’s now-defunct Global Restructuring Group (GRG) and the collapse of London Capital & Finance (LCF) were all put to the FCA board during the two-hour meeting. The exchanges came as speculation mounts over Bailey’s chances of succeeding Mark Carney as the next Bank of England governor. Bailey refused to comment yesterday on whether he had been interviewed for the top job. One attendee called on the FCA to make a more proactive explanation as to what it does and does not regulate to help the public, while another person at the meeting claimed that many investors had only put their money into LCF because of FCA approval. In April the FCA was told by the government to conduct an independent probe into its oversight of LCF, which fell into administration after taking £236m from investors. Bailey yesterday described the LCF’s collapse, which has resulted in thousands of first-time and retired investors fearing the loss of their savings, as a “worrying situation”, as he discussed new potential “regulatory perimeters” that would be aimed specifically at products or examples that typically come outside the FCA’s remit. “What’s concerning is that we have seen an explosion in the number of high-yield investment opportunities that get offered on the internet,” Bailey said, adding that there was a strong case for regulating how financial products are marketed online. He also hit out at Woodford, accusing the former star trader’s flagship fund of “following the letter, but not the spirit” of the rules. On cryptocurrency, he warned: “Only buy a cryptoasset if you are prepared to lose all your money.” FREE LIFT OFF: WHY THE NEXT MOON LANDING WILL BOOST INNOVATION BACK ON EARTH P18
@jclarkjournoA CONSERVATIVE MP yesterdaybranded property developerPersimmon a group of “crooks,cowboys and con-artists” afterfaults emerged in Help to Buyhomes built by the firm.
Speaking during PrimeMinister’s Questions, Harlow MPRobert Halfon said he had met
constituents living in homes builtby Persimmon that were “shoddilybuilt, with severe damp andcrumbling walls”.
Persimmon was forced toapologise to customers earlier thisweek following a Channel 4investigation that found one of itsnew build homes had a total of 295faults, including fire doors that didnot shut, leaky sinks and faultywaste connections.
The developer makes an averageof £66,000 profit for every Help toBuy home it sells at a return of 30per cent, higher than any of itscompetitors.
Former chief executive JeffFairburn left the company last yearfollowing a long-running row overhis £75m bonus.
A Persimmon spokesperson saidit was in regular contact with thoseaffected and Halfon about the issue.
THURSDAY 18 JULY 2019 ISSUE 3,416 CITYAM.COM
FURIOUS CROWDBARKS AT CITY’SWATCHDOG BOSS
Tory MP slams Persimmon ‘crooks’
The firm said the damp issues lay with the manufacturer of blocks used in the homes
SEBASTIAN MCCARTHY
@SebMcCarthyTHE HEAD of Britain’s financial watchdog washeckled by aggrieved small-scale investors at apublic meeting yesterday, following a spate ofcorporate controversies that have cast a cloudover the body’s reputation in recent months.
Andrew Bailey, the chief executive of the UK’sFinancial Conduct Authority, faced a grillingfrom victims of several high-profile companyscandals. Cries of “stop protecting the crooks”and “run away slimy” were shouted at the endof yesterday’s crowded meeting in Moorgate,where members of the public demandedanswers to their questions on fraud cases andcompensation.
Questions concerning the suspension of NeilWoodford’s flagship fund, the Royal Bank ofScotland’s now-defunct Global RestructuringGroup (GRG) and the collapse of LondonCapital & Finance (LCF) were all put to theFCA board during the two-hour meeting.
The exchanges came as speculationmounts over Bailey’s chances ofsucceeding Mark Carney as the next Bankof England governor. Bailey refused tocomment yesterday on whether he hadbeen interviewed for the top job.
One attendee called on the FCA to makea more proactive explanation as to what itdoes and does not regulate to help thepublic, while another person at themeeting claimed that many investorshad only put their money into LCF
because of FCA approval. In April the FCA was told by the government to
conduct an independent probe into its oversightof LCF, which fell into administration after taking£236m from investors.
Bailey yesterday described the LCF’s collapse,which has resulted in thousands of first-time andretired investors fearing the loss of their savings,as a “worrying situation”, as he discussed newpotential “regulatory perimeters” that would beaimed specifically at products or examples thattypically come outside the FCA’s remit.
“What’s concerning is that we have seen anexplosion in the number of high-yieldinvestment opportunities that get offered on theinternet,” Bailey said, adding that there was astrong case for regulating how financialproducts are marketed online.
He also hit out at Woodford, accusing theformer star trader’s flagship fund of“following the letter, but not the spirit” ofthe rules.
On cryptocurrency, he warned: “Only buya cryptoasset if you are prepared
to lose all yourmoney.”
FREE
LIFT OFF: WHY THE NEXT MOON LANDING WILL BOOST INNOVATIONBACK ONEARTH P18
CITYAM.COM02 THURSDAY 18 JULY 2019NEWS
ZUMA ON THE BRINK OFGRAFT INQUIRY WALKOUTSouth Africa’s former president JacobZuma was on the brink of a walkoutfrom a judicial inquiry into claims ofcorruption against him, after hislawyers protested about the questionshe was facing. Zuma, who was fired aspresident and replaced with CyrilRamaphosa by the ruling AfricanNational Congress last year, abruptlycut short his answers yesterday as hislawyers attacked “cross-examining” bythe inquiry.
G7 NATIONS STRUGGLE TOAGREE ON DIGITAL TAXFinance ministers of the biggestwestern economies were struggling to
compromise last night on how to taxtech giants such as Google andFacebook that often pay little corporatetax in the countries where they profitfrom consumers and their data.
CONSERVATIVE MP QUITGOVERNMENT OVER HS2Tory MP Bob Seely announced heresigned from the government over itssupport of the “white elephant” HS2 railproject. Seely, who backs Boris Johnsonfor prime minister, called for the “pie-in-the-sky” scheme to be scrapped. It isthe 50th resignation under TheresaMay’s time in office.
FACEBOOK HAS THE LASTWORD ON PROFANITYFacebook has compiled a foul-mouthedcompendium of swear words in almostevery language. The list is believed to bethe largest ever, and is the result of thesocial media giant trawling throughmountains of hate posts.
PELOSI SAYS DEBT CEILINGDEAL NEEDED BY FRIDAYUS House speaker Nancy Pelosiyesterday set a Friday deadline forCongress and the Trump administrationto reach an agreement on raising the USgovernment’s borrowing limit andsetting new overall spending levels.
NATIONS MAKE HUNDREDSOF CYBER ATTACKS ON USSuspected nation-state hackers fromRussia, Iran and elsewhere havelaunched nearly 800 cyberattacksagainst political organisations over thepast year that have been detected byMicrosoft, with the vast majority of theattempts targeting groups based in theUS.
FINANCIAL TIMES THE TIMES THE DAILY TELEGRAPH THE WALL STREET JOURNALWHAT THEOTHERPAPERS SAYTHISMORNING
BBC COULD SWITCH TOSUBSCRIPTION SERVICEThe BBC could switch away from alicence fee to a Netflix-style voluntarysubscription model, its director generalsaid yesterday. The compulsory licencefee is guaranteed until 2027, after whichthe broadcaster will have to negotiate anew funding agreement.
NO-DEAL BREXIT ‘WILL SENDUK INTO A RECESSION’Britain will slip into recession next yearand the economy will be three per centsmaller if there is a no-deal Brexit, theOffice for Budget Responsibility (OBR) isexpected to say today. The OBR is dueto give its first assessment of the impactof a no-deal scenario today.
OWEN BENNETT
@owenjbennettTHERESA May hit out at the growing“uncompromising absolutism” of pol-itics as she reflected on her failure todeliver Brexit in her final majorspeech as Prime Minister.
In what is set to be her valedictoryaddress, May called for political dis-cussion to move from the extremefringes, and warned that “words haveconsequences”.
She once again expressed regret andnot being able to get a Brexit dealthrough parliament, but claimed oth-ers had not been as willing to compro-mise as she had.
“I put my own job on the line”, shesaid, adding: “I was told that if I said Iwould stand down then the voteswould come behind the deal. I said Iwould stand down and I am doing so.The votes didn’t come. That’s politics.”
May’s swansong speechtakes aim at UK populism
STIRLING EFFORT London Bridge station shortlisted for UK’smost-coveted architecture prize for its ‘voluminous concourse’
ABELEAGUERED Chris Grayling appeared in front of theTransport Select Committee yesterday for what was likelyhis final outing as transport secretary. Among the issuesraised by MPs for him to answer was Grayling’s decision to
hand a £13.8m ferry contract for supplying medicines to the NHSto a company that owned no ships, resulting in a lawsuit fromEurotunnel which the government decided to settle for £33m.The ferry contract was subsequently cancelled entirely, at a cost tothe taxpayer of £50m. Grayling is not regarded as Theresa May’smost competent minister. He left a litany of mismanagement forhis successors at the Ministry of Justice to mop up, and otherlowlights from his transport tenure include legal action forbarring Virgin Stagecoach for bidding for a rail franchise, lastMay’s timetable shambles that saw up to 780 train servicescancelled each day because “no one took charge”, and a less thansure-footed response to the drone that shut down Gatwick inDecember. But the ferry debacle goes beyond the ineptitude ofone transport secretary. The purpose of the contract was toensure the supply of critical imports in the case of a no-dealBrexit. When, during the multiple attempts to ram May’s EUwithdrawal agreement through parliament, it became apparentthat the government had no intention of risking no-deal even as alast resort, it was scrapped – presumably on the basis that therewas little point planning for something that would never beallowed to happen. Now, with less than a week to go until the UKhas a prime minister with a very different Brexit attitude, thecurrent government’s no-deal preparation (or lack thereof)suddenly has renewed importance. While the candidates havesaid that they will aim for a deal, both have been open – evenenthusiastic – about the possibility of leaving without one on 31October. This is an eventuality for which businesses and financialregulators have been preparing since the referendum three yearsago. Westminster and Whitehall have not. While politicians haveblustered about Britain’s ability to withstand the shock of no-deal,actual contingency planning has been woefully inadequate. Mostof the civil servants tasked with no-deal preparation were stooddown months ago, returning to their normal Whitehall duties.The new prime minister will have just three months to turnWhitehall into a no-deal machine. Grayling’s ferry fiasco shouldserve as a reminder not just of what must be done, but theconsequences of getting it wrong.
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THE CITY VIEW
Much of May’s speech focused on therise of “absolutism”, and she warnedthat populists viewed the world“through the prism of ‘us’ and‘them’”.
