BUSINESS

June 13, 2021 · thesundaytimes.co.uk/business thesundaytimes.co.uk/money

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&MONEY
JD Sports blasted over ‘inappropriate’ bonuses
shareholders vote against the voluntary 75 per cent substantially reduced or of £324 million and paid out
‘WFH
‘W IS A FAD,’ SAYS
THE
T KING OF
CANARY
C WHARF
INTERVIEW,
IN PAGE 5

Sam Chambers
and Jill Treanor
JD Sports is under fire for
paying bonuses to executive
chairman Peter Cowgill
despite taking hundreds of
millions of pounds in
government support.
In a scathing report, the
advisory firm Glass Lewis
recommends that
retailer’s “inappropriate” pay
policy. It says they should
oppose Cowgill’s re-election
on the basis of inadequate
succession planning and a
lack of progress on
boardroom gender diversity.
Cowgill pocketed
£4.3 million in bonuses last
year, taking his total pay to
£5 million— even after a
salary cut.
JD tapped the furlough
scheme for £86.1 million and
benefited from about
£38 million in business rates
relief. It was granted
£300 million via the Bank of
England’s emergency liquidity
programme, although it was
never used. Glass Lewis said
JD’s board should have
eliminated bonus awards.
JD’s board stepped up
succession planning last year
amid concerns over the
degree of power wielded by
Cowgill, 68, who has run the
company and chaired the
board for 17 years, delivering
shareholders a return of
about 9,800 per cent.
JD reported pre-tax profits
£16.7 million in dividends last
year. Its shares have more
than recovered their Covid
losses, closing at £9.17 on
Friday, valuing the athleisure
giant at £9.5 billion.
Glass Lewis said JD had
failed to outline diversity
objectives adequately at board
level. JD’s annual meeting is
scheduled for July 1.
ASDA BUYERS TO REAP £1.6BN FROM WAREHOUSES SELL-OFF
The billionaire Issa brothers Mohsin and Zuber Issa, new owners are injecting
and their private equity backed by TDR Capital, are about £800 million of their
backers are set to rake in financing the bulk of their own money to acquire it.
£1.6 billion from the sale of £6.8 billion acquisition of Final bids for Asda’s
about 30 Asda distribution Asda with a £2.8 billion junk warehouses, due this week,
centres — roughly double bond and disposals of its are set to value them at
what they stumped up to distribution centres and about £1.6 billion, a yield of
buy the entire business. petrol stations. The chain’s some 3.5 per cent.

Huawei reveals
impact of ban
Chinese telecoms
giant slumps and
warns UK will stay
‘in the slow lane’
John Collingridge
Britain’s blacklisting of Huawei has ham-
mered profits and sales at the Chinese tel-
ecoms giant, new figures reveal.
Accounts for the company’s UK sub-
sidiary, Huawei Technologies, expose the
immediate impact of the government’s
decision to ban it from Britain’s 5G
cerned about cybersecurity by banning it
from the UK’s 5G network. The giants that
own and equip the UK’s telecoms spine
have started reacting to that ban, which
gives them until 2027 to remove Huawei
kit from the mobile network.
Huawei Technologies accounts show
turnover plunged 27.5 per cent to
£913.3 million in the year to the end of
December, hurt by the government ban
and America blocking the installation of
Google apps on its smartphones. Profits
fell by 20.8 per cent to £29.7 million.
Joe Biden has continued where Trump
left off, using the G7 meeting in Cornwall
to push for a new global infrastructure
plan to counter China’s Belt and Road
Initiative (BRI). Launched in 2013 by the
multitrillion-dollar attempt to spread the
Communist superpower’s wealth and
influence around the world, with pro-
jects ranging from ports to motorways.
Huawei was one of BT’s biggest suppli-
ers until the ban. It won its first contract
with the former telecoms monopoly in
2005 and became embedded in BT’s
mobile network thanks to BT’s 2016
acquisition of EE. As of last year, about
12,500 of BT’s 19,500 mobile masts con-
tained Huawei kit.
It assembled a board of British busi-
ness grandees chaired by the former BP
boss Lord ( John) Browne and including
the former BT chairman Sir Mike Rake.
Browne resigned after the culture secre- Angela Hartnett is among the restaurateurs to have teamed up with Dishpatch’s Peter Butler, left, and James Terry
tary, Oliver Dowden, confirmed the gov-

MEAL KITS
mobile network, with orders collapsing. Chinese premier Xi Jinping, the BRI is a ernment would ban Huawei last July. A finish-at-home meal-kit founder Mandeep Singh kits, shipped weekly, come
Huawei has been one of the key targets The company plans to shrink its UK service used by restaurants also invested. Ex-Farfetch with detailed instructions

of America’s trade war with China.
Founded by People’s Liberation Army
engineer Ren Zhengfei in a flat in Shenz-
hen in 1987, it has grown into one of the
world’s biggest makers of smartphones
and kit for telecoms networks.
Under Donald Trump, America led the
West’s efforts to cripple Huawei by ban-
ning it from core infrastructure and pre-
venting American companies from sup-
plying it with chips and other technology.
Last year, Boris Johnson caved in to pres-
sure from the US and backbench MPs con-
Embattled: Huawei’s Ren Zhengfei
HEAT UP
workforce further. It paid a £90 million including Angela Hartnett’s operating chief Andrew for customers to heat and
dividend to its parent company, up from Cafe Murano has raised Robb will join the board. finish the meals at home.
£55.2 million a year earlier. £10 million for expansion, Founded by Peter Butler, Since starting, Dishpatch
Huawei said: “Political decisions have
not only had a real impact on our UK busi-
ness, the people we employ, and our cus-
WITH £10M writes Anna Menin.
Dishpatch, founded in the
first lockdown last year,
33, and James Terry, 23,
Dishpatch works with
London restaurants to
has delivered more than
75,000 boxes, which range
in price from £40 to £70 for
tomers, they will delay the 5G rollout and obtained the funds from create meal kits that can be a two-person meal. The
put Britain into the digital slow lane. venture firms Andreessen posted anywhere in the UK. funds raised will be used to
“Huawei’s global business has shown Horowitz and LocalGlobe. Restaurants prepare the add 20 restaurants to the 25
resilience and our priority in the UK Entrepreneurs including food, while Dishpatch now available via the
remains working with our customers and Bloom & Wild boss Aron handles logistics, delivery platform, as well as expand
partners to make sure the country’s net- Gelbard and Trouva co- and customer service. The Dishpatch’s 17-strong team.
works remain reliable.”

Branson launches satellites into US Spac
Sir Richard Branson is in talks
to take his satellite launch
company public via a
$3 billion (£2.1 billion) deal
with a blank-cheque vehicle
founded by a former
Goldman Sachs banker, writes
Anna Menin.
Virgin Orbit is finalising a
deal to merge with NextGen
Acquisition II, a New York-
listed special purpose
acquisition company (Spac)
established by George
Mattson, Sky News reported.
Branson’s Virgin Group
empire owns 80 per cent of
Virgin Orbit, which launches
satellites for businesses and
governments. The Abu Dhabi
sovereign wealth fund
Mubadala owns the rest.
The British tycoon, 70, has
made repeated forays into the
world of Spacs, raising
hundreds of millions via
multiple blank-cheque
companies.
Spacs are shell companies
that raise funds by floating on
stock exchanges before
identifying a target company
to merge with, taking it public
in the process.
Virgin Orbit, spun out of
Virgin Galactic four years ago,
has reportedly been seeking a
Spac deal for several months.
Mattson, a former
Goldman partner, is a
director of Virgin Galactic
and a former Delta Airlines
director.
In January, Virgin Orbit
launched ten satellites from
its base in California, with
another launch set to take
place this month.
Virgin Orbit declined to
comment. NextGen
Acquisition II was contacted
for comment.
Sunak urged to help amid unlocking delay
Anna Menin
and Sam Chambers
Rishi Sunak will be presented
with more demands to help
businesses as Boris Johnson
prepares to push back the
June 21 lifting of restrictions.
The British Chambers of
Commerce (BCC) said the
chancellor would need to
delay the tapering of the
furlough scheme; from July 1,
businesses are due to
contribute 10 per cent of staff
wages in a staged withdrawal
of the job protection scheme,
which is set to finish at the
end of September. The BCC
also called for cash grants and
said that “measures need to
be in place until the economy
is able to reopen fully”.
The four-week delay to the
lifting of restrictions is
expected to lead to another
extension of the moratorium
on commercial property
evictions over unpaid rent.
Kate Nicholls, chief
executive of UK Hospitality,
said that full business rates
relief, which runs until the
end of this month, should be
extended by three months.
The Treasury said: “We
deliberately went long with
our support to provide
certainty to people and
businesses over the summer.”
Economists will want to
see if a delay to the removal of
restrictions hits consumer
confidence. Data this week is
expected to show that
unemployment fell from
4.8 per cent in the three
months to March to 4.7 per
cent in the quarter to April.
Midsummer nightmare,
pages 2-3
2

BUSINESS

MIDSUMMER
ANDREW MOORE

THEATRES NIGHTCLUBS
6 News of a four-week delay to the final 6 Many nightlife venues have been shut drinking,” where customers go to the
easing of Covid-19 lockdown measures for more than a year. In a recent poll by bar to order and drink standing up.

NIGHTMARE
has thrown businesses squeezed by
restrictions into turmoil. The prime
minister is set to scrap plans to lift all
legal limits on social contact and big
events from June 21 tomorrow after a
surge in cases of the Indian variant.
Theatres were able to reopen with
reduced audience sizes last month, but
the social-distancing restrictions mean
Hopes of a return to normal on June 21 have it is hard to make productions financially
been dashed by the latest month-long delay. viable. At the 50-seat Shop Front in
Coventry, “everybody’s on tenterhooks,”
Anna Menin meets five firms trying to cope said producer Julia Negus, 57. The
theatre, based in a former chip shop,
put on its first show since the pandemic
last week — Mademoiselle F, by local
playwright Vanessa Oakes. Currently,
Shop Front has a capacity of 25 seats
and no bar – drinks usually being a vital
source of income. “The hard thing is not
knowing when that big relief of being
able to operate as normal will come,”
said Negus. “It’s causing headaches and
heartache for lots of people.”
the Night Time Industries Association,
90 per cent of businesses said the
decision on whether to delay reopening
would have a critical impact on their
chances of survival. Aaron Mellor, 51,
founder of Tokyo Industries, a chain of
nightclubs, bars and music venues, said
the latest delay would be
“catastrophic”. Tokyo Industries runs 45
sites in the UK plus seven abroad. Mellor
has changed many of them to operate
as restaurants or bars with seating, but
he said it was hard to make this model
financially viable: “Our large venues are
reliant on high-volume ‘vertical’
Mellor made many of his 2,500 00
employees redundant last year,, but said
he was now struggling to recruit it
enough people to get his
workforce back up to 1,200. The e
pressures on the sector were
being exacerbated, he added, by
a “cliff edge” at the end of this
month, when the ban ends on
commercial tenancy evictions.
Delaying the lifting of limits
means he has to move hundredss of
sold-out events. He said: “We
booked things as we were told thathat
.”
restrictions would be lifted then.”