She added: “Today an inability tocombine principles with pragmatismand make a compromise whenrequired seems to have driven ourwhole political discourse down thewrong path.
“It has led to what is in effect a formof ‘absolutism’ – one which believesthat if you simply assert your viewloud enough and long enough youwill get your way in the end or thatmobilising your own faction is moreimportant than bringing others withyou.”
Yet some of May’s own words duringher premiership were seen as fuellingthese views.
In her first Conservative party con-ference speech as Prime Minister in
2016, she claimed people who seethemselves as “a citizen of the world”are in fact “a citizen of nowhere”.
In November 2018, she referred to EUcitizens who had come to the UKunder freedom of movement rules as“queue jumpers” – a phrase she laterretracted.
When these examples were put toMay, she replied: “Has every sort ofphrase I’ve used always been as perfectas it should be? No. There will bephrases that people will have inter-preted in different ways from whatwas intended.”
In her speech, May also hit out atpoliticians “making promises you can-not keep, or by just telling peoplewhat you think they want to hear.”
When asked if she was referencingBoris Johnson, the man most likely toreplace her as Prime Minister, in herspeech, May replied: “No, this is a gen-eral observation.”
03THURSDAY 18 JULY 2019 NEWSCITYAM.COM
JOE CURTIS AND EMILY NICOLLE
@joe_r_curtis @emilyjnicolleGOOGLE has “terminated” its contro-versial censored Chinese search engine,codenamed Project Dragonfly, a topexecutive has said as US tech giantsentered their second day of scrutiny.
The project, which a former Googlestaffer had called “disturbing”, wasshelved last December, but suggestionscontinued to circulate that the techgiant was still running it.
Karan Bhatia, Google’s vice-presidentof global government affairs andpublic policy, provided the first officialconfirmation of the project’s cancella-tion to the US Senate JudiciaryCommittee on Tuesday night.
Dragonfly started in early 2017,according to The Intercept, and pro-ceeded at pace after Google chiefSundar Pichai met a Chinese govern-ment official. Later Google presented alist of thousands of banned websites,
Tensions rise asUS tech giantsunder scrutiny
such as Wikipedia and the BBC, topurge from search results.
However, the project began to fallapart last year when Dragonfly devel-opers were barred from using datafrom Google’s Chinese site 265.com.
US politicians also applied similar lev-els of scrutiny to a plan by Facebook tolaunch its own Libra cryptocurrency.
In his second testimony this week,Facebook’s crypto chief David Marcuswas told by the US House FinancialServices Committee that it shouldcommit to carrying out a Libra pilotprogramme with 1m users overseen byUS financial regulators, including theFederal Reserve.
Committee chair Maxine Waters saidFacebook and its partners “will wieldimmense economic power that coulddestabilise currencies and govern-ments” if it launches Libra in 2020.
A separate meeting of G7 financeministers yesterday said strong regula-tions must be in place beforeFacebook can go ahead with its plan.
Elon Musk has plans to connecthuman brains to computersJESS CLARK
@jclarkjournoBILLIONAIRE Elon Musk hasrevealed plans to developtechnology to allow humanbrains to connect withcomputers.
Secretive “brain-machineinterface” firm Neuralinkwas founded in 2017 to fightthe “existential threat” of
artificial intelligence (AI) developingfurther than humans.
At an event in California Musksaid the invention could
ultimately give humans the“option of merging with AI”by implanting a chip into thebrain.
The company said it hopesto begin testing the product
on humans by the end ofnext year
followingregulatoryapproval.
EBAY BEATS ESTIMATES ASSHOPPERS FLOCK TO SITEEbay beat Wall Street estimates forquarterly revenue yesterday, as a multi-year effort to make its platforms easierto use attracted more customers. The e-commerce giant reported net revenue of$2.69bn (£2.16bn) for the second quarterended 30 June, down from $2.64bn ayear earlier. Analysts expected revenueof $2.68bn. Ebay’s net income fromcontinuing operations fell to $403m from$638m a year earlier. California-basedEbay announced a review of its Stubhuband Ebay Classifieds businesses inMarch and said it would name two newdirectors to its board as part of anagreement to ease pressure on theboard from activist investors. Ebayshares were valued at $39 yesterday,down 2.2 per cent.
IBM SHARES FALL AS LEGACYBUSINESS WEAKNESS BITESIBM beat analysts’ estimates for second-quarter profit yesterday, propped up byrecurring growth in its high-margincloud computing business, sending itsshares up as much as four per cent inextended trading. The New York-basedtechnology services giant, whichwrapped up the mega cloud merger withLinux maker Red Hat last week, facedyears of revenue declines while it shiftedfocus to the cloud from establishedbusinesses such as mainframe servers.Revenue from the cloud unit, the faster-growing service and a key metric for thecompany, grew five per cent to $19.5bn(£15.7bn) in the following 12 months.Revenue from the cloud and cognitivesoftware segment was up 3.2 per cent at$5.7bn.
BANK OF AMERICA TRIMS NETINTEREST INCOME GUIDANCEBank of America reported a 10 per centincrease in quarterly profit yesterday asa healthy US economy boosted demandfor loans. Net income applicable tocommon shareholders rose to $7.1bn(£5.7bn), or 74 cents per share, in thesecond quarter ending 30 June from$6.5bn, or 63 cents per share, a yearearlier. Revenue, net of interest expense,was up about two per cent at $23.1bn.Analysts had expected a profit of 71cents per share and revenue of $23.2bn.Chief financial officer Paul Donofrio saidon a call with reporters the sequentialdecline was due to lower long-terminterest rates. “I don’t think you canextrapolate that into the future becauselong-term rates have stabilised at thispoint,” he said.
US CORPORATE RESULTS ROUND-UP
STRANGER THINGS HAVE HAPPENEDNetflix staggers as subscribers stay away
THE SUCCESS of Netflix shows such as Stranger Things (above) failed to attract moresubscribers, results showed last night, causing the streaming giant’s shares to fall 11per cent afterhours. Netflix missed its own forecast of 5m users to gain just 2.7msubscribers in its second quarter, well below the 5.5m users it bagged last summer.
Elon Musk has stakes inmany high-tech ventures
05THURSDAY 18 JULY 2019 NEWSCITYAM.COM
ALEX DANIEL
@alexmdanielINVESTMENT firm Pershing SquareHoldings is facing open rebellion byone of its shareholders, after itannounced a decision to issue 20-yeardebt yesterday.
Asset Value Investors (AVI) has sentan open letter to Pershing Squarechair Anne Farlow, criticising the deci-sion to issue $400m (£322m) of debtwithout consulting investors.
London-listed Pershing’s boss BillAckman first established himself byspearheading activist investor cam-paigns against a string of US firmsincluding Wendy’s restaurants.
Now, he finds himself on the receiv-ing end of one.
AVI yesterday described the debtissuance as an “outrageous decision”.
It owns a three per cent stake inPershing Square, a firm which is val-ued at £3.1bn.
AVI said issuing the long-dated debtcould get in the way of PershingSquare’s ability to reduce the 28 per
Pershing Squarefaces activistinvestor revolt
cent discount to net asset value (NAV)at which its shares trade.
“At AVI, we pride ourselves on beingan engaged shareholder in all ourinvestee companies, and our first pref-erence is always to resolve contentiousissues behind closed doors.
“With the debt issue beingannounced as a ‘fully committed’ faitaccompli, we see no choice other thanto write to you in this public forum inthe hope that sunlight is the best dis-infectant for the company’s corporategovernance failings.”
In an apparent reference to the trou-bles of Neil Woodford’s investmentcompany, AVI research chief TomTreanor said: “A near 30 per cent dis-count is usually only found on invest-ment companies where the assets aredistressed or highly illiquid, wherethere is some doubt as to the credibili-ty of the valuation, or where the com-pany’s structure of constitution givesrise to a mis-alignment of incentivesand conflict of interest.”
Pershing Square said it takes share-holders’ rights seriously.
Pension savings left in cash as M&Gproperty fund blocks withdrawals KATHERINE DENHAM
@katjdenhamINSTITUTIONAL investors are beingblocked from withdrawing moneyfrom a major UK property fund, whilecontributions made by thousands ofpension savers into the plan will beredirected into cash.
Asset manager M&G has stoppedinvestors exiting its £636m UKProperty Fund for up to six months
after some clients – most of which arelarge pension schemes – sought tomove their money elsewhere.
Earlier this month City A.M. revealedsimilar restrictions applying to pen-sion-holders with money inPrudential’s UK Property Fund, whichbuys units in the M&G strategy.Withdrawals from the fund have beensubject to delays of up to six monthssince 3 June, although the companysaid some exceptions are made.
On 12 July, Prudential made the deci-sion to temporarily stop all new contri-butions going into the M&G fund,including regular pension payments,saying it will instead redirect themoney into a separate cash fund.
Scott White, Prudential UK head ofcommunications, said: “Given thatthere is a deferral period to withdrawmoney, we didn’t think that it was fairfor people to continue to contributeinto that fund.”
ITALY’s tax police have seized board-meeting minutes from infrastructure groupAtlantia whose toll-road subsidiary operated the Genoa bridge that collapsed lastyear. The raid is part of the investigation into the disaster, which killed 43 people.
POLICE RAID Italian cops seize Atlantiaboard filings after Genoa bridge collapse
WATCHDOG HUNTS PENSIONPAYMENT-DODGING FIRMS The Pensions Regulator (TPR) saidyesterday it will hunt down companiesthat change their names to dodgeworkplace pension obligations. Anumber of small and medium-sizedemployers have tried to employ“shape-shifting” tactics to avoid payingtheir staff’s pensions, it said. Thosebreaching their auto-enrolment duties could be subject to “short-noticeinspections”. The regulator alsosuspects “rogue advisers” could besuggesting the plan to companies. TPRinvestigators are now working withcounterparts at the Insolvency Serviceand other agencies to take actionagainst offenders that try to use thisploy. Businesses are obliged toautomatically enrol eligible workersinto a workplace pension and makecontributions to it.
ASTRAZENECA PROMISESCASH TO BACK UP PAYMENTS British-Swedish drugmaker Astrazenecahas promised to plug a £12m hole, ifneeded, to honour redundancypayments for a plant which it sold in2016. The pharma giant said it wouldstep in if workers do not get what theyare owed from Avara Avlon, whichbought the plant in Avonmouth, Bristol.The move comes after pressure fromunions who claimed that Astra hadgiven a “cast iron guarantee” to step in ifthe plant folded within three years.Avara went bust early last year, leavingadministrators scrambling to find themoney to pay off its creditors, including£12m for staff. Steve Preddy, theregional secretary for union Unite, saidthe news would “comfort” many of theformer workers who had been withdrugmaker Astrazeneca for most oftheir working lives.