The billionaire
bargain hunters
French mogul Patrick Drahi has swooped on BT. He’s not alone
in eyeing unloved UK stocks. By Jill Treanor and Peter Conradi

P 12.1%
atrick Drahi took just an hour tics, Barford said, as a result of its com- stock market on Thursday. “We fully sup-
to make up his mind. After mitment to invest £12 billion so its Open- port the management’s strategy.”
being introduced to his reach division can install high-speed While that prompts questions about
teacher’s sister at a party at broadband in 25 million homes by 2026. what Drahi hopes to achieve from his
the prestigious École Poly- Jansen, 54, appointed in 2019 to inject £2.2 billion investment, it will also raise
technique in Paris, he pro- BT stake built by fresh energy into the laggard, is attempt- his profile in Britain, where until now he
posed. His gamble paid off: Drahi’s Altice UK ing to unwind its diversification into has been associated with his takeover of
Lina said yes. Thirty years pay-TV by looking for buyers for a stake in the auction house Sotheby’s in 2019.

on, they remain happily mar-
ried — and one of the richest
couples in the world, due to the French-
Israeli businessman’s financial acumen.
Last week, the 57-year-old put his
rapid courtship skills to use again. This
time the target of his attention was BT,
which is undergoing a radical transfor-
mation to deal with the digital age.
25m
BT Sport. He wants to focus BT’s energy
on broadband. This appears to be what
captured Drahi’s attention.
Not long after Jansen was installed as
BT’s boss, Drahi visited him to offer help
Number of homes with the troublesome Openreach roll-
BT is targeting for out. Drahi has form, having connected
fast broadband millions of homes across France through
his Altice empire, which also has net-
He established his career in France
after his family moved to Montpellier
when he was 15. His parents were maths
teachers and he inherited their gift for
numbers, gaining an engineering degree.
According to a recent biography of
Drahi by Elsa Bembaron, he was a young
man in a hurry, driven by the desire to get
rich. As a student, he had three ambi-

The telecoms tycoon stunned the City
with Thursday’s 7am revelation that he
had stealthily amassed a 12.1 per cent
stake, worth £2.2 billion. As a result,
Drahi — born in Casablanca to a family of
Moroccan Jews, whose ancestors fled the
Portuguese inquisition — became BT’s
biggest shareholder and ignited a debate
about the future of the former state-
£8.7bn
works in Portugal, Israel and America.
That overture came to nothing — until
last Wednesday. BT’s outgoing chairman
Jan du Plessis, who is expected to stay on
Drahi’s wealth, until the autumn, got a call from Drahi at
according to 4pm to tell him of his stake. By 4.15, Jan-
Forbes sen was also speaking to Drahi. The
Frenchman’s private comments to the
two men — who are thought to have been
tions, she wrote: “To drive a BMW before
he was 30, earn 50,000 francs before he
was 40 and have so much money when
he reached 50 that the interest on his
accumulated capital was the same as the
salary of . . . [Peugeot’s boss] in the 1980s
— the equivalent of €335,000 today.”
According to Forbes magazine, he has a
fortune of $12.3 billion (£8.7 billion).

owned monopoly.
Drahi’s swoop also highlighted the
broader underperformance of London’s
stock market — held back by Brexit uncer-
tainty and anxiety about the govern-
ment’s initial response to Covid. He is not
alone among billionaire bargain hunters
in wanting to exploit it.
Daniel Kretinsky, dubbed the Czech
Sphinx, has bought 15 per cent of Royal
Mail and almost 10 per cent of Sains-
bury’s. Kenneth Dart, secretive Caymans-
based heir to the disposable cup empire
Dart Container Corporation, owns 7 per
cent of British American Tobacco and
3 per cent of rival Imperial Brands.
“The UK market has been a woeful per-
former relative to other global markets,”
said Adrian Gosden, an investment
director at fund manager GAM. But while
mid-cap companies such as Cobham and
McCarthy & Stone have been the prey in a
private equity acquisition frenzy, FTSE
100 stocks have not received many bids.
Alan Custis, managing director at Lazard
Asset Management, pointed out that so
far in the pandemic, only one FTSE 100
giant — insurer RSA — had been taken over.
Drahi’s intervention illustrates the
issues at BT. The company was tradition-
ally what James Barford, telecoms expert
at the media analyst Enders, described as
a “steady-as-you-go yield stock”. That has
changed as its fortunes have dived. The
shares crashed to less than 100p during
last year’s Covid rout when chief execu-
tive Philip Jansen suspended the divi-
dend for the first time in 36 years. Now it
carries more “growth stock” characteris-
D
reconciled after tensions led to du Ples-
sis’s resignation earlier this year — appear rahi was a keen supporter of
to have matched those he made in public. Emmanuel Macron in the 2017 elec-
“BT has a significant opportunity to tion, with rivals of the president-
upgrade and extend its full-fibre network to-be claiming that Drahi’s media
to bring substantial benefits to millions of outlets were rooting for him; he
households across the UK,” Drahi told the owns BFMTV and Radio Monte Carlo. In
the US, he owns News 12, Cheddar and
the i24news networks. He also provides
UK SHARES HAVE BEEN OUT OF FAVOUR... cable television in Israel.
FTSE All-Share index relative to MSCI World index French commentators agree that
Drahi’s real passion in life is cable; he
Price-to-earnings ratio Price-to-book ratio
started out selling subscriptions door-to-
1.2 door. Yet his swoop on BT seems to have
taken them largely by surprise. “Patrick
1 Drahi is certainly difficult to read,” said
La Tribune, the business newspaper.
0.8 Philippe Escande, an economic com-
mentator for Le Monde, said Drahi had
0.6 crossed the Channel at an opportune
moment, as BT is engaged in a big and
0.4
expensive programme and is looking for
2001 2005 2010 2015 2020 allies. “Drahi offers his international
Source: Lazard Asset Management
expertise, but most of all BT needs finan-
cial support,” he wrote. “In this area, the
... AND BT HAS BEEN ONE OF THEM Franco-Israeli boss is a master in the art Altice’s Patrick in 1988, Drahi set up his own businesses amass the rest through complex transac-
of debt and in restructuring of all kinds.” Drahi and a small in France, one of which he sold to the tions. Drahi has not confirmed details.
BT That kind of financial engineering, number of other American cable baron John Malone. He A BT boardroom role looks likely,
though, has been falling out of favour. tycoons are set up Altice in 2001 and embarked on a especially as Deutsche Telekom, which
500p
Drahi took his Altice business — which is bagging stakes global acquisition spree. Drahi gleefully pipped as BT’s biggest
400 based in Luxembourg and was listed in in undervalued It is not clear how much cash he has at investor by owning just 0.04 percentage
300 Amsterdam — private this year. Reports blue-chip giants his disposal, but the way he built his BT points more, has Adel Al-Saleh on the
said it would allow him to focus on paying stake shows his determination. He is board. Next month’s annual meeting
200 down €29 billion (£25 billion) of debt. thought to have spent the past three might be an opportunity to raise that.
100 James Ratzer, an analyst at New Street months buying 2.9 per cent of BT through Drahi has promised not to make a bid
Research, doubts Drahi will be a passive his newly formed Altice UK — below the and is obliged to abide by that for six
0 investor as he has never taken a minority 3 per cent level at which it would have to months under Takeover Panel rules. He
2010 2012 2014 2016 2018 2020 position in previous investments. After be disclosed. Last week, he instructed seemed to acknowledge BT’s political
Source: Thomson Reuters Eikon starting out with electronics giant Philips Morgan Stanley and BNP Paribas to sensitivity, sending letters to both the
The Sunday Times June 13, 2021 3

LIVE EVENTS WEDDINGS TRAVEL

6 Paul Byrom, managing director of
events company Immediate Live, said
revenues were “pretty much zero” last
year amid the lockdowns.
Since last month, big events have
been able to take place, but with
attendance limited to 50 per cent of
capacity or 1,000 attendees at indoor
events, and up to 4,000 outdoors. In
that time, Immediate Live has run
events including the BBC Gardeners’
World Spring Fair. However, Byrom said
the removal of crowd caps was crucial
to the sector’s survival and enabling
events to take place over the summer.
“Given all the positive noises . . . from
the government, it was fair for us to feel
we were going to get back to some form
of normality,” said Byrom, 48. Coming
up is the Festival of Quilts in
Birmingham in late July. “If the event
can’t go ahead,” he said, “I could face a
£500,000 loss.”
6 Reports that the prime minister was
considering lifting the 30-person limit
on weddings gave the industry a
glimmer of hope that has since been
dashed: the cap will remain in place,
and uncertainty is hanging over the
industry. “It’s been soul-destroying to
see venues and suppliers go under,”
said luxury wedding planner Vanessa
Harness, 49, pictured with husband
Dominic, 45. Her Cambridgeshire-
based company, R&F Weddings, had
just one event last year and one so far
this year as couples opt to delay.
Extended restrictions meant it was
likely her business would “lose weddings
into next year,” she said. In a typical year,
Harness organises up to 12 ceremonies.
She has five booked for this year but is
unsure whether they will happen. “I’ve
got couples who’ve postponed twice and
are booked in for September. They’re
asking me if they’ll be OK ... I’ve no idea.”
Those planning to get married this year
have cut guest lists from 200 to 50 —
“you can’t invoice the same amount”.
6 The travel industry has been buffeted
by mixed signals from ministers on
whether Brits should book holidays
abroad. Transport secretary Grant
Shapps warned last week that the
resumption of international travel could
“screw up” Britain’s Covid recovery,
denying that the government was close
to adding more countries to the “green and off furlough, but he has kept his
list” for quarantine-free travel. business running throughout Covid to
“We’re in a worse situation than we communicate with customers and
were a year ago,” said Tony Mann, 57, reschedule bookings as restrictions
owner of Bradford-based agent Idle have changed – a huge amount of work.
Travel. “I don’t know which way it’s Mann makes money only when his
going after the shock of Portugal being clients travel. “The government has
put on the amber list with no notice.” abandoned us, but we don’t want to
Mann’s five employees have been on abandon our customers,” he said.

ILLUSTRATION: JAMES COWEN

Can’t get the staff ? You

might need to top up pay
Bottlenecks are
forcing employers
to raise wages
amid a burst of
‘revenge spending’,
writes Jill Treanor
Martin MacPhail faces an
unexpected decision. RBH
Management, the Glasgow-
based business where he is
HR director, needs to hire 90
staff for the 50 hotels it runs
on behalf of big chains such
as Hilton and Marriott.
There is an acute shortage
of workers. Months after the
economy emerged from the
deepest recession in 300
years, should he raise wages?
“We’re still debating it
internally,” MacPhail, 44,
said. “Ultimately, you’re
putting the cost on to the
business and then the
JOHN KEEBLE/GETTY IMAGES
saved during the pandemic —
via a rise in wages.
That would be welcomed
by unions. Kate Bell,
economist at the TUC, said
that while wages had started
to rise just before the
pandemic, Britain had been
through a long period of
“wage squeezes”. “Workers
are long overdue a wage rise
— but I’m not sure that’s
baked in yet,” she said.
Reconciling wage rises with
a picture where almost
1.7 million are unemployed,
and even more are on furlough
— which will taper from next
month before ending in
September — is tricky.
Steffan Ball at Goldman
Sachs described the situation
as a “bottleneck”. He said the
number of construction
workers on furlough had
dropped in the second half of
Economists have warned of an upwards ‘wage-price’ spiral last year and remained flat at
a time when job adverts were

consumer — and then that
drives inflation.”
His predicament will be
familiar to other bosses as the
labour market squeeze
threatens to hamper the
recovery. Instead of the jobs
bloodbath predicted by
April to June last year, 10 per
cent in retail and 4 per cent
across the whole market.
“That’s driven by the
shortage of people,” Reed
said. “You pay a premium to
get people to move”.
Rishi Sunak’s furlough
18%
Boost to hospitality salaries
since this time last year
increasing. Yet the proportion
of hospitality staff on furlough
remained at 21 per cent. “This
suggests the skills of workers
on furlough don’t match
those demanded by firms and
they are seeking to engage
new employees rather than