IN BRIEF
CITYAM.COM06 THURSDAY 18 JULY 2019NEWS
HARRY ROBERTSON
@henrygrobertsonTHE PRICES in UK shops rose by twoper cent in the 12 months to the endof June, official figures showed yester-day, with clothing and food costs ris-ing most rapidly in the last year.
The two per cent consumer priceindex (CPI) figure was bang on theBank of England’s target inflationrate, which it thinks is ideal for ensur-ing smooth growth in the economy.
It means that British workers’ realpay is rising, letting them buy morewith their wages.
Official figures on Tuesday showedweekly earnings rose 3.6 per cent inthe year to June, meaning real paygrew by 1.7 per cent when housingcosts are taken into account.
With the more volatile categories offood and energy removed, inflationrose by 1.8 per cent in June year onyear, a rise of 0.1 percentage pointscompared with May’s figure, accord-
Inflation staysat BoE target forsecond month
London house prices crumbleunder worst plunge in 10 yearsJOE CURTIS
@joe_r_curtisLONDON house prices suffered astaggering 4.4 per cent annual dropin May, their worst annual drop sincethe financial crisis, public datarevealed yesterday.
While UK house prices rose 1.2 percent compared to May 2018, London
house prices sank, the Office forNational Statistics (ONS) said.
Homes in the capital also fell on amonthly basis, dropping 2.5 per centfrom April to May to leave the averageLondon house price at £457,471.
The 4.4 per cent fall was the worstannual decline London house priceshave seen since August 2009 at theheight of the financial crisis.
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ing to the data released yesterday bythe Office for National Statistics (ONS).
Another of the ONS’s measures ofinflation, which includes housingcosts, stood at 1.9 per cent in June andwas unchanged from May.
David Cheetham, chief market ana-lyst at online trader Xtb, said Bank ofEngland governor Mark Carney “andhis fellow rate-setters are unlikely toplace too great a weight on this”.
He said economic data is “still verymuch of secondary importance giventhat Brexit uncertainty continues toloom large”.
Phil Smeaton, chief investment offi-cer at Sanlam UK, said central bankswere looking to “prematurely” cut interest rates.
“Weaker growth and higher infla-tion, commonly known as stagflation,is an increasingly possible outcome,”he said.
Yet he added it was “pragmatic” tonot “apply the brakes while the UK’spolitical situation is so uncertain”.
LONDON CONSTRUCTIONMARKET PICKS UP STEAMLondon’s construction marketappears to be losing patience withBrexit uncertainty, as output growthgains speed and workloadexpectations gather pace for theyear ahead. According to a quarterlyindustry survey by RICS, 14 per centmore respondents reported anincrease in construction workloadsacross London in the second threemonths of 2019. This is up from aminus two per cent net balance inthe first quarter of the year.
ARBUTHNOT PROFIT RISESAS IT TARGETS GROWTH Arbuthnot Banking Group reportedan uptick in profit during the firsthalf of 2019, as it presses ahead witha major capital-raising plan toachieve future growth. The historicprivate and commercial bank,which is listed on London’sAlternative Investment Market,reported pre-tax profits of £2.9m inthe six months to 30 June, risingfrom £1.2m in the same period ayear earlier.
FORMER LLOYDS BOSS TOCHAIR BANKING BOARDDame Susan Rice is taking on therole as chair of the BankingStandards Board (BSB) as itprepares for the sector’s future post-Brexit. Rice, a former boss of LloydsTSB Scotland and the first womanto head a UK clearing bank, willbegin the new role from the start ofnext year, as current chair DameColette Bowe nears the end of herfive-year term.
IN BRIEF
COMMUTER CHAOS Waterloo tracksidefire closes nine platforms in major incident
COMMUTERSwere warnedagainst usingWaterloo stationduring the rushhour yesterdayafter a fire causednine platformclosures. Delayswere set tocontinue into thismorning afterequipmentsustained“significantdamage” fromthe blaze.
07THURSDAY 18 JULY 2019 NEWSCITYAM.COM
JESS CLARK
@jclarkjournoMR KIPLING owner Premier Foodspassed its executive pay recom-mendations yesterday after-noon despite frustratedshareholders’ anger at thestate of the company.
Shareholder advisoryfirm ISS had recommend-ed that investors opposethe remuneration reportafter the company paidformer chief executiveGavin Darby a full salary of£864,000.
In total 11.96 per cent of the share-holders that voted decided to oppose the
Mr Kipling owneravoids pay revoltby shareholders
director’s remuneration report at theannual general meeting (AGM).
Shareholder Richard Cooper told CityA.M. that the pay decision was
“unregulated unfairness”. One investor said PremierFoods was the “laughingstock of the City” and
branded Darby’s leader-ship “a disaster”. “We came here and get
Ambrosia, you came here andget millions,” another said, criticis-
ing the firm’s lack of dividend payments.
Activist investor Elliott takes stakein struggling insurance firm SagaJESS CLARK
@jclarkjournoUS ACTIVIST investor Elliott hastaken a stake in troubled tourismand insurance firm Saga in a movethat could put pressure onmanagement to boost returns.
Shares in Saga closed more than13 per cent up yesterday followingthe announcement that ElliottAdvisors had taken a 5.14 per cent
chunk of the company. The embattled firm, which is
hunting for a new chief executivefollowing Lance Batchelor’s exit,issued a £75m profit warning inApril.
Elliott is a prolific activistinvestor. Last year it promptedWhitbread’s sale of Costa Coffee toCoca-Cola and also backedMelrose’s £8bn hostile takeover ofGKN.
Russ Mould, investment directorat AJ Bell, said: “And so it begins.Saga’s dramatic fall from grace hasseen its share price fall to such lowlevels that an activist investor haspopped up on the shareholderregister.”
“We have good and openrelations with all of ourshareholders and expect to be incontact with Elliott shortly,” aspokesperson for Saga said.
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City of London update
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Cutting out single-use plastic waste
Green Flag, Green Heritage15 of the City Corporation’s openspaces have won the prestigious GreenFlag Award, recognising them as someof the very best managed open spacesin the world.
The international award, run by theenvironmental charity Keep Britain Tidy,is now into its third decade. It rewardswell managed parks and green spaces,setting the benchmark standard for themanagement of recreational outdoorspaces across the UK and the world.
Of the City Corporation’s 15 sites, 13
have also received the Green HeritageAward in recognition of their historicfeatures and high standard ofconservation.
HE City of London Corporationwill be eradicating unnecessarysingle-use plastic waste at
Guildhall and The Mansion House bySpring 2020, and across the entireorganisation by 2021.
It will bring in new staff procurementrules and work with its contractors to rollout the policy across its supply chain, toreduce its environmental impact.
Unnecessary multi-use plastic waste -like plastic folders and wrapping - willalso be eliminated, and other non-plastic products such as paper towels,will be minimised.
The City Corporation is also leading thePlastic Free City initiative – a rallyingcall to businesses and individuals toreduce and eliminate single-use plasticsacross the Square Mile.
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ALEXANDRA ROGERS
@city_amrogersTRANSPORT secretary Chris Graylinghas said he personally wanted to fightEurotunnel’s legal challenge againstthe government’s no-deal Brexit ferrystrategy in court but that Cabinet col-lectively decided to settle it.
In what was most likely his lastappearance before the TransportSelect Committee, Grayling yesterdaysaid Cabinet had decided it couldnot jeopardise the supply ofgoods to the NHS, which waswhy it had sought extra ferrycapacity in the event of a no-deal Brexit.
“It is a matter of great regretto me that an organisation thathas been excluded by theCompetition and MarketsAuthority for running a ferryoperation took us to courton the basis that itshould have been invit-
Grayling wantedto challenge ferrystrategy in court
ed to run a ferry operation,” he said.“However, government collectively
decided that although we would haveliked to fight that case in court, wecollectively decided we could not jeop-ardise the supply of goods to the NHSwhich is why we settled.”
Grayling faced a barrage of criticismfor handing contracts to three ferryfirms – including a £13.8m contract toSeaborne Freight, which owned noships and had never run a ferry service
before – and later cancelling them,at a cost of about £50m to the taxpayer.
After the contract awardEurotunnel, which had arguedthat the procurement processhad been “secretive”, launched
legal action, before settling withthe government for the £33m.
Grayling later faced calls toresign.
Daily Mirror parent Reach joins raceto buy the i paper owner JPI MediaALEX DANIEL
@alexmdanielREACH, the owner of the Daily Mirrorand Daily Express, is said to havethrown its hat into the ring to buy JPIMedia, which owns the i newspaper.
The firm, formerly known asTrinity Mirror, has reportedly madean indicative offer for the company,which owns hundreds of regionaltitles.
JPI Media was formed last year tobuy out Johnston Press, which wastaken over by creditors.
Reach is said to be interested inbuying most of the media titan,according to Sky News. It has alreadybought out the Express and Starnewspapers and magazine OK.
The firm reported that profits roseto £145.6m last year, up from£124.7m.
If the takeover goes ahead, the
new company would hold regionalnewspapers including the Scotsman,Manchester Evening News, theYorkshire Post and the Daily Record.
Read chief executive Simon Foxsaid in the firm’s most recentannual report that it would“continue to consider merger andacquisition opportunities whichwould accelerate our strategy wherethe financial case meets ourrequirements”.
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CITYAM.COM10 THURSDAY 18 JULY 2019NEWS
AUGUST GRAHAM
@AugustGrahamANGLO-AUSTRALIAN miner BHP sawiron ore output rebound in the fourthquarter of the year, and forecast evenhigher production going forward.
Iron ore production hit 63m tonnesin the three months to June, a 12 percent increase on the quarter before.
It helped the firm avoid a drop inoutput for the financial year,unchanged at 238m tonnes.
Meanwhile, production of metallur-gical coal rose 20 per cent in the quarter. Energy coal grew by 10 percent, and copper production was upsix per cent.
However the quarterly figures hidworse annual performance, withpetroleum the only product to showgrowth.
It came as bad weather hit the com-pany, including a cyclone in Australiaduring the third quarter.
Chief executive Andrew Mackenzie
BHP iron outputrebounds afterstormy quarter
Fresnillo falls as London minerslashes its production guidanceAUGUST GRAHAM
@AugustGrahamSHARES in miner Fresnillo fell as thefirm lowered production guidancefor the year yesterday, followingdelays and poor quality ore.
The company said that productionof silver in the second quarter hit14.4m ounces, down six per cent.
Meanwhile, gold production fell5.4 per cent and zinc by 6.2 per cent.
Chief executive Octavio Alvidrezsaid that a lower grade of ore at itseponymous Fresnillo mine hadimpacted production.
“We expected 2019 to bechallenging and we remaincautious,” Alvidrez said.
Shares fell around 2.8 per cent.
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also blamed a lower grade of ore, andfields that were becoming depleted.
“We finished the 2019 financial yearwith an 11 per cent increase in quar-terly production, driven by strongoperational performances across ourportfolio, including annual produc-tion records at a number of our petroleum, copper, iron ore and met-allurgical coal operations,” he said.
Shares were largely flat on the news,rising around a quarter of a per cent.
Helal Miah, an analyst at the ShareCentre, said that BHP and fellow listedminer Rio Tinto are well positioned. Itcame after a mining dam burst inBrazil, hitting the world’s largest ironproducer, Vale, and driving up prices.
“For both [BHP and Rio] iron ore is amajor part of their business and theyare both beneficiaries of the supplyconstraints that have emerged afterthe tragic dam collapse in Brazil.
“Iron prices have risen sharply andare reaching levels not seen since2013,” he said.
Acacia told tostop using sitefor mine wasteAUGUST GRAHAM
@AugustGrahamTHE GOVERNMENT of Tanzania hasordered Acacia Mining to stopusing a mining waste facility at oneof its gold mines, as a tax disputebetween the two drags on.
Authorities shut down thefacility after finding seepagecoming from the site.
Acacia had failed to “contain andprevent” the leak, officials claimed.
The firm said it had reached outto the government to ask forclarification before the ban comesinto force on Saturday morning.
It comes after years of stalematein a tax dispute.
The government claims theLondon-listed gold miner owes it$190bn (£153bn) in back taxes.
It has slapped Acacia with a banon exporting a gold-bearing orefrom a mine in the country.
An international arbitrationprocedure, brought by the miner,was set to start in the latter half ofthis month. But Acacia revealedthat it will suspend proceedingsuntil a takeover bid from BarrickGold, which is expected tomorrow.Barrick has said it is the only wayto solve the impasse.
GOOGLE yesterday dealt a blow to controversial second-hand ticketing companyViagogo by suspending its website as an advertiser. It follows criticism of the firm forallegedly breaking consumer law and facilitating ticket scalpers.
VIA-NO-GO Second-hand ticket websiteViagogo gets banned from Google adverts
11THURSDAY 18 JULY 2019 NEWSCITYAM.COM
JOE CURTIS
@joe_r_curtisPREMIER Oil cut 2019 operating costsand trimmed its debt pile in the firsthalf of 2019, it told shareholders yesterday.
The London-listed firm cut net debtfrom $2.33bn at the end of 2018 to$2.15bn (£1.73bn) in the first half of2019, to stay on track to cut full-yeardebt by over $300m.
Forecasting a cut in 2019 operatingcosts from $13 per barrel to $12 perbarrel, Premier Oil averaged produc-tion of 84,100 barrels per day in thefirst half of 2019.
That represents an 11 per cent riseon the same period last year, leavingthe company well prepared to hit itstarget of up to 80,000 barrels a day.
Premier’s UK assets contributed57,700 barrels per day over the first sixmonths, with the Catcher field pro-ducing 34,800 barrels per day.
Premier Oil piled on debt as it devel-
Premier Oil cutsdebt pile amidproduction gain
UK revenue slumps at Ladbrokesowner GVC as £2 limit takes tollSEBASTIAN MCCARTHY
@SebMcCarthyGAMBLING operator GVCHoldings suffered a double-digitslump in its UK retail sales duringthe first half of 2019, blaming arecently introduced £2 limit on fixed-odds betting terminals.
The Ladbrokes and Coral owner
reported a 10 per cent fall in like-for-like retail net gaming revenue(NGR) in its UK market, driven bya sharp drop in the second
quarter of the year.Yet in spite of tough comparatives
against last year, when the footballWorld Cup spurred betting, thebookmaker enjoyed a 17 per centgrowth in its online NGR.
oped the Catcher field area in thewake of 2014’s oil price crash.
Chief executive Tony Durrant said:“We have delivered a strong first half.I am particularly pleased with thecontinued high operating efficiencyfrom our producing portfolio, whichhas enabled us to reduce our debt by$180m.
“This puts us in good stead to meetour debt reduction target for the fullyear, which remains a top priority forthe group.”
@SebMcCarthyTHE UK’s biggest seller of Rolexesenjoyed a surge in appetite forluxury watches over the last 12months, it revealed yesterday in itsfirst financial results since floatingon the London Stock Exchange.
Watches of Switzerland, whichbegan life as a listed firm in theCity less than two months ago,reported a 22.5 per cent rise ingroup revenue to £773.5m duringthe year to 28 April 2019.
Buoyed by a 28 per cent rise insales for luxury watches to £631m,the firm posted double-digit risesin like-for-like revenue in both itscore UK and US markets.
Operating profit climbed 21.6per cent compared with theprevious 12 months, hitting£45.5m, while pre-tax profit rose181 per cent to £20.1m.
Boss Brian Duffy described thepast 12 months as “a fantasticyear”, saying he was “delighted thatthe group’s five-yeartransformation has culminated in asuccessful [listing]”.
Shares in the business, which wasfounded just over a century ago inLudgate Hill, closed up 3p at 293p.
PREMIER OIL
17 Jul
78.3078
81
P
79
82
17 Jul12 Jul11 Jul 15 Jul 16 Jul
80
1.02%
SWEET SPOT Taste for innovation opensup a fresh tray of delights at Hotel Chocolat
HOTEL Chocolat chiefexecutive Angus Thirlwell(right) hailed “relentless”innovation for a 14pc rise inrevenue to £132m for theyear to the end of June.Profits are expected to hitexpectations. Thirlwellhailed a home hotchocolate system and arewards scheme.
CITYAM.COM12 THURSDAY 18 JULY 2019NEWS
JAMES WARRINGTON
@j_a_warringtonERICSSON has posted second-quarterprofit in line with expectations andsaid it was on track for the full year asit looks to expand its 5G rollout.
The Swedish telecoms firm posted a10 per cent rise in net sales to 54.8bnSwedish kronor (£4.7bn), while operat-ing profit grew to 3.7bn kronor, upfrom 0.2bn the year before.
Ericsson, which is one of the mainsuppliers of equipment for 5G along-side Huawei and Nokia, said it expectsto meet its targets for 2020.
Some analysts had expected Ericssonto upgrade its targets for the full yearafter the firm posted a string of strongquarterly results, boosted by rising 5Gdemand.
“We see strong momentum in our 5G business with both new con-tracts and new commercial launchesas well as live networks,” said presi-dent and chief executive BorjeEkholm.
“To date, we have provided solutionsfor almost two-thirds of all commer-cially launched 5G networks.”
Ericsson said its deployment of 5Gnetworks in part of Asia would impact
Ericsson makesright connectionon profit target
Hear and now: a cost-cutting programme has paid off at the Aim-listed company
JAMES WARRINGTON
@j_a_warringtonAUDIOBOOM posted a huge rise inrevenue in the first six months of theyear as it continues to cash in onadvertising in the lucrative podcastmarket.
The Aim-listed company reportedfirst-half revenue of $9.8m (£7.9m),against the $3.6m posted in thesame period last year.
Audioboom, which hosts podcastsfrom celebrities including JonathanRoss and Heston Blumenthal, also
slashed its overall loss by almost 50per cent to $2.8m following a cost-cutting plan.
Audioboom said its first-halfgrowth outstripped the widermarket, as it grew its roster ofadvertisers.
“Considering the potentialmarketplace we are creating, with arecord 135m individuals listening toat least one Audioboom podcast inJune, this global reach presentsmany possibilities within the globaldigital marketplace,” said chiefexecutive Rob Proctor.
margins negatively in the short term,but said it would pay off in the longterm.
The company could be set to benefitfrom a crackdown on rival Huawei,which is facing a ban in the US overspying fears.
Niklas Heuveldop, Ericsson’s NorthAmerica chief executive, has warnedthat the UK’s plan to ban Huawei fromparts of its 5G network made littletechnical sense.
He argued that the Chinesecompany should not be excluded from5G networks, and said uncertaintyover its role was harming confidencein the industry.
Ericsson has pledged to deliver anoperating margin, excluding restruc-turing costs, of more than 10 per centin 2020.
Overall, its gross margin rose to 36.6per cent from 34.8 per cent a year ago.Excluding restructuring charges, themargin fell to 36.7 per cent from 38.5per cent.
In North America, continued 4G and5G investments by all majorcustomers lifted sales, while deliveriesof next generation equipment inSouth Korea and 4G deployment inmainland China boosted business.
JAMES WARRINGTON
@j_a_warringtonBROADBAND provider Talktalkyesterday said its first-quarter tradingwas in line with expectations, asgrowing demand for high-speedinternet boosted sales.
The telecoms firm posted a 1.3 percent rise in revenue to £387m in thethree months to the end of June, andsaid its full-year guidance remainsunchanged.
Talktalk said the figures were
boosted by insatiable demand forfull-fibre broadband, with up to 75per cent of new customers nowchoosing the high-speed network.
The increased takeup of moreexpensive broadband also pushed upaverage customer spend, which grewto £24.72 in the quarter. Shares inTalktalk rose three per centfollowing the announcement.
Talktalk has been rocked by poorfeedback over customer service,ranking at the bottom of an Ofcomreport earlier this year.
This has been compounded by thefallout from a 2015 data breach,which led to the theft of personaldata from more than 150,000customers. In May the firm admittedthat it had failed to notify almost5,000 customers affected by thecyber attack.
However, Talktalk will be hopingits efforts to speed up its fibrebroadband network will win overcustomers looking for faster, morereliable internet connections amidthe rise of video-streaming services.
Talktalk holds guidance as full-fibredemand booms on the Netflix effect
EMILY NICOLLE
@emilyjnicolleGERMAN fintech starlet N26 hasupped its valuation to $3.5bn(£2.8bn), after extending its series Dfunding round to raise another$160m.