many, with warnings that
four million people could be
out of work, Britain is
desperately short of workers
due to an exodus of European
nationals and quirks of the
furlough scheme. The debate
scheme is still paying the
wages of 1.8 million workers —
the lowest number since the
scheme was launched — while
an estimated 500,000 EU
nationals are no longer on
payrolls, probably having
1.8m
employ furloughed ones.”
Research by LinkedIn
found that jobseekers were
being put off by fears of falling
victim to the “last in, first out”
Number of workers model — that in the case of a
still on furlough fresh downturn they could be

has shifted to whether wages
will have to go up.
Nigel Bolton, co-chief
investment officer of
BlackRock’s fundamental
equity group, said he could
see “early signs of wage
inflation” amid a demand
boost thanks to “revenge
spending” by consumers
freed from lockdown.
Vacancies are outstripping
the supply of workers. Data
published by the Office for
National Statistics (ONS) from
jobs agency Adzuna last week
showed that there were more
online vacancies than in the
same week of 2019. On
Tuesday, the ONS will provide
the latest snapshot of
unemployment, with the rate
government and regulator Ofcom before for returns to roll in. “But how could he try for the three months to April
his stake-building was formally revealed. to accelerate the bet ... [It’s] really by try- expected to dip slightly to
The debate now is whether Drahi will ing to agitate for change”, said Ratzer. 4.7 per cent, or 1.7 million out
push for a carve-out of Openreach, which For now, BT seems relaxed. “We wel- of work. That is higher than
analysts at Jefferies value at £30 billion; come all investors who recognise the the decades-long low of
BT’s market value is £19 billion. There
would be concerns about the problem of
Performance long-term value of our business,” the
company said on Thursday. The shares,
3.8 per cent, but less than
forecasters had feared.
untangling the pension scheme.
This spring, BT reached an agreement
from the UK which have almost doubled since last
year’s low, rallied by 8.4 per cent last
James Reed, chairman of
recruitment firm Reed, said
with Ofcom that gives it the freedom to
market has week to close at 192p. Drahi will be hop- that wages being offered
charge what it wants for full-fibre broad- ing for more in that direction — but the through his business were
band over the next decade and make a 10
to 12 per cent return. It could mean that
been woeful ride may be bumpy and eventful. rising. In hospitality and
catering, average salaries
Drahi is making a long-term bet, waiting Oliver Shah, page 7 have risen 18 per cent on
returned home while Covid
ripped through Europe.
Before then, Brexit had
slowed EU migration.
It was only as the
pandemic struck that average
real wages, which include
inflation, rose above 2008
levels for the first time, with
weekly pay reaching £474, up
from the £473 in March 2008.
Potential wage rises are
just part of the inflation story.
Pandemic-induced cost
increases from shortages of
computer chips and
commodities, such as oil,
could also fuel price rises.
Data from the US last week
showed that inflation hit 5 per
cent in May, its highest level
since 2008. On Wednesday,
data will be scrutinised to see
how much Britain’s inflation
rate has jumped from the
1.5 per cent level it touched in
April. Adam Black said he
could see inflation
everywhere, although his bed
business, Button & Sprung, is
absorbing the price rises it
has faced. His suppliers
demanded an 8 per cent rise
in April. He swallowed that.
They asked him to take a
further 5 per cent rise this
5%
US inflation rate in May,
the highest since 2008
month, which he has taken as
a surcharge in the hope of it
being removed later.
“Once prices go up, they
never tend to come back
down,” Black said.
The Bank of England will be
watching. Sustained rises in
costs and wages could be the
trigger for the central bank to
tighten monetary policy, after
£895 billion of quantitative
easing and rates being glued
to their 0.1 per cent historic
low. Andy Haldane, outgoing
chief economist at the Bank, is
on high alert. “If wages and
prices begin a game of
leapfrog, we will get the sort
of wage-price spiral familiar
from the 1970s and 1980s,” he
wrote in the New Statesman.
Yet he also told LBC, the
London radio station, that
households needed to be
encouraged to spend more —
some £150 billion has been
laid off by their new employer.
Tony Wilson, director at
the Institute for Employment
Studies, said wages would go
up in some sectors but that a
real problem was working
conditions. “The point is
going to be more about
whether you can offer better
terms and give workers more
control over the hours they
work,” he said.
Anne-Marie Simpson, 56,
has given her four staff at the
Simpsons Gin Bar in Sutton
Coldfield a 10 per cent rise.
“Offers are going on all the
time, so if you want to keep
your staff, you have to make
sure you’re doing things to
retain them,” she said.
In Glasgow, MacPhail is
poised to pay retention
bonuses of up to £500 and
will launch a “refer a friend”
scheme to encourage staff to
find recruits. Staff could end
up with £1,500 if they
recommend five people.
ONLINE
Is the furlough scheme
pushing up wages? Read
our analysis at
sundaytimes.co.uk

James Timpson
Treating suppliers well is the foundation of success

T
he three essential ingredients of
a successful business are great
colleagues, happy customers
and excellent suppliers.
It’s rare that all three work in
perfect harmony. Suppliers
often get the rough end of the
stick and are used as pawns due
to their perceived vulnerability. It
needn’t and shouldn’t be like that.
A friend once gave me some great
advice: the trick to being a good buyer is
to deal with people you like, who work
for companies you trust — and if you’re
making a decent margin, stop
negotiating. It doesn’t matter what they
make; it’s what you make that’s
important. If only it was that simple.
Some suppliers let themselves down —
they over-promise or over-trade. One
supplier arrived at our office in a brand
new Ferrari and parked it outside the
front door. He told everyone who
admired the shiny motor how much he
was making out of our account. It was
naive and it’s no surprise that we no
longer do business together.
Due to sharp practices from certain
buyers, many suppliers now face a
deluge of compliance requirements,
with detailed audits and often pointless
bureaucracy to manage and pay for. It
sucks much of the fun out of business.
I heard of one supplier being charged
£1,500 a day to be inspected by an
outsourced auditor, which checked that
all the internal processes were spot-on.
After two days, the supplier got an A
grade. The next day, the same auditor
returned — this time working for a
different customer but asking the same
questions. It awarded yet another A.
Big retailers can require suppliers to
answer more than 500 questions to pass
the test, but some low-price retailers get
it right. They use ethical suppliers and
check on things that really matter. By
keeping it simple, they can buy for less.
Let me give you an example. If I try to
buy a truckload of cushions, delivered to
one warehouse, and I insist on minimal
paperwork and pay within 10 working
days, I’ll probably get them at a low
price. I’ve made it easy and the supplier
can keep costs down. But if a competitor
requires the cushions to be delivered to
four different warehouses, imposes a
fine if the paperwork isn’t 100 per cent
correct, insists on an independent audit
and doesn’t pay for 120 days, then not
surprisingly, it costs the supplier more.
That cost is built into its pricing matrix.
Box-ticking buyers need to realise that
this is why the discount retailers can sell
more products at lower price points and
still make good money.
At Timpsons, we spend about
£2 million a week with our suppliers. We
aren’t perfect but we try to be the best
company they do business with — and we
want suppliers to see us as true partners.
On March 23 last year, all our shops
At the bottom of
the remittance
advice is my
mobile number
closed down and we had no idea what
would happen to the business. I called
all our main suppliers and promised
they would be paid in full, but we didn’t
know whether we would ever be able to
place another order with them. The trust
we have built over the years helped us to
support each other, and I’m pleased to
say that none of our suppliers went bust.
We can both do well if we both act well.
Landlords are another kind of
supplier. A number of enlightened
landlords gave us rent reductions while
Covid was affecting our sales. We wrote
to every one to thank them and had a
number of warmly worded replies. They
all made similar comments: we were the
only tenant who wrote to say thank you.
Come the next rent negotiation, I hope
we will get a better deal than those that
failed to recognise how landlords had
helped them out in their time of need.
To set the tone on the way we do
business, we have a suppliers’ manual
that explains how we operate and what
minimal supporting documents we
need. At the bottom of the remittance
advice is my mobile number in case of
any problems. My friend Julian Richer,
the poster boy for responsible
capitalism, taught me this simple idea.
I’ve had only three phone calls this year,
so hopefully we are on the right track,
but every month I sit down with the
finance team to check whether any of
our suppliers haven’t been paid on time,
question why, and ask what we’re going
to do about it. Prompt payment is a
fundamental part of the pact that we
have with each supplier; too many
companies use their suppliers as an
extra source of finance and this is wrong.
The main event of the year is our
suppliers’ lunch, when we invite more
than 200 guests to a celebration of our
relationship. Some companies get their
suppliers in to demand a discount, but we
use the lunch to say thank you, and we
pick up the costs. In the shoe-repair
world, it’s a bit like the Oscars: as well as
updating everyone on how our business
is performing, and outlining our plans,
we give awards that recognise their
contribution to our success. If it wasn’t
for them, we wouldn’t have a business.
James Timpson is chief executive of
Timpson Group
4 The Sunday Times June 13, 2021

BUSINESS

Upstart
PETER TARRY FOR THE SUNDAY TIMES

designers
get comfy
with tech Etsy is
like
Online marketplaces have given rise to a having
new generation of traders unbeholden to a little
banks or landlords. By Sam Chambers shop
that the
whole
world
can
walk
PART 3 RISE OF THE ENTREPRENEURS past