The digital banking app has nowraised a total of $470m in the round,which included investors such asInsight Venture Partners, Singapore’s
sovereign wealth fund GIC, Tencent,Allianz X, Peter Thiel’s ValarVentures, Earlybird Venture Capital,and Greyhound Capital. To date, N26has raised more than $670m.
“This will allow us to accelerate ourglobal expansion. The furtherincrease in valuation is a greattestament to the company’sdevelopment over the last months,”said N26 co-founder MaximilianTayenthal.
The startup said it will use thefunds to accelerate its expansion inEurope and the US, with plans tolaunch in Brazil soon.
The firm launched across the pondonly last week, and now has morethan 1,300 employees globally.
N26 recently began a widespreadmarketing campaign across the Tubenetwork in London, and this weekrelaunched its premium offering N26You to its 3.5m users.
Digital bank N26 valued at $3.5bnas it adds $160m onto its series D
Audioboom gains from soundplatform for podcast advertisers
Talktalk said services such as Amazon Prime and Netflix have helped boost sales
@emilyjnicolleBUSINESS travel startup Travelperkhas today raised a $60m (£48.2m)extension to its series C round,taking the total amount raised atthis stage to $104m.
Existing investors Kinnevik,partners of DST Global, TargetGlobal, Felix Capital, Sunstone andLocalglobe all participated.
Barcelona-based Travelperk saidit will use the funding to accelerateproduct development.
Monzo and Revolut-rival N26 has raisedmore than $670mfrom investors to date
Legal contract AIcompany toasts$55m fundraiseALEX DANIEL
@alexmdanielINSIGHT Partners, a backer ofDarktrace, Shopify and Hello Fresh,has led a $55m (£44.2m) investmentround in an AI-powered legalcontract management platformContract Pod AI. The fundraise isEurope’s largest legaltech series Binvestment.
Contract Pod uses AI to“streamline the time-consumingcontract process” for legal teams.
ACCA
TORY members are electingtheir new leader and thenext Prime Minister. BorisJohnson or Jeremy Hunt’spremiership will be domi-
nated by a few issues – solving theBrexit deadlock in parliament,funding public services, and heal-ing the country’s divides.
But while it hasn’t featured asprominently as the European issue,infrastructure is of key strategic im-portance to the UK economy. It is amajor employer and driver of eco-nomic growth.
No one would deny that the chal-lenge successive governments havefaced in delivering significant infra-structure projects in the UK –whether Heathrow’s third runway,HS2, Crossrail, or the A9 road con-
necting Falkirk to Thurso, Perth toInverness. Complex project and costmanagement is clearly required ininfrastructure.
Clear, consistent and effective de-cision-making is critical throughoutthe process as the projects are se-lected, financed and built to pro-vide taxpayer value for money.
MIND THE GAPThe term “infrastructure gap”means the difference between theinfrastructure investment needed,and the resources made available toaddress that need.
This global infrastructure invest-ment gap is set to grow to $14 trillion by 2040, and meetingthis challenge as a nation requiresa vision from the next governmentabout closing this gap by buildingnew projects and maintaining exist-ing ones.
Although there are many obstacles
ing at the potential of existing infra-structure, and on the performanceof past projects.
Another solution could be to pub-lish an annual assets and facilitiesreport, which includes detailed evi-dence on the backlog of mainte-nance of existing assets.
FINDING FINANCE The second barrier we identified wasaround the lack of finance and fund-ing – specifically when accounting forhigher costs of private capital.
To close this finance gap in the UK, the next governmentshould consider innovative revenuefunding schemes, such as value cap-ture, which recovers some of thevalue that public infrastructuregenerates for private landowners.
The next government also needs toalign long-term infrastructure planswith the annual budget process tominimise the use of more expensive private finance.
WHISTLE-BLOWINGThe third and final barrier concernsplanning and regulatory issues, forexample where governments fail tomonitor and use proper oversight indelivering infrastructure projects.
To guard against this, the nextPrime Minister should prioritise
professionalising the UK FinanceFunction, while also bringing for-ward whistle-blowing legislation togive public servants the support re-quired to challenge unethical behav-iour which can end up derailinginfrastructure projects.
LIFE CYCLEOur report also demonstrates howbringing accountants to the centreof infrastructure decision-makingwill improve the selection, financ-ing, and delivery of projects.
The accountant’s unique skills, ex-perience, and perspective can meanthe difference between success andfailure in these projects.
Let’s bring them in across the en-tire life cycle, and as a critical mem-ber of the professional team.
We face the major challenges ofadapting to changing climates anddemographics, while also needingto respond effectively to increasedcyber threats.
The next Prime Minister’s atten-tion may well be dominated byBrexit, but each of these trends to-gether means our country needsquality infrastructure, and muchmore of it.
£Helen Brand OBE is the chiefexecutive of ACCA.
HelenBrand
The accountant’sperspective
and experiencecan mean the
differencebetween success
and failure
13THURSDAY 18 JULY 2019 FEATURECITYAM.COM
OUR NEXT PRIME MINISTERSHOULD...
We need a leaderwho recogniseshow crucialinfrastructureprojects are to the economy
to making sure that these infrastruc-ture needs are being met, the biggestbarrier that ACCA and our researchpartner CPA Canada identified in ajoint report this year was a lack ofpolitical leadership.
WHERE HAVE ALL THELEADERS GONE?The research found that a lack of po-litical leadership can often manifestin the prioritisation of new –preferably high-profile – projects,over the necessary maintenance ofexisting public assets.
To help mitigate this bias, the gov-ernment should collect data look-
CITYAM.COM14 THURSDAY 18 JULY 2019NEWS
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@alexmdanielWATER giant Severn Trent shares fellslightly yesterday after it said it hadmade a “good start” to its financialyear.
The London-listed company said it ison course to hit its annual targets in afirst-quarter trading update.
In a trading update for the period 1April to 17 July Severn Trent said itwas on track to deliver at least £25min customer outperformance pay-ments this year.
It said customers had experiencedcontinued improvement in the areasthat “matter most to them”.
The statement follows a warningfrom the Environment Agency (EA) toclean up its act last year, after thewatchdog described its performanceas “simply unacceptable”.
An EA report in 2018 showed onlyone of the major water firms inEngland was performing at the levelexpected. Severn Trent’s rating fellfrom four to three stars.
“Overall, we have made a good startto the financial year and there has
Severn Trent ‘oncourse’ to meetfinancial targets
been no material change to currentyear business performance or outlooksince the full-year 2018-19 results pres-entation on 21 May,” Severn Trentsaid. “The board continues to expectthat the group will deliver full-yeartrading performance in-line with itsexpectations and prior guidance.”
The FTSE 100 firm held its annualshareholder meeting yesterday, whichcould be the last for outgoing chair-man Andrew Duff.
Duff announced he would retire inMay, after nine years at the helm.However, he said he would serve untila successor had been brought in. Duffwas reelected by 98.5 per cent of share-holders yesterday.
The departure comes as thecompany implements its newbusiness plan after being awarded fasttrack status by Britain’s waterindustry regulator Ofwat.
Ofwat said earlier this year it hadagreed bill reductions of between fiveper cent and 15 per cent with three ofthe country’s leading utility compa-nies, including Severn Trent, whichsuppliers water across the Midlandsregion.
Setback for Ryanair as UK pilotspoised for ballot on strike actionCONOR HUMPHRIES
RYANAIR’s British pilot union is toballot members on possible strikeaction over working conditions, theBritish Airline Pilots Association(Balpa) announced yesterday.
The results are due on 7 Augustand action by pilots in the airline’slargest market could take place twoweeks later, the union told membersin a memo seen by Reuters.
The ballot is a setback formanagement at Europe’s largest low-cost carrier, who recently said they
had largely resolved a dispute withpilots and cabin crew.
Ryanair suff ered damaging strikeslast year after it bowed to pressure inlate 2017 to recognise unions for thefirst time. Balpa general secretaryBrian Strutton said no progress hadbeen made on issues includingpensions, maternity benefits and “afair, transparent, and consistent paystructure”. Ryanair, which says itoffers some of the best conditions forlow-cost short-haul Boeing pilots inEurope, did not immediately respondto a request for comment.
@j_a_warringtonINDIAN fashion retailerKoovs said it is on track for areturn to growth in 2020, despite adecline in sales over 12 months.
The London-listed firm posted netsales of £7.5m in 2019, down from£9.6m the previous year, whilerevenue was flat at £6.4m. Shares inKoovs fell eight per cent, but the
company said the business is well-placed to return to growth next year.
The online retailer, which offerswestern fashion for Indianconsumers, said its recovery at theend of the last financial year hascontinued, with gross order value up104 per cent in the first quarter.
Koovs, which is led by Labour peerand former Asos chair Lord WaheedAlli, also increased its tradingmargin to 18 per cent, and has seen
web traffic grow to 75.9m.“Koovs is firmly back on track,
evidenced by the 104 per centgrowth experienced in first-quartertrading,” said Alli. “We are excitedabout the rest of the year, as wecontinue to invest in both marketingand our product range.”
Earlier this year the Aim-listed firmsecured an investment deal withFuture Lifestyle Fashions, a subsidiaryof India’s largest retail group.
The online retailer offers western fashion for Indian consumers
8.12%
Reuters
15THURSDAY 18 JULY 2019 MARKETSCITYAM.COM
LONDON REPORT BEST OF THEBROKERS
THE FTSE 100 index tumbledyesterday amid sharp falls inoil majors as investors pricedin an overnight slide in crudeto one-week lows, while
downbeat trading updates knockedchemicals group Johnson Matthey andminer Fresnillo.
Shell and BP slipped 1.5 per cent and2.9 per cent respectively and were thebiggest drags on the blue-chip index,pulling the FTSE 100 0.6 per cent lowereven as global oil prices recoveredsome ground. The midcaps dipped 0.2per cent.
Johnson Matthey skidded 5.4 percent, its biggest one-day fall in nearlyfour years, to the bottom of the mainindex after it said profit at its CleanAir business, which provides the lion’sshare of earnings, would fall this year.
Oil majors leadFTSE 100 lower asprice fears bite
FTSE
7,450
7,500
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7,535.46
Undershooting analyst expectations is never a good idea if you want them to talkup your shares, as yesterday’s note on Hays from Liberum proves. Net fee incomewas flat, versus an expected three per cent rise, causing analysts to cut the targetprice by 10p to 185p. However it’s not all bad news as the rating remains “buy”.
HAYS
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Purplebricks’ plan to Purplebrexit from the US and Australia has been welcomedby leave supporters at UBS. Analysts said that US losses had caused them to ratethe firm as “sell”. As long as remainers don’t hijack the plans, the withdrawalagreement should be positive. UBS upgrades to “neutral” and a 110p target price.
To appear in Best of the Brokers, email your research to [email protected]
PURPLEBRICKS
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CITY MOVES WHO’S SWITCHING JOBSFOUNDRYFoundry, which developscreative software for the digitaldesign, media andentertainment industries, hasappointedJody Madden aschief executive officer (CEO).She joined Foundry in 2013and has held positions as chiefoperating officer and mostrecently, chief customer officerand chief product officer. Priorto joining Foundry, Jody spent more than a decade intechnology management and studio leadership rolesat Industrial Light & Magic, Lucasfilm, and Digital
Domain after graduating from Stanford University.Jody said: “I’m thrilled to be taking on the CEO role atthis unique time in our company’s history. Over theyears I have worked at Foundry, I have seen theamazing things the talented people in our businesscan do, and I continue to be inspired by the imagescreated by our customers.” The former CEO, CraigRodgerson, added: “Jody is well equipped to leadFoundry’s ongoing strategic direction from her roleswithin the business already.” Simon Robinson, co-founder and chief scientist, added: “Jody is wellknown for her collaborative leadership style and thishas been crucial in enabling our engineering, productand research teams to achieve results for ourcustomers and build the foundation for the future.”
CALLSIGNCallsign, a London-based company at the forefront ofthe identity, authentication and authorisationrevolution, has announced the appointment of IanCruxton as the inaugural chief security officer (CSO).Ian moves from his position as director of internationaloperations at the National Crime Agency (NCA). AsCallsign continues to expand its customer base,particularly in the financial services sector, Ian hasbeen brought in to support both the security of thebusiness and its clients. During his time at the NCA, Ianwas director of the organised crime command, briefingthe Home Secretary on the changing nature of threatand the operational response. For the past two yearsIan led the NCA’s international operations.
SAGASaga, the UK specialist in products and services for lifeafter 50, has announced the appointment of JaneStorm as chief people officer with effect from 1October. Jane has 25 years’ experience in humanresources and is currently chief people officer atConnect Group, the UK specialist distributor operatingin newspaper and magazine wholesaling. Herexperience includes advising businesses on becomingmore customer centric and digital in their operationalfocus and outlook. She spent 19 years at Tesco, joiningin 1998 and rising to group HR director – capability.Lance Batchelor, chief executive, said: “Her extensivehuman resources experience will be invaluable at thispivotal moment in our business.”
To appear in CITYMOVES please email your career updates and pictures to [email protected]
NEW YORK REPORT
Trade war fearhurts US stocksUS STOCK indexes fell yesterday
as weak results from CSXstoked concerns that the
protracted trade war between theUnited States and China could hurtcorporate earnings.
CSX shares tumbled 10.3 per centafter the rail freight company postedlower-than-expected quarterly profitand cut its full-year revenue forecast.CSX was one of the biggest drags onthe S&P 500 index, along with UnionPacific and Berkshire Hathaway,which owns BNSF Railway.
The Dow Jones Industrial Averagefell 115.78 points, or 0.42 per cent, to27,219.85, the S&P 500 lost 19.62points, or 0.65 per cent, to 2,984.42and the Nasdaq Composite dropped37.59 points, or 0.46 per cent, to8,185.21.
Bank of America rose 0.7 per centafter posting a profit beat, though thecompany lowered its annual netinterest income forecast.
Netflix shares fell in aftermarkettrade after quarterly results. Theywere last down nearly 11 per cent.Abbott Laboratories rose 3.1 percent after the medical device makertopped quarterly profit estimates.
CITYDASHBOARD YOUR ONE-STOP SHOP FOR BROKER VIEWS AND MARKET REPORTS
NEWS
JOE CURTIS
@joe_r_curtisEUROPEAN car sales slumped 7.8 percent last month as Nissan, FiatChrysler and Volvo suffered majorrevenue losses.
Registrations dropped to 1.45munits in June, according to theAssociation of European Carmakers(AEC), the worst decline sinceDecember. The AEC blamed two fewerworking days compared with 2018.
Major EU car markets all reporteddeclines, with France’s minus 8.4 percent and Spain’s 8.3 per cent drop theworst of them all.
The UK posted a 4.9 per cent fall to223,400 car sales. Germany saw salesdrop 4.7 per cent to 325,200.
While the AEC blamed June’s dropon fewer working days, the industry’sweak performance saw sales acrossthe first half of 2019 fall 3.1 per centcompared to the same period of 2018.
Nissan’s sales have plunged 25.6 percent in June to just 34,000 cars, whileVolvo dropped 22 per cent to sell28,200 units. Fiat Chrysler’s sales sankalmost 14 per cent and Honda saw adrop of 15.4 per cent.
It follows a profit warning last weekfrom Mercedes-Benz maker Daimler,which spoke of rising recall costs and
allegations of emissions-tampering ondiesel engines. Meanwhile BMW fellto its first automotive loss in 10 yearsin May.
The car industry is also undergoingseismic change as a sector-widetransition to electric vehicles andbatteries is hampered by falling sales.
Weakening Asian demand amid theUS-China trade war as well as thegrowing unpopularity of diesel areboth factors behind the turmoil.
Car makers are pouring $300bn(£241bn) into electric cars over thenext decade, while Jaguar Land Roverhas vowed to invest almost £1bn intobuilding electric vehicles in the UK.
European car sales hit the brakes asmanufacturers suffer a steep drop
Watchdog pulls the plugon Dyson’s fan advertJOE CURTIS
@joe_r_curtisA DYSON advert for a cordless fan wasa lot of hot air, the UK’s advertisingregulator has ruled.
The Advertising Standards Authority(ASA) yesterday banned Dyson’s ad forthe Pure Hot + Cool Fan, saying viewerscould be misled about the need to plugthe fan in.
The advert, screened in April, showedthe fan inside the kitchen of an open-plan flat from various angles, none ofwhich featured a power cord until thefinal shot.
Even then the cord “was very thin
and coloured grey on a light back-ground”, leading the ASA to believe “itcould be easily missed”.
“The cord was the same colour, thick-ness and approximately the samelength as the edge of the carpet whichappeared opposite it on the screen,” itsaid. “For those reasons, we consideredthat it could be easily missed and seenas part of the background by viewers.”
Dyson argued that there was not“any reasonable prospect” of viewersending up believing that the fan wascordless.
The British tech giant, famous for itshousehold appliances, said that allhome fans have a power cable.
Fresnillo slid 2.8 per cent after it cutits annual production targets, citinglower-than-expected ore grades. Thefalls across oil stocks, banks and min-ers more than offset gains forexporters like Imperial Brands andDiageo, which benefitted from thepound’s slide to a two-year low again.
Join City AM and ThinkMarkets to get the inside track on trading from leading financial experts and analysts, CEOsand personalities from the financial arena. Plus a special discussion with boxer AMIR KHAN on his secrets to success
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17THURSDAY 18 JULY 2019 FEATURECITYAM.COM
OFFICE POLITICS
IT IS the stuff of nightmares. Stand-ing in front of your peers, col-leagues and managers, words thatyou’ve prepped for weeks ren-dered to a mere whisper.
It’s incredible the number of seniorprofessionals, business owners, chiefexecutives and managers – highly in-telligent, articulate, funny and aboveall inspiring people – who hate theidea of public speaking.
Why is this the case? Is it becausemany professionals are afraid of beingseen to fail?
If so, this is a shame, because leadersneed to be honest. We all love successstories, new client wins, triumph inthe face of adversity, and so on. But sto-ries about your failures can providemore insight than your success.
Not only are you acknowledgingthat, yes, things haven’t gone so well,but you’re creating a supportive cul-ture where success and failure aretreated in equal measure, where hon-est conversations can take place to fos-ter deep learning which can beapplied to future projects.
In any case, this fear is odd becausewe spend our entire lives speakingpublicly. In nursery, we share what wedid at the weekend. In primaryschool, we have “show and tell”.
If the thought of talking in front of strangersmakes your blood run cold, this may help
Public speaking – not so scary after all?
We must take themanufacturedpressure offpublic speaking
When we are young, public speakingis framed as sharing, explaining, andtelling stories that are close to us. Thecomfortable environment we speak inensures that it doesn’t feel like a terri-ble moment under the spotlight, but achance to communicate with peers.
Yet by the time we head off to uni-versity, public speaking undergoes anincredible shift of formalisation. Sud-denly it counts for 20 per cent of ourgrade, and we have to speak in frontof strangers and a ticking clock. Ourpalms are sweaty, the week leading upto the event is filled with sleeplessnights, and we are debating our es-cape routes.
This demon doesn’t leave us whenwe enter the workplace. Instead ofbeing judged by equals, we’re nowsurrounded by giants.
But it doesn’t have to be like this. Sohow do we fix it?
There isn’t a silver bullet – the onlyway to become more confident atpublic speaking is to practise.
This isn’t an excuse to stand in frontof the mirror. Instead it means speak-ing to real people and – crucially – re-ceiving honest feedback.
The key to a great talk lies in thecontent. If you are knowledgeableabout your subject matter and have aclear idea about where you want theideas to go, then speaking about itcan be straightforward. It is the envi-ronmental factors that induce fear.
Whether we talk to our friends
about Game of Thrones or speak tocolleagues about a client we know in-side out, the atmosphere should betreated the same. Both are an oppor-tunity to air ideas, share expandedthoughts, and offer a renewed way ofthinking to our audience.
What about encouraging others tospeak? Even if you’re a confident per-son who can own the room, your officemay be full of introverts who prefer tosit in the background. But ignoringthem stifles creativity, productivityand professional development.
As a manager, it’s your job to bringthem into the conversation, give themthe confidence to express their ideas,and enable an open honest dialogue.
A classic way to do this is to ask ques-tions without providing definitive an-swers. Use breakout sessions toinvolve the entire team and allowthem to have their voices heard. En-courage team leaders to step back andlet their talented colleagues flourish.
Public speaking is not only incredi-bly powerful, but natural, too. From ayoung age, we are all orators. In orderfor this to continue, we must take themanufactured pressure off publicspeaking, lower the pedestal we haveplaced it on, and go back to the basics.
It seems we have a lot to learn from“show and tell”.
£Nick Gold is incoming president of theInternational Association of Speaker Bureausand managing director of Speakers Corner.