W
eeks before the pan-
demic ripped through
the country in March
last year, James and
Natalie Mather learnt
that their nine-month-
old son had a cancer-
ous tumour growing in
his stomach.
Lockdown could not
have come at a worse time. While Natalie
stayed with Isaac in hospital for more
than three months, James was unable to
visit. Stuck at home, he juggled working
as an architect with looking after the cou-
ple’s elder son, Caleb. In those desperate
days, he decided to clear out the garage,
which meant selling the chunky trestle
tables he had made for their wedding.
They sold almost immediately, but
James, 35, then got a big order from a
property developer and decided to buy
more wood to honour it. Realising there
was a potential business in it, he set up
Sustain Furniture on eBay, then started
selling on Etsy and through his own web-
site — branching out from tables to
shelves and bookcases. In 15 months,
James and Natalie have moved their firm
into a workshop in Stockport, Greater
Manchester, taken on four staff and sold
almost 2,000 pieces.
“If Isaac wasn’t sick, I don’t think we
would have had the courage to set up the
business,” said Natalie, 38, bouncing her
now two-year-old son on her lap. “You
think, ‘What’s the worst that can happen?’
— we were already going through it.”
The Mathers are among thousands
who have spun opportunity out of acute
adversity during Covid. New business
incorporations jumped by 22 per cent to
810,323 in the year to March, according to
data from Companies House. The Office
for National Statistics says more than a
fifth of businesses created have been in
the retail and wholesale industries.
Opening your own online shop has
never been so easy. To start selling on
Amazon, eBay or Etsy, entrepreneurs
simply need a camera, products and an
internet connection. If you want to set up
your own website, Shopify can, in effect,
create it for you and handle payments on
a monthly contract for a small fee. And
retail entrepreneurs are not just popping
up online: on the high street, rents have
tumbled to a level where some are willing
to take the plunge and lease shops.
There are more than half a million peo-
ple in the UK actively selling products on
Etsy, the online marketplace for hand-
made crafts. Some 47 per cent of Etsy’s
sellers were new to the platform last year.
When the second wave of the virus
took hold last autumn, Surrey Adult
Learning told pottery instructor Penny
Howarth that it would not be able to keep
paying her. So she decided to market
some of her dozens of miniature ceramic
houses, made in her studio at the bottom
of her garden, on Etsy. The orders kept
coming and Penny Pottery UK has now
shipped more than two thousand to cus-
tomers from America to New Zealand.
“The moment they got listed … it was
just an explosion,” the 46-year-old said.
“Etsy’s like having a little shop that the
whole world can walk past.”
Self-employed communications pro-
fessional June Ileomoh was between con-
tracts when the pandemic struck. Faced
with unemployment for the first time, Ile-
omoh, 34, started selling cushion covers
and storage pots — with colourful designs
evocative of her Nigerian heritage — from
her south London home. Her Etsy shop
has received more than 200 orders.
“I wasn’t sure whether people would
like it — but they sold. Seeing them in peo-
ple’s homes is really satisfying,” she said.
While Etsy allows creatives to spin a
business out of their hobby, Amazon’s
Marketplace is seen as the platform for
incubating more sizeable companies.
The tech giant’s UK sales leapt 51 per cent
to $26.5 billion last year, with small and
mid-sized third-party sellers accounting
for over 60 per cent of physical products.
A new breed of investment firm is
scouring Marketplace for the most prom-
ising consumer brands, with the goal of
creating a Procter & Gamble for the 21st
century. The model was pioneered in
America by Thrasio, which has bought
about 100 Amazon start-ups.
Once the acquisitions are made, the
companies’ new owners inject working
capital to grow sales and run them along-
side other acquisitions. The goal is to
negotiate savings with suppliers and cut
administration and marketing costs.
London-based Heroes, started last
year, has bought dozens of start-ups on
Amazon Marketplace. One seller was
David Stephen, who had been retailing
gardening tools on Amazon under the
Davaon brand since 2015. Stephen, 46,
June Ileomoh,
above, and James
Mather, left with
his family, have
seen sales soar
had started the business as an escape
from a job that separated him from his
children for long periods — but when lock-
down hit, he went from 150 orders a day to
up to 1,000. “It went absolutely crazy. I
spent every day in April locked in our log
cabin packing boxes for 12 hours a day,” he
said. Stephen sold to Heroes for almost £2
million to claw back a work-life balance.
Marketplaces have their drawbacks.
While selling on Amazon gives entrepre-
neurs access to its world-beating logis-
tics, Stephen said Amazon was getting a
cut of about 30 per cent of his sales
through fees.
When Amazon passed on Rishi
Sunak’s new 2 per cent digital services
tax last year, Stephen was convinced that
the tech giant “doesn’t care about sell-
ers”. Etsy also passed the tax on to sell-
ers, although eBay absorbed it. Amazon
said it spent over £2 million helping SMEs
on Marketplace in 2019.
Amazon retains customer data gener-
ated by Marketplace sellers and has been
accused of using it to produce clones of
popular products, which are then sold
under Amazon’s brand at a discount.
Amazon said employees are prohibited
from using data in this way.
This, argues Shimona Mehta, is where
Shopify comes in. Its managing director
for Europe said it aimed to be the ideal
platform for entrepreneurs wanting to
cultivate brands. They can choose from
thousands of apps on Shopify’s store to
help drive social media users to their web-
sites, minimise returns or help upsell cus-
tomers onto other products. Last year,
the number of UK merchants running
e-commerce businesses through Shopify
more than doubled to 130,000.
“Twenty years ago, you needed about
a million dollars to set up a mid-level
e-commerce website and host it for a year.
It’s now ten dollars a month,” said James
Wise, partner at venture firm Balderton.
While Shopify is the biggest player, an
ecosystem now exists to support e-com-
merce entrepreneurs. Ankorstore and
Faire are, in effect, bringing trade fairs
online by connecting independent retail-
ers with thousands of wholesalers.
Barriers are coming down for those
brave enough to start up on the high
street, too. In the past, property owners
would have favoured the security pro-
vided by a national chain over a start-up —
but with 14 per cent of Britain’s shops
vacant, many do not have a choice.
Rent-free periods and rents linked to
turnover are increasingly common. To
attract tenants to Kingland Crescent in
Poole, Dorset, asset manager Legal &
General is offering to cover their rent and
business rates for two years.
There are still parts of the country with
resilient high streets full of independent
shops. Lisa Powell, formerly a self-em-
ployed events organiser, opened Dove
Country Lifestyle last November in Chip-
ping Campden in the Cotswolds, selling
homewares and gifts. “People around
here are massively into supporting local,
independent businesses,” she said.
Covid has hit retail hard, but the wave
of entrepreneurship it has unleashed may
go a long way to repairing the damage.

Platforms cosy up to ‘creators’

option to allow popular income to aspiring commentators from big
DANNY personalities to monetise personalities. publications; its top ten

FORTSON followings, while Mark

TECH TALK
Danielle Corsetto is living her
“eight-year-old dream”.
Every week, she publishes
another couple of pages of a
monster 600-page graphic
novel that she expects will
take six years to complete.
What keeps her going, and
her bills paid, is an army of
almost 2,000 followers who
give her $2 to $5 a month, or
about $4,500 in total, on
Patreon — a site that helps
artists charge for their work.
It is enough for a good life in
her West Virginia home.
The 40-year-old, who
briefly tried her hand as a
newspaper cartoonist, said:
“I have got to the point where
I’m like, ‘I do what I want.’ It
feels really great. Everybody
should be able to do this.”
Corsetto is part of the
“creator economy” — the
buzzy term coined for the
rapidly growing global
community of video game
Zuckerberg said last week
that Facebook would not take
a cut from creators who use
its growing suite of tools,
including a subscription
feature, until at least 2023.
The goal, he said, was “to
help more creators make a
living on our platforms”.
To drive home the point,
he released a tool that
pointedly calculates just how
much money other platforms
take from subscriptions and
income, such as Apple’s
30 per cent in its App Store.
Why the apparent
conversion at the company
that, along with Google, has
benefited from, and defined
itself by, exploiting an endless
trove of free content?
It is partly due to TikTok,
which has lured hundreds of
millions of users from the
likes of Facebook. Dancing
teenagers and other amateurs
on the platform have built
vast followings with amazing
speed. Charli D’Amelio, a 17-
year-old schoolgirl from
California and TikTok’s top
influencer, has 117 million
Social media’s charge can
also be partly explained by its
users. Millions of young
people have grown up with
the web, and their heroes are
online personalities whose
success seems more
attainable than that of, say, a
footballer or rock star. Ryan
Kaji, a nine-year-old who
opens toys on YouTube, last
year brought in nearly
$30 million via his channel.
More than 50 million
people around the world
consider themselves
“creators”, according to
venture firm SignalFire. The
explosion of belief that
anyone can post videos, an
article or a podcast — then
ride the algorithmic wave to
stardom — has led to a surge
in start-ups and services.
Newsletter subscription
platform Substack has wooed
a raft of journalists and
SEASON FOUR OF
DANNY IN THE VALLEY
YIELD GUILD GAMES’
earners bring in a combined
$7 million annually.
Patreon has more than
200,000 creators who last
year earned a combined
$1 billion from fans. Jack
Conte, Patreon’s founder,
told CNBC recently: “It’s been
an amazing time these past
few years to watch the web
shift away from ... ‘Creators
ought to be working for free’
to ... ‘Oh wait, these are real
businesses.’”
Yet the stories of bedroom
millionaires belie a harsh
reality: most people
“creating” online will never
make any money. On Spotify,
97 per cent of the 6 million
musicians and groups make
less than £70 a month.
Twitch, the video game
streaming giant, is similarly
dominated by a razor-thin
layer of stars. Most are
performing for no one.
According to industry expert
Zach Bussey, a streamer who
attracts just six views is in the
top 6 per cent of the field.
Li Jin, founder of Atelier
Ventures, has called on the
industry to roll out tools to

GABBY DIZON: ‘THIS

streamers, independent
journalists, musicians and
artists, podcasters and
influencers who are
leveraging tech platforms to
followers. Her family is about
to release a TV show and she
has struck deals with clothing
and cosmetics brands.
Such success attracts other
help a creator “middle class”
— people such as Corsetto.
VIDEO GAME IS These include better
monetisation tools and even a
SAVINGG “universal creative income”

build consumer audiences
and get paid directly.
Attracting creators, and
the audiences they bring, has
become the latest obsession
for Big Tech. Twitter recently
launched a subscription
LIVES’’
creators, who bring in more for aspiring creators. Corsetto
users to TikTok and pull them said: “I’ve been receiving
away from rival platforms. more emails lately from other
TikTok doubled down last Patreon-esque platforms, and
year, launching a most of them have this angle
$200 million (£140 million) of, ‘Make more money,
THESUNDAYTIMES.CO.UK/DANNYINTHEVALLEY
creator fund to provide extra monetise your following’.”
The Sunday Times June 13, 2021 5

BUSINESS

‘WFH is a fad. We’re moulded by

science or God to be together’
Sir George Iacobescu fled Romania and built Canary Wharf. At 75, he’s stepping back, but he’s feeling defiant
SUNDAY TIMES PHOTOGRAPHER RICHARD POHLE
blat, who admires Iacobescu’s “marvel-
INTERVIEW lous temperament”, says Reichmann was
“very far-seeing” but adds: “What he
OLIVER SHAH didn’t understand were the trials and trib-

T
ulations of dealing with the procrastinat-
ing government in this country.”
he show flat on the 52nd floor “The curve of happiness is U-shaped,”
of One Park Drive, a new resi- Iacobescu says of Canary Wharf’s early
dential skyscraper in Canary troubles. “We went through difficult
Wharf, may be half-finished, moments, but ultimately the model was
but the view from the balcony right. We didn’t have the insight on how
has been 35 years in the mak- long it takes to deliver infrastructure. On
ing. Beyond a forest of glass the other hand, I don’t know if having the
and steel towers — the head- insight wouldn’t have been a liability,
quarters of Barclays, Citi- because if you have the insight you’d
group, HSBC — the Thames think ten times before you do it.”