ER, WHAT DO ISOUND LIKE?
Speeko Free
Uh, so, aproblem peoplehave when, like,speaking inpublic is usingtoo many, um,filler words. Thisapp coaches youto be a betterpublic speakerby recordingyour voice andprovidingfeedback onyour pace,eloquence, andarticulation –as well astracking howmany of those,er, filler wordsyou are using.
Nick Gold
CITYAM.COM18 THURSDAY 18 JULY 2019OPINION
EDITED BY RACHEL CUNLIFFE
[Re: Was Sadiq Khan right to rejectplans for the Tulip tower?]The mayor’s decision to nip the Tulip inthe bud is a particularly interesting one. Itstiming is no coincidence, coming just daysafter the launch of architectsdeclare.comand structuralengineersdeclare.com.
Through these platforms, designers ofbuilt environment professions have signedup to a commitment to avoid the harmfulenvironmental effects which might occurthrough inappropriate design of buildings.
The leadership being shown by the RoyalInstitute of British Architects and theInstitution of Structural Engineers (IStructE)is enabling their respective professions topledge to design buildings with due regardfor our environment. I feel that this a crucialsetting for Khan’s decision.
As chair of IStructE’s Structural Awardsjudging panel, I can state unequivocallythat our expectations for the design of tallbuildings are heightened in the modernera towards a clear commitment forresource efficiency and societal benefit.Against this backdrop, some buildings,including the Tulip tower, will have larger-than-ever question marks over them.Professor Tim Ibell, University of Bath
After the fiasco of Boris Johnson’s GardenBridge, any mayor can be forgiven forbeing wary of large building projects inLondon. But I think it’s a shame that SadiqKhan has recommended that permissionto build the Tulip tower be refused.
The mayor had a lot of reasons for hisdecision, such as that the new towerwould harm the skyline. But it’s plannedfor right next to the Gherkin, and isn’t farfrom the Cheesegrater.
London is no longer a low-rise city, andwe can fight that or embrace it. Khan’sdecision looks like a failure of imagination,an exercise in small-mindedness. Cautious.Safe. Prudent. All those sexy adjectives.
Sometimes a leader should take risks,see a seed of greatness in a “grand prôjet”.Of course, there will be shrieks of protest.But isn’t it interesting that all the high-risebuildings in the City now have affectionatenicknames?Eliot Wilson, chief writer, Right Angles
LETTERSTO THE EDITOR
Spokesman for Jeremy Corbyn hitsback at “false” claims made by Labourpeers who signed Guardian advert onantisemitism. “Many have a publicrecord of opposition to JeremyCorbyn.” Adds reform of House ofLords is party policy and topic for nextmanifesto.@paulwaugh
Of all the reasons to reform the Houseof Lords, opposition to antisemitism isdefinitely the worst.@JAHeale
Theresa May is asked whether runningthrough a field of wheat is still thenaughtiest thing she has done?She replies: “The silliest thing I’ve everdone is answering that question”.@PippaCrerar
Ursula von der Leyen has scraped inby 9 votes. Power but no legitimacy.@Nigel_Farage
She got 52% of the vote@lisanandy
Tulipmania
BEST OFTWITTER
THIS week, we celebrate 50years since Apollo 11’s firstlanding of humans on themoon – one of humanity’sgreatest achievements.
The technologies born of theApollo missions shaped life onEarth in more ways than we oftenrecognise through inventions weuse every day.
This anniversary is about morethan where we’ve been – it’s aboutwhere we’re going. The next spacerace is well underway, with lunarlandings – that’s landings plural –planned for 2024 and beyond.
Like their predecessors, these mis-sions will revolutionise life back onEarth, and Britain is poised to playa major part. Already a £14.8bn do-mestic industry, and with manufac-turing across this sector rising by 27per cent in 2018, space is an increas-ingly important frontier for the UK,with opportunities in satellites andother key technologies.
Here are just a few of the manynew capabilities the next lunarlandings will bring.
AUTONOMOUS VEHICLES AND SYSTEMS With sustained human presence onthe moon this time around, we willneed more regular and frequentlunar missions for supply and trans-port of goods and people betweenEarth and the moon.
This will drive the development ofmore autonomous, reusable space-craft; making them more like anairliner than the single-use space-craft of today.
Furthermore, autonomous vehi-cles and systems working in coop-
The technologiesborn of the Apollomissions shaped lifein more ways thanwe often recognise
The next moon landings willspur giant leaps here on Earth
KaighamGabriel
eration with humans – for exam-ple, in moon mining or habitatconstruction – will amplify humancapabilities and maximise theirsafety.
The technological advances devel-oped will also be put to work onEarth, helping to create the nextgeneration of autonomous vehiclesand systems for transport, manu-facturing, and smart cities.
SUSTAINABLE ENERGYPRODUCTION AND STORAGEThe constraints of the lunar envi-ronment mean that things we takefor granted on Earth, like electricalpower, need to be generated and de-livered in new ways.
Obviously, fossil fuels and windpower aren’t available, but withone lunar day lasting 14 Earth days,solar power is in abundant supply.
This offers us nearly unlimitedenergy, but with a need to developnew ways to store that energy dur-ing the equally long lunar night.
A range of other sustainablesources, such as waste-free nuclearenergy, will be explored as well,with the European Space Agencyplanning to mine on the moon forthis by 2025.
There are countless examplesfrom recent decades of technolo-gies developed through space ex-ploration that benefited usenormously here on Earth as well.
REMOTE MEDICINEMedical care for the humans livingand working on the moon willcome with unique logistical andcost challenges. Medical expertiseand treatments that would be
readily available on Earth simplyaren’t options.
As a result, progress needs to bemade in areas including on-demandproduction of medicine and robotic-assisted telemedicine and surgery.
These advances offer the potentialfor profound improvements to deliv-ering medicine on Earth – particu-larly to remote and developing areas.
SPACE TOURISMThe UK Space Agency is in goodcompany with Jeff Bezos’ Blue Ori-gin, Elon Musk’s Space X, and otherprivate sector firms by putting inplace the building blocks for send-
ing people into orbit.This could either be merely for
the sheer exhilarating experienceitself, or as part of a short trans-continental flight – think Londonto Australia in just 90 minutes.
The agency recently announced apledge of £22m for Europe’s firstspaceport to be built in Cornwall. Inpartnership with Richard Branson’sVirgin Galactic, it is aiming tolaunch sub-orbital flights in theearly 2020s.
LIFE ON MARS? An outpost on the moon supportsour goal of launching expeditionsto Mars or going even deeper intospace. Nasa’s proposed Lunar Gate-way creates the opportunity to testtools and even human habitats longbefore astronauts would travel far-ther into space.
Plus, it takes 25 to 30 times lessenergy and resources to reach Marsfrom the moon rather than fromthe Earth.
LOOKING TO THE HORIZONWhatever advances the next lunarmissions bring or do not bring, onething is clear: humans have an in-satiable drive to see what’s over thenext horizon.
That next horizon has been beck-oning for 50 years, and the spacerace currently underway offers thepromise to deliver even more giantleaps for mankind.
£Kaigham J. Gabriel is president andchief executive of Draper, an MIT spin-offengineering innovation organisationthat developed the Apollo guidancecomputer.
WHEN it comes to mak-ing sure that our day-to-day consumption isas environmentallyfriendly as possible,
where does responsibility lie? According to new KPMG research,
believe it or not, just 15 per cent ofconsumers point to policymakers,and only 10 per cent think thatthey themselves are responsible.
The majority – 53 per cent – thinkit’s the duty of the companies pro-ducing or manufacturing the prod-ucts in the first place.
In London specifically, consumersdid place more of this mammothburden on policymakers, withnearly a quarter (23 per cent) iden-tifying them as mainly responsiblefor ensuring that goods are sustain-able. But at 47 per cent, the focusstill remains on those producingthe products.
This isn’t because people are obliv-ious to the issue. On the contrary,two thirds of Brits said that they
cared more about the environmen-tal impact of the goods they usenow than they did five years ago.
Clearly the corporate world has towake up to the strength of feelingtowards sustainability.
Much of the noise we’re hearingfrom corporates at the moment fo-cuses on creating various environ-mentally friendly offerings. Buttoday’s consumers emphatically ex-pect businesses to embed sustain-ability across everything they do, sothat they as individuals no longerhave to worry that they mightmake the “wrong” choice.
The good news for business isthat, while consumers do mainlylook to manufacturers to take re-sponsibility, they aren’t under anyillusion that it will come withoutcost to themselves. Our researchfound that most would be willingto pay an average of 8.5 per centmore for products that are moreenvironmentally friendly.
Of course, a huge question mark
hangs over whether they would ac-tually vote with their feet andchoose to pay the premium they saythey will.
But in today’s Attenborough-in-spired commercial landscape, firmsdon’t really have much of a choice.
Since Blue Planet aired, calls for usall to be more conscious of our con-sumption have become unrelent-ing. At this very moment, peopleare protesting across the country,the government is setting toughnew targets on emissions after de-claring a state of emergency, and re-tailers are endeavouring to think ofnew ways they can innovate at the
point of sale. This isn’t a trend that businesses
can afford to ignore, regardless ofwhether they are consumer-facingor behind the scenes. The pressureis on, across all demographics.
Interesting, we found that it isthose under 24 and over 55 who aremost engaged in this fight to bemore environmentally friendly. Per-haps these generations are think-ing about the future they’ll bestepping into and the legacy they’llbe leaving behind.
It’s clear that the pressure on allstakeholders will only grow, espe-cially as the more engaged youngergeneration gains economic powerand as the impact of global warm-ing comes more sharply into focus.
The time for thinking and tokengestures is over. It’s now time forhard action and results.
£Dan Thomas is UK head of corporatesand Linda Ellett is UK head of consumermarkets at KPMG.
Who’s responsible? Why businesses muststep up and raise their sustainability game
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STUDENT debt is, once again,pledge fodder as politiciansjostle for power. Conservativeleadership hopeful JeremyHunt has promised to wipe
student debt for successful entrepre-neurs and reduce interest on loans,the Brexit Party has pledged to re-move and reimburse interest alto-gether, while Labour has long vowedto scrap tuition fees entirely.
It’s not hard to see where this senti-ment is coming from. Politicians of allparties have woken up to the fact thatsupport from the youngest membersof the electorate is crucial.
This is, in part, due to political ac-tivism over the climate crisis by en-gaged future voters, but the EUreferendum also saw away the stereo-type that the young don’t vote.