glitters and London reclines in the haze
of a summer afternoon. Sir George Iaco-
bescu, the 75-year-old engineer who
scouted out the Docklands site in 1986
and oversaw the construction of a finan-
cial powerhouse to rival Wall Street, has
so far resisted sentimentality, but the
spectacular vista melts him.
“It’s a miracle,” says Canary Wharf ’s
executive chairman, his Romanian
accent rolling the “r”. “It’s the top of the
world. There’s been a lot of blood, sweat
and tears, and a bit of vision. Canary
Wharf is the biggest revolution in the past
200 years in London. Since John Nash
designed the West End, this is the biggest
change. When we started, the only tower
in London was the NatWest tower in the
City. Look at all the towers now — in
Canary Wharf, in the City and in Strat-
ford. It made London competitive and it
cemented London as the capital of
Europe, with or without Brexit.”
Canary Wharf Group and Iacobescu
are nearing the end of an era. Next
month, he will hand over responsibility
for development to Shobi Khan, who
joined as chief executive 18 months ago. It
is the most significant shake-up since the
Docklands empire’s £3.8 billion takeover
by Canada’s Brookfield and the Qatar
Investment Authority in 2015.
Iacobescu’s comments suggest that let-
ting go may not be entirely straightfor-
ward. “I still can fall in love with my
future ex-job,” he says wistfully, gazing at
one of the more recent buildings. “Once
your fingers are in development, you’re
always in development . . . I think, proba-
bly instead of working seven days, I’m
going to work five days. But I’m gonna
have time. For the first time in 35 years,
I’m going to read a book just for fun.”
trum. It apologised last September after
Khan and managing director Howard
Dawber were reported to have come into
the office without quarantining after an
is competition, there is creativity, there is
dating, there is learning, there is educa-
tion. We’re all chemically made to be
together. We’re moulded by science or
to build towers with huge floor plates that
were difficult to fit into the cramped City.
Iacobescu walked from his hotel in May-
fair along the river and to Canary Wharf.
P
erhaps it’s no surprise that Iacobe-
scu was drawn to capitalism. He
was born in Romania in 1945, a year
after Soviet troops occupied the
country. His parents disliked com-
munism so much they delayed register-
ing his birth by two days so it wouldn’t fall
on November 7, the anniversary of the
October Revolution.
Iacobescu’s father, a haematologist,
suffered alongside other members of the
professional class under Nicolae Ceaus-
escu, the dictator who came to power in
1965. His parents had a “very difficult
life” and divorced. “My father died at 56,”
Iacobescu says. “Everything that he had
been able to save in his life was enough to
buy a second-hand car.”
Iacobescu was brought up by his
grandparents. His grandfather, a lawyer
and publisher of a newspaper called Ade-
varul, or The Truth, was jailed for three
years by the regime. His grandmother fed
him by selling prized possessions: “We
Canary Wharf in had a lot of paintings and sculptures
the 1980s was which, in order to survive, she sold one by
‘nothingness’, one. That’s why I’m so much in love with
says Iacobescu. sculptures at Canary Wharf.”
Thatcher (left, The country was cash-strapped as
with Paul Ceausescu funnelled what money it had
Reichmann) towards servicing international debts.
helped usher in “There was no food, no heating,” Iacobe-
a financial scu says. “The joke was that if you were
powerhouse inside an apartment, you should close
the window so the passers-by don’t catch
a cold . . . My future mother-in-law had to
have a cancer operation. The hospital
said, ‘We have no light, so if you bring
tenant, State Street, moved in four years your own bulb, we’ll operate on you.’ She
later. How did Iacobescu feel when that came from home with a 40-watt bulb.”
first tower was topped out by Michael In 1975, Iacobescu managed to escape
Portillo? “My feeling was that wouldn’t it after an aunt paid $5,000 to a middle-

H
overseas trip (“If I was sick and wanted to God to be together, to work together.” What he found made him think of The be nice to have the Jubilee line.” man. He fled to Montreal and spent

e may want to choose something
light. The pandemic has placed a
question mark over the future of
Canary Wharf, already shaken by
Brexit and the 2008 crisis. A frac-
tion of the 120,000 workers who previ-
T
isolate myself, I would come into the
office because there was nobody here,”
Iacobescu says wryly). The executive
chairman may be talking his own book,
but he claims to be unconvinced by the
idea that flexible working will take hold
hat’s the worldview that has shaped
Canary Wharf. Iacobescu was in his
early forties when his boss, Paul
Reichmann, founder of Canadian
developer Olympia & York, sent him
Long Good Friday, the gangster film set in
the Docklands starring Bob Hoskins and
Helen Mirren. “I saw 500 years of history
along the Embankment and then I arrived
here, and there was nothingness,” Iaco-
bescu says. “I went back and I said, ‘Don’t
The government had promised to
extend the London Underground, but it
didn’t arrive until the millennium. In the
meantime, weighed down by debts,
Canary Wharf went bankrupt in the 1992
property crash. Reichmann managed to
another two years lobbying to get his
wife-to-be out, eventually resorting to a
successful hunger strike outside the UN
building in New York. A chance encoun-
ter at a party got him a job with Olympia &
York and set him on the way to London.

C
ously commuted in daily and the 950 and crater the demand for office space. from Toronto to London to investigate touch it.’ And Paul looked at me and said, buy it back with the help of powerful
people who live there can be seen on the “Working from home is a fad,” he the possibility of building on the barren ‘This is a once-in-a-lifetime opportunity. friends. It floated on the stock market in anary Wharf is an empire of 51
streets. Just 2 per cent of Canary Wharf’s declares. “No question, it was very good Docklands. This was the year of the Big So tell me how it’s going to look when it’s 1999, went through a takeover battle in buildings sprawling over 18 million
300 retail units are vacant, down from 8 in times of Covid. But we should be care- Bang, and the area had been designated finished.’ And I had to embrace all my 2004, then went private in 2015. That square feet. Canary Wharf Group,
per cent at the peak of the virus. Yet while ful that it doesn’t become a permanent an enterprise zone by Margaret Thatcher. inner contradictions.” year, Canary Wharf completed its Cross- which does not own all 51 buildings,
Bloomberg and Goldman Sachs, both in feature of life, because this is not the way Michael von Clemm, chairman of Credit Olympia & York, which had developed rail station; as with the Jubilee line, it still is valued at £4.8 billion. Rents have
the City, have been keen to get staff back cities have developed. There is a logic to Suisse First Boston, had told Reichmann the World Financial Center in New York, faces an agonising wait for the service. always been lower than in other prime
into offices, many of Canary Wharf’s big having an office. There is a culture, there he thought there was a good opportunity bought Canary Wharf in 1987. The first Former British Land boss Sir John Rit- parts of London; according to Savills, the
tenants have been more muted. top rent paid in Canary Wharf last year
“If I’m frustrated by something, it is was £56.50 per sq ft, compared with
the fact that captains of industry didn’t £81.25 for average prime City space and
take a stronger stand and say, ‘OK, let’s
come back to work’,” Iacobescu says.
“They should be much more forceful and
THE LIFE OF GEORGE IACOBESCU Gadget: “I’m not
a gadget guy”
Watch: Hublot,
WORKING DAY
Wakes at 7.30am
and has “one, two
£112 in the West End. Banks now account
for less than half its rental income, with
law and tech firms growing their share.
lead people back, because we can say VITAL STATISTICS pails of concrete Balzac engrave
engraved by or three coffees”. Iacobescu is keen to point out that Apple
whatever we like, and we can dream, but Born: November to the 10th floor of Drink: Campari Chelsea FC. “I Drives to the occupies two floors of one building. A
the reality is that coming back to work at 9, 1945 a building site and soda. “It’s like gave th
them advice Docklands for Mayfair-style members’ club is coming.
such a slow pace — there’s no question Status: married to Pay: undisclosed life — it’s bitter on how to build 9.30am. He Khan, who says he is “cautiously optimis-
the economy will be affected.” Gabriela. One Homes: Mayfair and sweet. In Italy, the new stadium” leaves work by tic” about a rebound in lettings, is spear-
We go for a walk. There are drinkers in daughter, Julie, and Tuscany it’s a little bit Charity: He
Charity 7.30pm but sits in heading a push into life sciences.
the bars and couples lounging in the neat and two Car: grey Maserati sweeter” suppor
supports his garden until Eight of the towers are residential,
social-distancing circles marked out on grandsons, “the Quattroporte, Film: the Netflix stude
students going 1am puffing on a with a mix of flats for sale and to rent.
the AstroTurf grass, although nobody two geniuses” — “but I’m changing series The Iacobescu likes a Campari to Oxford Montecristo 1935 Iacobescu has bought flats for his two
would mistake this for 2019. Iacobescu Oscar Cassius, 10, it for an electric Kominsky and soda at his home in Un
University Leyenda and young grandsons — one at the Shell Cen-
guesstimates that 25 per cent of people and Milo car. I haven’t Method, starring g Tuscany. He loves Leonard an
and the sending emails. tre on the South Bank, redeveloped by
are back. “You read about how desolate Maximilian, 8 decided which Michael Douglass Cohen and drives R
Royal Canary Wharf, and one in the Docklands.
everything is,” he says, gesturing towards School: Cantemir, yet, but certainly I and Alan Arkin a Maserati C
College of DOWNTIME Speaking about the children opens up
a chattering restaurant terrace. “If that’s Romania won’t buy a Tesla” Music: Leonard M
Music Reading the another rare vista of sentimentality: “I
a desolate place, it would be very nice to University: Favourite book: Cohen. “I have a La
Last weekend papers want both of them to have places where
have all the desolate places.” Bucharest La Comédie great affinity for ho
holiday: and shopping their grandfather worked. Even when we
Canary Wharf Group has been at the First job: carrying Humaine by his songs” Dubai with his wife. sail into the sunset, I want them to
harder end of the back-to-work spec- remember that it’s a part of their family.”

How Gupta’s biomass pipe dream went up in smoke

John Collingridge
An explosion rocked a tired
power station perched at the
mouth of the River Usk four
years ago, causing part of a
roof and wall to collapse.
Ordinarily, that would have
been the end of Uskmouth
power station in Newport,
south Wales, after more than
half a century burning coal.
But Sanjeev Gupta thought
differently. The industrialist
and trader had a plan for the
power station that, with a
generous dose of government
subsidies, would give it
another 20 years of life.
Simec, the energy business
that forms part of Gupta’s
sprawling GFG Alliance, had
bought Uskmouth in 2015 and
wanted to convert it from
burning coal to pellets made
from black binbag waste and
plastic, tapping into state
subsides for biomass.
Today that vision, like
many of Gupta’s schemes, is
in limbo. Biomass — organic
waste burnt as fuel — is going
out of fashion. Uskmouth’s
plans have been called in by
the Welsh government.
Gupta has left a trail of
havoc, with an AIM-listed
energy minnow unsure of
who to call its biggest
shareholder. And the GFG
empire is unravelling, amid
billions of pounds of unpaid
debts and an investigation by
the Serious Fraud Office.
Simec Atlantis Energy,
formerly Atlantis Resources,
the small listed company that
bought Uskmouth from
Gupta in 2018 and handed
him half its shares in return,
is trapped in a fight between
the disgraced tycoon and
creditors claiming his shares.
The unnamed creditor is
understood to be Transasia
Private Capital, a Hong Kong
lender, which hired
restructuring firm Borrelli
Walsh as receiver to seize
Gupta’s shareholding (since
diluted to 43 per cent). The
dispute stems from Gupta
pledging the shares as
security for a loan of about
£50 million from Transasia.
When he failed to repay, the
lender appointed receivers.
Gupta has gone to court to
fight the seizure of his shares.
Shares in Simec Atlantis,
which also develops tidal
power, have crashed 80% to
6.9p from a high last August,
valuing it at just £35 million.
The story of the binbag
power station is a window on
Gupta’s world, and the string
of bold but highly dubious
promises that saw him amass
an empire with 35,000 staff
round the world and revenues
of $20 billion (£14 billion).
Gupta’s masterplan was to
knit steel and aluminium
factories together with
renewable power generation,
giving a new lease of life to
tired industries. In Newport,
he planned to link the
220MW power station to his
neighbouring Liberty
steelworks, producing steel
with renewable energy.
He turned to an old friend
and business partner, Ravi
Trehan. Trehan’s Singapore-
based Aar Tee Group bought
the power station from
energy giant SSE in
December 2014.
Aar Tee then sold
Uskmouth in February 2015 to
Pentach, a company owned
by Gupta’s father, Parduman
— that was later renamed
Simec UK Energy Holdings.
But before being sold on by
Aar Tee, Uskmouth booked a
$7.2 million exceptional
charge, which it said related
to “costs incurred by SSE Plc
and balances written off”.
GFG declined to say how
much it paid for the power
station, but the price is
believed to have been about
£1 million. It was soon worth 2015 revaluation. People that can work. A deal was
much more than that. close to the business could struck with a Dutch company,
Shortly after buying not understand it. “There was N+P, to buy waste pellets to
Uskmouth, Gupta hired no credible plan that would burn, and it has said tests
American Appraisal, part of allow the plant to be re-lifed have been successful. But
consultancy Duff & Phelps, to as a biomass or clean power commercial operation
revalue it. The tired plant, plant,” said one. remains a distant prospect.
whose net assets had been Uskmouth is accredited to An expert said: “When you
valued by SSE at £4.5 million receive subsidies to burn burn plastic, you generate
in 2014, was suddenly worth biomass until 2037, but it acid — and that eats into your
$101.5 million in the April needs to prove it has a fuel boilers ... They thought they
GARETH IWAN JONES could do something that no
one else had done.”
Still, bearing the promise
of subsidies and that healthy
valuation, Gupta persuaded
Atlantis Resources to hand
over 49.9 per cent of its
shares in return for the
Uskmouth project, renaming
it Simec Atlantis Energy and
getting two seats on its board.
Simec Atlantis said it paid a
fair price for the power
station: “The price ... was a
significant discount to the
independent valuation we
had undertaken.” It insisted it
Sanjeev Gupta bought and revalued Uskmouth in Wales operates independently of
GFG. Simec Atlantis plans to
use carbon capture to trap
the station’s emissions, and
said it remains “fully
committed to the project”.
GFG said the revaluation
reflected “a fundamentally
new business plan converting
end-of-life waste into clean
green power”. It added that
the plan “foresaw the
creation of significant
shareholder value”.
There is much riding on
Uskmouth. Simec Atlantis
persuaded a clutch of small
investors to buy unsecured
bonds in energy projects
including Uskmouth,
promising 8 per cent interest.
It raised £3.8 million of bonds
on the Abundance peer-to-
peer platform in February
2020 — well short of its
£7 million target. The
brochure warned: “You may
not get back the money you
originally invested, or make
any return.”
6 The Sunday Times June 13, 2021
BUSINESS
We cooked
up success
in a crisis
Luxury kitchen-maker deVOL almost went bust in
the 2008 crash. A bold move to a historic mill HQ
changed perceptions – and lured A-list clients
HOW I MADE IT
PAUL O’LEARY
CO-FOUNDER OF
DEVOL KITCHENS
T
he 2008 financial crisis was
the making of deVOL Kitch-
ens, the upmarket designer
kitchen-maker favoured by
Hollywood stars such as Mila
Kunis and Ashton Kutcher.
Amid the fallout from the
crisis, the Loughborough-
based business almost went
bust as sales dried up. But it
clung on — and then, in 2012, founder
Paul O’Leary got a lucky break: he spot-
ted a 16th-century mill for sale at a knock-
down price — and transformed it into
deVOL’s new factory and head office.
“What we were selling was no better
than what we were selling 10 years ear-
lier, but, all of a sudden, we were [seen
as] successful because we had this beauti-
ful building,” said O’Leary, 57.
In the fickle world of home interiors,
image, it seems, counts for a lot. DeVOL’s
sales have risen from £500,000 in 2012 to
£16.1 million in 2020, with pre-tax profits
reaching £2.3 million. While both were
up only marginally on 2019 figures due to
coronavirus lockdowns, this year the
company expects to hit £25 million sales.
DeVOL designs rustic yet sleek kitch-
ens priced at an average of £30,000. Its
flagship product, the Real Shaker
APPOINTMENTS
Kitchen, takes its name from an 18th-cen-
tury religious and craft movement that
began in Lancashire and whose members
convulsed themselves during worship to
shake off impurities. DeVOL also sells
handmade and antique furniture.
All of a O’Leary was born near RAF St Maw-
gan, next to Newquay airport; his father
sudden was stationed there as an RAF officer. He
went on to Ratcliffe College in Leicester-
we were shire, a Catholic boarding school subsi-
dised by the RAF — but found the environ-
seen as ment stifling. “It was like a prison and I
couldn’t wait to leave,” he said.
being a O’Leary took a foundation course in
art and design, then a degree in industrial
winner design at Loughborough University —
“and that’s where I was born, as far as I
was concerned”.
He set up a design consultancy with a
fellow graduate from Loughborough,
running it for two years. A £30,000 profit
on the sale of a house tempted him to
move on, and he teamed up with two uni-
versity friends to set up a series of ven-
tures: first, buying and selling classic
cars, then restoring antique pine furni-
ture. The latter project failed when not a
single customer turned up to a yard sale.
Another, more successful, venture was
stripping pine doors for £5 each.
“Between us, we stripped 10,000 doors.
It was a very messy business but we had
cash in our pockets,” said O’Leary. With
the door-stripping, though, he failed to
scratch his entrepreneurial itch.
In 1989 came deVOL Kitchens, which
he founded with Philip de Vries, the
“deV” in deVOL. The first piece of furni-
ture they made was a pine Welsh dresser
for O’Leary’s mother. Despite her posi-
TIM COOPER/DEVOL KITCHENS
Boosted by its tive feedback, the business was not an ing the company on Instagram — the busi-
relocation to overnight success. “We couldn’t afford to ness has grown strongly. It is run day-to-
Cotes Mill, right, pay the rent most months and the land- day by Robin McLellan, 36, who joined on
and the backing lord was always coming around to shout a student placement in 2006 and now
of stars such as at us,” O’Leary said. owns 10 per cent. O’Leary retains the
Ashton Kutcher Still struggling to make ends meet after remainder. DeVOL employs 250 people.
and Mila Kunis, ten years in business, de Vries wanted With McLellan focused on the day-to-
Paul O’Leary’s out. Now in sole charge, O’Leary decided day, O’Leary is free to work on product
deVol Kitchens to move the business from “a 3,000 sq ft design and new ventures, including
has gone from warehouse down an alleyway” to a small Shreddies, a start-up that sells flatulence-
famine to feast shop in the neighbouring Leicestershire filtering underwear. He has also spent the
village of Quorn. past year shooting an eight-episode
“All of a sudden, this pretty little shop series on kitchen design that is scheduled
in a nice village, which had affluent peo- to air on Discovery Plus from July.
ple driving past dropping off their kids at He hopes the TV show will begin to
the private schools, [meant that] the make deVOL a household name in Amer-
phone started ringing. People with ica, although he is more interested in sell-
nice houses and big budgets suddenly ing add-ons than full kitchens. “We know
wanted me to come and measure up that selling 100 kitchens a month in
their kitchens.” the US is not something we’re
Still a modest-sized business in geared up for at present,” he said.
2008, ticking over with 15 employees “So we’re hoping that we’re going
and turnover of £300,000, deVOL to be able to sell more of our ancil-
did not have deep reserves when the lary products, like sinks, taps,
financial crisis hit. “We nearly went tiles and lighting.”
under,” said O’Leary. “I would lie O’Leary, who is in a relation-
awake at night rehearsing my speech ship with deVOL’s creative
to the staff.” director, Helen Parker, said
To his surprise, the company sur- entrepreneurs should never fear
vived. So he went all in. “I decided to failure. “If you fail, you’re just
run my business with zero fear — not going to be broke and that’s not
to worry about what might go wrong.” the end of the world — you can
When, in 2012, he saw that Cotes just start again.”
Mill, a grade II-listed 16th-century Hannah Prevett
building on the River Soar, was up for Deputy Editor,
sale, he realised the potential. “It was on Times Enterprise Network
the market for six years — nobody wanted
it because of the financial crash,” said
O’Leary. Three previous buyers had
pulled out.
News, inspiration and
Having scraped together £300,000 advice for business
T leaders on how to run
“by hook or by crook”, he persuaded his
bank, Lloyds, to lend him the remaining
£700,000 he needed. “I had no money to and grow their
pay the bills, no money to do it up and no companies as the
money to pay the next month’s wages.
But I did it anyway.” The firm opened in economy recovers from
its new home the following January and the impact of the
the gamble paid off immediately. “As
soon as we opened the mill, dozens of
coronavirus
people were coming in looking around
this beautiful building and grounds.”
Helped by favourable press coverage,
as well as endorsements from celebrities
SIGN UP NOW AT
such as Kutcher and Kunis — who got THETIMES.CO.UK/NEWSLETTERS
deVOL to do their kitchen in LA after see-
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The Sunday Times June 13, 2021
BUSINESS
Oliver Shah
BT faces a decision: does it let the
French fox into the hen house?
‘G
igabit-capable
broadband”, “levelling up
agenda”— it’s nice of PR
firm Tulchan, where
former Tory Party
chairman Lord (Andrew)
Feldman is managing
partner, to teach a visiting
Frenchman a few key English phrases.
Billionaire telecoms tycoon Patrick
Drahi arrived on BT’s shareholder
register last Thursday signalling that he
came in peace, issuing a statement that
ticked political boxes and reassured the
management team he was supportive.
Drahi’s private comments are said to
have matched his public ones. But more
telling than what he said is what he did:
he pulled off an elaborate stealth raid to
buy 12.1 per cent of the former state
telecoms monopoly before the market
realised what was going on. That 12.1 per
cent is 0.04 per cent more than the
12.06 per cent owned by Deutsche
Telekom, now eclipsed as BT’s biggest
investor. While Tim Höttges, Deutsche’s
chief executive, is said to have reacted
with amusement, those four basis points
say something about Drahi’s personality.
A red-hot housing market
adds fuel to the inflation fire
David Smith Economic Outlook
T ‘A
here was a time, before
everything went a bit bonkers,
when an article about house
prices was box office. Maybe it
is time to relive those days, at
least for a while, because the
housing market is showing
plenty of signs of exuberance,
which some see as dangerous.
Most measures have the rate of house-
price inflation close to, or above, 10 per
cent. Halifax has the rate at 9.5 per cent
in the year to May, and Nationwide at
10.9 per cent in the same period, while
the official measure from the Office for
National Statistics is 10.2 per cent in the
year to March. Bear with me and I shall
show that parts of the country are
experiencing even more spectacular
price rises.
This is not just about a particular
sector of the economy. Andy Haldane,
who will be stepping down shortly as the
Bank of England’s chief economist,
recently described the housing market
as “on fire”, with price rises generating
further inequality — including inequality
between the generations. Haldane sees
roaring house prices as part of a more
general prices problem that risks letting
the inflation genie out of the bottle.
He is not the only one to worry. Writing
for Bloomberg, Lord (Mervyn) King, the
former Bank governor, said that central
banks, including the Bank of England,
have “painted themselves into a corner”.
As he put it: “Support for monetary
policy as the way to combat inflationary
risks is declining. Over the next few years,
governments will probably want to spend
more, but won’t want to increase taxes on
most citizens. Higher interest rates, or a
shrinking of central-bank balance sheets,
will make it more difficult for
governments to finance their deficits.
Inevitably, there’ll be political pressure
on central banks to respond slowly to
signs of higher inflation.”
More on that in a moment. But what
of house prices themselves? Some of
those regional increases are spectacular.
The e.surv-Acadata monthly index,
which uses Land Registry data, had
annual house-price inflation at 11.7 per
cent in April, or 15 per cent excluding
London and the southeast. The biggest
annual rise over the past three months
was in the northwest, up 15.7 per cent.
The Royal Institution of Chartered
Surveyors (Rics) noted in its latest
residential market survey, for May, that
the disparity between housing demand
and supply was driving prices higher,
with no sign of an easing up. Estate
agents are suffering from a lack of new
instructions to sell amid strong demand
from buyers.
The house-price boom is testimony to
the power of government intervention.
Rishi Sunak’s stamp duty cut, first
announced in July last year and
extended in his March budget, has
significantly boosted both prices and
activity. The furlough scheme, now
winding down, appears on course to
achieve its central aim — of preventing a