Post-referendum polling revealed a64 per cent turnout among 18-24 yearolds, not dissimilar to the turnoutsfor 25-39 year olds and 40-54 year olds.
But alas, while our politicians un-derstand the need to engage youngvoters, it seems that they view reduc-ing the cost of higher education asthe only way to win them over.
There is little doubt that the highereducation system needs overhauling,with more options for part-time andtechnical learning, a restructuring ofinterest rates on student debt, and thereintroduction of maintenance grants.
But young voters have more pressingconcerns than the cost of a degree.
A 2017 General Election Day poll byLord Ashcroft found that the singlemost important issue for young peo-ple was healthcare (27 per cent), fol-lowed by the future of Europe andBrexit (15 per cent), austerity, povertyand economic inequality (13 per cent)
and jobs (10 per cent).Why not student debt? First, unlike other forms of debt, stu-
dent loan repayments are calculatedon how much you earn, not how muchyou owe. Only the very highest earnerswill repay in full – in fact, the Institutefor Fiscal Studies estimates that 83 percent of graduates will never pay backthe total amount they borrowed.
Second, according to the Depart-ment for Education, 49.8 per cent ofpeople under the age of 30 have pur-sued higher education. While this fig-ure has risen significantly in the pastdecade, most under-30s have thingson their minds other than university.
Politicians are focusing on an issuethat is essentially irrelevant to half thedemographic, when there are otherpolicy areas that really do matter.
It is predicted that one in three mil-lennials will never own a home – amajor issue given that, according tothe Office for National Statistics, pri-
vate renters in England spent 34 percent of their gross household incomeon rent, compared to 18 per cent forhomeowners repaying mortgages.
If unsolved, this will be a crisis fur-ther down the line – the independentResolution Foundation think tank haswarned of huge increases in pen-sioner housing benefits should rent-ing continue into retirement formillennials under the current system.
And yet, overhauling the privaterented sector to make renting for lifea viable and affordable option neverseems to be a priority for politicians.
Or look at the gig economy. Thismodel of working could empower peo-ple with more flexible options and thechance for self-employment – crucialin a market where graduate unemploy-ment and under-employment is a realthreat. But issues abound: antisocialhours, a lack of employee benefits andrights, and irregular income from free-lance contracts that makes it hard tosave and plan for the future.
The government’s 2018 Good WorkPlan promised to tackle the “one-sidedflexibility” of many of zero-hours con-tracts and increase job security. ButBrexit and political turmoil have ham-pered the progress of turning theserecommendations into policy. Movingforward with them is more importantto most young people than tinkeringwith tuition fees.
Politicians from all parties should belooking at how to avoid crises thatwill affect this generation in the yearsto come, and stop underestimatingtheir intelligence by aiming to tickthe youth-vote-box with the obvious.
£Sophie Phillipson is founder of studentand graduate support site HelloGrads.
Sophie Phillipson
DEBATE
Keith Williams, chair of the Rail Review’sexpert challenge panel, is proposing theopposite of what is needed.
To get to grips with the chronicfragmentation and poor services on ourrailways, and to decarbonise, we needan overarching rail strategy, linked to awider national transport strategy.
Only the state can take this view, butwithout control of the levers, it’s hard tosee how rail and other public transportcan be truly integrated and givenstrategic direction.
This need not be the central state –the great growth in rail journeys hasbeen caused by commuting in and outof cities, so it makes sense for integratedtransport strategies to be regional.
And, as with other public services, the
state needs to be open to scrutiny,especially from those who use, work ordepend on railways.
Our railways should be in publichands, run for public good, and guidedand scrutinised by passengers, unionsand rail workers – not a bureaucrat orcompany shill, fat or otherwise.
£Andrew Pendleton is director ofpolicy and advocacy at the NewEconomics Foundation.
Would the railways run better withan independent ‘fat controller’ incharge, as recently proposed?Commuters are right to be angry withthe state of Britain’s railway network,with its unpalatable combination ofhigh fares, delays, and trains so packedthat one feels like a canned sardine.
We seem to be paying significantlymore each year for a deterioratingservice, with train punctuality at a 13-year low in 2018.
Understandably given this, there is agreat deal of sympathy for the railwaysto be renationalised. But this would bethe wrong solution to the problem.
Under nationalisation, rail fares riskbecoming a political weapon, frozenahead of General Elections and leavingtaxpayers to pick up the shortfall.Further, with government underpressure to spend money elsewhere,
rail investment risks being overlooked.Rather than nationalisation, what we
need is a much better regulated privateindustry. A new, independent “fatcontroller” figure, overseeing the railnetwork, should manage a tougherregime – doing more to holdunderperforming train operators toaccount and ensuring that fares are fair.
£Scott Corfe is research director at theSocial Market Foundation.
Young voters today care aboutfar more than just tuition fees
Politicians shouldstop aiming to tick the youth-vote-boxwith the obvious
SCOTT CORFE
YES
ANDREW PENDLETON
NO
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HAMMERS BREAK RECORDTO SIGN £45M HALLER£West Ham have broken theirtransfer record to sign £45m strikerSebastien Haller from EintrachtFrankfurt on a five-year contract. The25-year-old, who scored 20 goals in41 games for the German side lastseason, eclipses the £36m theHammers paid for Felipe Anderson.Meanwhile, Kieran Trippier yesterdaycompleted a £20m move fromTottenham to Atletico Madrid.
ENGLAND EASE INTO SEMI-FINALS WITH FIFTH WIN£England reached the semi-finalsof the Netball World Cup with acomfortable 72-46 win over Trinidadand Tobago yesterday. A fifthsuccessive win for Tracey Neville’sside booked their place in the lastfour alongside Australia and NewZealand. The Roses play South Africain their final Group G match todaybefore the semi-finals on Saturday.
BRUCE GETS UNFRIENDLYWELCOME AT NEWCASTLE £Newcastle United faced abacklash from fans yesterday afterconfirming Steve Bruce as their headcoach on a three-year contract.Bruce, who resigned at SheffieldWednesday following five months incharge, replaces Rafael Benitez. “Ofcourse, fans maybe want a differentmanager or players,” said Magpiesdefender Federico Fernandez after#BruceOut trended on Twitter. “Butwe need to work hard.”
EWAN SPRINTS TO STAGEWIN IN TOUR DE FRANCE£Caleb Ewan out-sprinted thecompetition to take stage 11 of theTour de France yesterday. Ewanpipped Dylan Groenewegen on theline in Toulouse following the 167kmflat ride from Albi. France’s JulianAlaphilippe retained the yellowjersey ahead of defending championGeraint Thomas in second place.
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Jason Roy is set to make his Test debut after the World Cup winner was named in England’s squad to face Ireland at Lord’s next week. The opener, 28, has been handed theopportunity after scoring 443 runs to help England pick up their first 50-over trophy. Somerset all-rounder Lewis Gregory has been called up for the first time, but Mark Woodand Jofra Archer are nursing injuries and Ben Stokes and Jos Buttler have been rested. England play Ireland for the first time on Wednesday before the Ashes start on 1 August.
MAN OF THE MOMENT Roy to make Test debut against Ireland after World Cup heroics
FOR just the second time ingolfing history, the OpenChampionship is being heldoutside of England and Scot-land. Starting today, the
sport’s oldest and most prestigioustournament returns to Royal Portrushin Northern Ireland, where it washosted on the only other occasion itleft the British mainland in 1951.
For one man in particular, RoryMcIlroy, returning to a venue wherehe set the course record with a roundof 61 at the 2005 North of IrelandChampionship when just 16 years oldwill be a special occasion.
But for the country as a whole, it isalso an opportunity to welcome aMajor to its shores, showcase one ofBritain’s finest courses to the world
and, perhaps most significantly of all,deliver a huge boost to the economy.
With Dunluce Castle – a fea-ture of hit television seriesGame of Thrones – loomingin the background, thesmall town of Portrush onthe north coast of NorthernIreland, usually home tojust 7,000 people, will wel-come around 215,000fans over theevent’s duration.
Between themthey are ex-pected to spend£17.5m at ho-tels, shops,restaurantsand bars,with an esti-mated totaleconomic im-pact of £33.4mfor the wholecountry, accordingto a forecast by
Sheffield Hallam University’s SportIndustry Research Centre.
Organisers the R&A predict it willbe the largest ever sport event hosted
in Northern Ireland, while a studyfrom Kantar Media says thecountry could derive a destina-
tion marketing benefit from globaltelevision exposure worth a further£50.9m, with around 600m house-
holds expected to tune in acrossmore than 150 countriesworldwide.
It means the tournamentcould bring a combined
£84.3m economic boostto the country, a fig-ure in the region of
the R&A’s claimthat hosting The
Open is worth up to£100m. Royal Birk-
dale derived benefits ofaround £85m in 2017 and
Carnoustie £120m lastyear.
Demand to attend TheOpen at Portrush has beenunprecedented, forcingthe R&A to make this edi-
tion all-ticket for the first time in thetournament’s 148-year history.
It took just six weeks for the entireallocation to sell out last July, withplenty being sold before the dramaunfolded at Carnoustie last year and
Francesco Molinari claimed his firstMajor.
The excitement for this event’s ar-rival was there before that, beforethe £17m in renovations to the area,and before Tiger Woods lit up thecomeback trail with a Masters winearlier this year.
A further 15,000 ChampionshipDay tickets were released in April,selling out within three days.
The enhanced infrastructure,which includes an overhaul of therailway station, is part of an agree-
ment that will see Portrush host TheOpen three times before 2040.
More than that, it will also meanthe area is eligible to host furtherevents in future including the SeniorOpen and the Women’s British Open.The Boys Amateur Championshipwill also be staged there next month.
“The return of The Open to RoyalPortrush is about to bring the great-est spectacle in world golf back intothe heart of Northern Ireland,” saidTourism NI chief executive John Mc-Grillen.
“The 148th Open is being widelywelcomed as a showcase of epic pro-portions, not only for Royal PortrushGolf Club but for the town, for theCauseway Coast area and for North-ern Ireland as a whole. The economicbenefits of hosting The Open herewill be felt for years to come, bring-ing visitors from across the globe toenjoy not only golf but all the othergreat experiences that Northern Ire-land has to offer.”
While there will surely be intensescrutiny on McIlroy’s homecoming,this week all eyes will also be onPortrush.
THE £85M OPEN WINDFALL
McIlroy is the homefavourite this week
215,000Number of visitors expected to descendon Portrush, whose population is 7,000