big surge in unemployment. Home
buyers, meanwhile, have little fear of
sharply rising interest rates.
Lower transaction costs (the stamp
duty cut), a benign unemployment
outlook and cheap borrowing have
They are a flash of ego — of a liking for
throwing down gauntlets. The founder
of Altice, a broadband and cable TV
empire with 75,000 staff and more than
40 million customers, came onto the
scene dressed in a cuddly outfit — but he
is a fox, and BT should be on guard.
Drahi, 57, the Moroccan-born son of
maths teachers, is a sophisticated deal-
maker and builder of businesses.
He sold an early French venture to
John Malone, America’s “cable cowboy”,
using some of the proceeds to found
Altice in 2001. He grew it aggressively,
winning a €17 billion bid war in 2014 for
SFR, one of France’s biggest mobile
phone companies, despite protests from
government officials. The SFR deal
exemplified Drahi’s debt-fuelled model
of buying companies with poor cashflow
and cutting costs to juice up profits.
Shortly after the takeover, Altice told
SFR suppliers to halve their prices. It
suspended contracts with several; union
leaders claimed there were shortages of
printer paper and toilet rolls.
Drahi bought a 70 per cent stake in US
cable operator Suddenlink a year later,
valuing it at $9.1 billion, and took over
The next months
will be a time of
great nervousness
for those worrying
about prices
provided a potent brew. Respondents to
the Rics survey reported “frenetic”
efforts to beat the stamp duty deadline,
though some are getting ready for an
easing in the second half of the year.
This is because one of these elements
is soon to come to an end. The full stamp
duty cut (no duty for most on purchases
up to £500,000) lasts only until the end
of June and will be phased out in
reduced form by September 30.
At one time, housing market analysts
thought the combination of the end of
the stamp duty cut and a post-furlough
rise in unemployment would lead to
house-price falls. I never thought that,
but it is reasonable to expect house-price
inflation to start to come back down to
earth when the stamp-duty incentive to
bring forward purchases is no longer
there. That does not mean falling prices,
but it should mean an easing of the pace
at which they are rising.
Is housing part of a more general
HOUSE PRICE INFLATION HAS TOPPED 10% …
UK average house price
15 Annual % change
10
5 Indeed it is. According to the OECD,
0 economies — the lion’s share of the world
-5
-10
-15
-20
2007 09 11
Source: ONS
… AS MORTGAGE LENDING SOARS
Monthly approvals
120,000
100
80
60
40
20
0 still look more like a “V” than any other
2017 2018
Source: Bank of England
BT’s broadband push (millions of premises)
Old plan
2021-22 2.4
2022-23 2.4
2023-24 2.4
2024-25 2.4
2025-26 2.4
2026-27 2.4
2027-28 1 Those talks fizzled out, and it’s not clear
Estimates derived from company disclosure.
Source: Enders Analysis, company reports
Cablevision for $17.7 billion soon after.
Drahi has said he has no intention to
bid for BT, and there is no reason to
doubt him — not least because a French
takeover of a nationally sensitive asset
would go down like a stale croissant
while Emmanuel Macron is rattling his
sabre over Northern Ireland. But you
shouldn’t think Drahi would be daunted
by BT’s £19 billion market cap; four years
ago, he toyed with a $185 billion bid for
Charter Communications, America’s
second-biggest cable group. An art
inflation problem? Inflation is going up,
and the only question is by how much
and for how long. The next few months
will be a time of great nervousness for
those who worry about this.
Apart from a rise in consumer price
inflation to above the official 2 per cent
target, and perhaps to 3 per cent before
the end of the year — US inflation last
week hit 5 per cent — there will be
further evidence of price pressure in raw
materials and fuel. Crude oil prices this
time last year were off their lows, but
Brent crude now, at more than $70 a
barrel, is nevertheless up by 74 per cent
over the past 12 months.
Those who are worried about a wage-
price spiral, and that includes Haldane,
will have ammunition in the expected
jump in annual average earnings growth
to 7 or 8 per cent very soon — something
we have not seen this century. The
calculations on this are straightforward.
Even if average earnings were just to stay
at their January-March level in the
current April-June quarter, they would
show an annual rise of 6.8 per cent. It
would not take much to push annual pay
growth above 7 per cent.
Most of that will reflect base effects —
comparisons with depressed levels a
year ago — and furlough distortions,
which should drop out over time. There
is a good chance, using similar
arithmetic, that by September, annual
growth in average earnings will be back
down to 2 or 3 per cent.
For average earnings, for house
prices, and in time for consumer price
13 15 17
2019 2020
collector, he forked out $3.7 billion for
auction house Sotheby’s in 2019.
New plan The fox has been sniffing around the
2.7 BT hen house for some time. Drahi has
known Clive Selley, the head of BT’s
3.5 Openreach broadband network, for
4 years — and, in 2019, he visited Philip
Jansen, then newly installed as BT chief
4
executive, in London. He offered to help
4 BT with its full-fibre broadband roll-out,
2.2 pointing out that Altice had experience
plugging in millions of homes a year.
why Drahi waited until now to pounce —
BT’s shares, which traded at almost
500p in 2015, slumped to less than 100p
last year amid pessimism over its
chances of getting a decent settlement in
the next market review by regulator
Ofcom. They had risen to 192p by Friday.
Drahi is thought to have begun
building a 2.9 per cent stake, below the
public-disclosure threshold, about three
months ago. He then struck last week,
buying more through Morgan Stanley
and BNP Paribas from multiple sellers,
borrowing some and using derivatives.
Senior Morgan Stanley bankers Jean
Abergel and Franck Petitgas, the latter
inflation, the prospect is for a temporary
or “transitory” boost, followed by a
return to more normal levels. This, in
other words, is a “don’t panic” moment.
That is not as comforting as it sounds,
however. As King noted, there remain
inflation risks in the medium term,
which central banks should be
concerned about.
There was case for proceeding
cautiously after the global financial
crisis, when growth was fragile and often
tentative, but there is no case for that
now. The post-pandemic party has
started and the Bank and other central
banks should be giving serious thought
to removing some of the emergency
support, including record low interest
rates and the lashings of quantitative
easing provided during the crisis.
Whether they will do so is another
matter.
PS
Talking about post-pandemic recovery,
you may remember that early in the
Covid crisis, there was a big debate —
among economists at least — about the
shape of recession and recovery. Would
it be a “V” shape, a “W”, an “L”, a “U”, a
saxophone, square root, or something
even more exotic?
I was always a V-shaper, arguing that
what was driving the economy down —
lockdowns and voluntary changes in
behaviour — would also drive it up as
these actions changed. But then things
went a bit wobbly in this country with
the second wave and lockdowns two and
three, which the government at one time
said it would strive to avoid.
That striving last autumn, seeking to
avoid a lockdown, seems to have done a
lot more harm than good.
It was gratifying, therefore, to hear
Fathom Consulting, the economic
consultancy, declare: “The global V-
shaped recovery is now complete.”
gross domestic product for the G20
economy –—got back to pre-pandemic
levels in the first quarter of this year.
That adds up to a swifter rebound for the
global economy than is the norm and
underlines the unusual nature of the
pandemic recession and recovery.
Among the G20 economies, China,
19 21 India and Turkey were already above
pre-pandemic levels before the end of
last year, and Australia, South Korea and
Brazil got there in the first quarter. Most
other G20 countries are still below pre-
pandemic levels — though not by much.
This leaves the knotty problem of the
UK. All measures show the economy
recovering well, including the Office for
National Statistics’ timely measures. But
according to the OECD, the UK— 8.7 per
cent below pre-pandemic levels in the
first quarter — was the G20 country with
the most to catch up.
That catch-up is now happening,
April’s 2.3 per cent monthly rise in GDP,
following a strong increase in March, left
it only 3.7 per cent below the levels in
February 2020.
The UK recession and recovery will
letter — albeit a rather messy one. That
2021 fits rather well.
david.smith@sunday-times.co.uk
awarded France’s Légion d’Honneur in
2012, have been advising closely.
It’s reasonable to believe Drahi when
he says he’s supportive of BT’s direction.
The FTSE 100 giant appears to be doing
the right things at a pivotal moment.
After a green light from Ofcom in March,
it upped its target for full-fibre
broadband expansion to 25 million
premises by December 2026. It is pulling
out of peripheral businesses and
benefited from the recent triennial
revaluation of its pension scheme.
Drahi is said to have considered other
ways to play in UK broadband —
including by buying outright one of
the“altnets” competing with BT, such as
CityFibre — but decided that BT is likelier
to be the long-term winner.
That’s all to the good. Yet BT’s board
would be wise to treat their new ami
with caution. French corporate history is
littered with examples of tycoons buying
substantial minority stakes in listed
companies and treating them as
personal fiefdoms. Drahi may well
understand that UK corporate
governance differs from the French
model as much as restaurant etiquette.
Welcome to a less
globalised world
Irwin Stelzer American Account
merica is back,” President
Biden travelled to Cornwall
to say. After four years in
which Donald Trump
heaped scorn on one-time
allies, Joe Biden wants their
approbation at minimum
and affection if possible.
The president is a man who, his fans
claim, can contain multitudes. His critics
see a man who has no idea of the
contradictions when he attacks Britain
for cruelly driving his Irish ancestors to
America — a land of such limited
prospects that their descendant could
rise no higher than president — and then
plays FDR to Boris Johnson’s Churchill
by signing an “Atlantic Charter” setting
out areas in which they will co-operate
to rebuild a post-pandemic world that
will halt climate change.
The contradictions continue when
Biden proclaims his devotion to a
revived internationalism, while at the
same time launching a huge programme
of deglobalisation. You remember
globalisation: businesses would create
intricate supply chains linking the best
of every country into a super-efficient
machine that would increase economic
growth and welfare. Nations would beat
their domestic ploughshares and other
products into international mergers that
would combine low-cost labour with
high-value financial management.
Alas, reality intruded. Yes, there were
benefits, especially for China, a nation
with a huge dollar-a-day workforce
against which higher-paid American
blue-collar workers could not compete.
US factories were shut, communities
devastated, workers displaced.
Meanwhile, bankers and financial
architects spread their talents over
global rather than merely domestic
enterprises, and prospered mightily.
And brought us Trump, who seems to
have been alone in sensing the
resentments aroused by globalisation.
Now, globalisation is over — America
has decided to disentangle itself from
the global economy. Last week, the
supposedly hopelessly divided Senate
passed the US Innovation and
Competition Act by a vote of 68-32. It
would commit $250 billion (£175 billion)
over five years to decoupling from China
— and, if successful, end US dependence
on everything from chips to robots to
rare-earth metals, rerouting supply
chains that run through China. If the
House goes along, this will be a start on
the road to matching China’s subsidies.
Biden burnished his “I-am-not-
Trump” credentials by ending the ban
on TikTok and WeChat, but then issued a
broad order to government agencies to
review all apps owned by America’s
adversaries to determine whether they
are threats to national security, and
expanded restrictions on US
investments in Chinese companies with
ties to the regime’s military.
China, of course, is a special case — a
country that is challenging America for
world leadership and, say sources in the
Pentagon, preparing a military takeover
of Taiwan — the home of Taiwan
Semiconductor Manufacturing (TSMC),
source of most of the world’s most
sophisticated chips. In a move to
deglobalise the chip business, TSMC has
7
Or he may not. He may prove to be
mercurial: a 2018 Financial Times profile
noted that he could be “a buyer in the
morning and a seller in the evening”.
For the moment, Drahi agrees that
Openreach should remain a wholly
owned BT subsidiary. Were he to change
his mind on a big issue like that, things
could get difficult. And even if it all
works out, it’s not clear how Drahi
eventually exits such an illiquid stake.
BT’s board, which meets this week,
faces an obvious early decision: does it
offer Drahi a board seat? It would seem
strange not to, given that Deutsche
Telekom has one. But might BT’s
directors withhold the offer for now to
preserve some leverage? Despite cordial
calls last week, Drahi has not yet asked
for one. Nor has he been offered one.
And if he gets a seat, what will the
dynamic be like with Deutsche?
The issue will become more pressing
as chairman Jan du Plessis prepares to
step down in October or November. BT is
right to welcome its new backer publicly
— it is the only sensible thing to do — but
it should keep a watchful eye on its hens.
oliver.shah@sunday-times.co.uk
agreed to build a $12 billion chip
fabrication plant in Arizona, and
Samsung a $10 billion facility in Texas.
However, deglobalisation is prompted
by more than national security
requirements. It turns out that in many
industries, economies of scale do not
extend beyond America’s or any nation’s
borders. Most of the big banks in the US
have found there are more costs than
profits in globalising their retail
businesses. Jane Fraser, Citigroup’s new
chief executive, is retreating from
consumer banking in 13 countries in
Asia, Europe and the Middle East.
Britain’s HSBC and Spain’s BBVA are
selling their unprofitable US businesses
to American competitors.
Boeing must also be rethinking its
globalised design and production
process. British design expert Stephen
Biden ended the
ban on TikTok,
then did a review
of foreign apps
Bayley points out that the company’s 787
Dreamliner depends on suppliers in the
UK for engines, France for passenger
doors, Germany for cabin lighting, Italy
for stabilisers, Japan for wings, Sweden
for cargo doors. He argues that this
complicated supply chain led to the
“damaging delays and loss of corporate
responsibility” that have blighted
Boeing’s performance.
There are, after all, limits to the
managerial skills of the best and the
brightest. Neither Warren Buffett, whose
talents have been spread over
businesses from soft drinks to insurance
and energy generation, nor his Brazilian
partner 3G Capital seem to have realised
that Kraft Foods had a portfolio of tired
brands when they financed its
$49 billion merger with Heinz in 2015.
There will, of course, always be areas
in which the benefits of globalisation
exceed the costs. But we are in an age in
which maximising domestic jobs and
minimising dependence on fragile
supply chains and foreign adversaries
are paramount policy goals. And in
which the social and electoral
consequences of globalisation are more
fully understood than in the glory days
when Tom Wolfe’s Masters of the
Universe bestrode Wall Street and the
globalised economy like colossi.
irwin@irwinstelzer.com
Irwin Stelzer is a business adviser
8 The Sunday Times June 13, 2021

BUSINESS

Anna Menin
JASON ALDEN/BLOOMBERG VIA GETTY IMAGES

American firms’ magic cousins will cause headaches

medicine for lawyers
Junior lawyers are burning
out working 15-hour days at
home. In other parts of the
City, employers are trying to
placate stressed-out staff
with free Peloton exercise
bikes and afternoons off. In
law, American firms based
here are prescribing their
favourite medicine — money.
Milbank, which used to
advise the Rockefellers and
more recently worked on the
Thomas Cook restructuring,
last week raised its starting
salary for first-year associates
around the world by $10,000
to a whopping $200,000
(£140,000) from July, with
other associates getting up to
$15,000 more depending on
their class year. That widens
for the heads of the Magic
Tesco, has told Airbus he’s
had a better offer and is Caring pats his FUNNY BUSINESS
Circle firms, including joining a financial services
pockets at Bill’s
Linklaters’ Aedamar
Comiskey, 54, appointed last
company instead. Hardie
says: “My decision was in no Fans of dad jokes struggle to
month. Bidding wars for top way a reflection on the hold back when the bill
the gap with impecunious talent have intensified in Airbus job, but sometimes arrives at Bill’s. But the
Magic Circle juniors, who get recent years, and last week’s other opportunities come hearty all-day restaurant
by on up to £100,000. raises will up the ante. along and you have to do chain, part of 73-year-old
American rivals including “Being able to say to what is right for your future.” tycoon Richard Caring’s
Cadwalader and McDermott someone, ‘We’re going to pay In six years, the Airbus UK empire, has discovered it’s
Will & Emery were quick to you £50,000 more to do the role has been downgraded not all fun and games when
follow suit, while Davis Polk same hours’ is a pretty easy from chief executive to the time comes to pay.
& Wardwell bumped up pay way of getting talent from the president to senior vice- In March, Bill’s disclosed it
for its first-years to $202,500. Magic Circle,” observes one president to head of public had breached the terms of an
In response, McDermott re- London-based lawyer at a US affairs. Hardie’s change of overdraft facility, while
raised pay for the second firm. And it may ease the heart makes post-Brexit auditor BDO warned that
time in 48 hours to match pain of those 15-hour days. reconciliation that bit Covid could cause material
Davis Polk (petty, much?). trickier: the UK is trying to uncertainty that “may cast
Meanwhile, Weil, Gotshal & rebuild relations with the significant doubt on the
Manges is doling out one-off Airbus boss is no pan-European aerospace company’s ability to
bonuses of up to £50,000 to
its lawyers — in line with longer a remainer giant that makes its wings in
north Wales. Awkward.
continue as a going concern”.
Bill’s said that while Caring
pandemic payouts by other
US firms, but far more
It looked like a marriage
made in heaven, or at least
had offered to stump up
more cash, he hadn’t made TWITTER POLL
generous than British rivals. Toulouse: the deputy any binding commitments.
Yes No
This latest round of director general of the pro- Now, Caring’s commitment
largesse from their American

6 What do you do when your discount retail chain stays open

Aedamar Comiskey, senior partner of Linklaters Remain CBI joining that
beacon of European
may be put to the test: an
owner of London’s Westfield 72% 28%
JUST SAYING . . .
collaboration, Airbus. centre is suing for unpaid
and makes bumper profits in the pandemic, and also receives Josh Hardie’s appointment rent. Prufrock understands
an estimated £45 million of business rates relief? Do you order as UK figurehead of the the sum is substantial.
it to give the money back to the Treasury? Don’t be silly!
You spend almost the exact same amount on a 5,000-acre
If this comes to pass, it will be one of plane-maker, replacing
Katherine Bennett, was
Bill’s says it will be “happy
to come to come to an
estate in West Lancashire. Tom Morris, secretive founder of the most fundamental innovations announced in April to much arrangement with Westfield,
Liverpool-based Home Bargains, is spending up to £50 million fanfare. It was all going as ... all the thousands of
buying the Halsall Estate from the Church Commissioners.
in the history of central banking. It swimmingly — until Hardie, hospitality businesses in the Goldman Sachs is making
Morris, 67, worth an estimated £4.4 billion, shared in a will move us into a new era 49, jilted Airbus at the altar. UK are trying to do with their US staff disclose their
£15.8 million dividend last year as sales rose by 13 per cent. Prufrock hears that Hardie, own landlords”. Covid vaccine status ahead
He wants to work with local farmers at Halsall to “grow and The Bank of England’s Andrew Bailey on who before heading policy at It sounds like the two sides of a return to the office.
promote British produce”. Might the generous inheritance tax the prospect of central banks developing the CBI was group corporate are unlikely to be swapping Should employers be able
relief attached to agricultural land also have appealed? digital versions of existing currencies responsibility director at Rent battle: Richard Caring Limoncello shots and hugs. to do this? @ST_Business

DATABANK
INSIDE THE CITY JOHN COLLINGRIDGE THE WEEK IN THE MARKETS THE ECONOMY
FTSE 100 FTSE 100 DOLLAR

7,134.06
Consumer prices index current rate prev. month

Grand plans London’s congestion charge, described it as “in the red USD > GBP
1.5% 0.7%
$1.41
tells you much: it resembles a zone on the bolloxometer”. 7,500
down escalator. The shares Lewis has also tried to
fall short in
CPI including housing current rate prev. month
are trading at 40.72p, giving it make Capita a “purpose- 7,000
a value of £686m. They were driven business” by putting
0.00
12-month high: $1.42 1.6% 1.0%
low: $1.23

Capita’s 280p when Lewis joined. two employees on its board — Retail prices index current rate prev. month
6,500
Outsourcing has been a worthy, but hardly likely to
U65.02 H: 7,134.1
EURO
EUR > GBP
2.9% 1.5%
hard place to make a living for set the share price on fire. 6,000
false dawn €1.16
U0.92 L: 5,577.3 Average weekly earnings on prev. monthon last year
several years, but Serco has The numbers make for
restored its dividend and better reading than Lewis’s 5,500 £562 V 0.5% U 1.5%
Mitie turned aggressor with a window dressing — even if the FTSE 250 0.00

22,734.13
2020 2021 12-month high: €1.18 Unemployment current rate prev. month
Investors in Capita could be deal for Interserve’s facilities story still is not good. While low: €1.08
forgiven for thinking it’s management business. net debt has been cut from
Source: Thomson Reuters Eikon 1.62m 4.8% 4.9%
RISERS FALLERS YEN
groundhog day. Meanwhile, Capita, one of the the £1.8 billion reached under YEN > USD
Manufacturing output on the year on last month
Thungela Resources 158p U 25.9% on dip IWG 305p V 16.8% on profit warning

¥109.65 39.7% V0.3%

First there was “Simplify, government’s big suppliers, is former boss Andy Parker, it is U
buying Auto Trader 621p U 11.3% on strong Hochschild Mining 179.5p V 9.9% on
Strengthen, Succeed”. still in the doldrums. still high at £1.1 billion. results Paragon Banking 555.5p U 9.6% on instability in Peru Rank 178.2p V 9.7% on Retail sales on the year on last month
Unveiled in 2018 by new chief Investors and analysts have Meanwhile, revenues fell record profits Oxford BioMedica £12.46 U sentiment Chemring 294.5p V 8.5% profit U0.16
Jon Lewis, the strategy was lost track of how many of 9 per cent to £3.2 billion last V98.60 H: 22,933.3 9.3% on sentiment BT 191.8p U 8.4% on taking Aston Martin Lagonda £19.70 V 8.5% 12-month high: ¥110.71 U 42.4% U9.2%
coupled with a deeply Lewis’s grand plans have year, amid the ravages of V0.43% L: 16,802.7 Altice taking stake on sentiment Source: Sharepad/AJ Bell low: ¥102.72
UK trade latest 3 mths prev. 3 mths latest 12 mths
discounted £701 million rights failed to materialise or fallen Covid, and profits were down OIL
issue and £300 million of short. The sale of its ESS 67% at £65.2 million. DOLLARS/BARREL
balance (£bn)
-3.76 -9.6 -13.03
planned disposals.
Now there is “Future
Capita”, his plan to simplify
education software business
to private equity raked in
£300 million, far less than the
Where Lewis, 59, has
succeeded, though, is in
downsizing the company—
DOW JONES
34,479.60
HANG SENG
28,842.13
FTSE EUROFIRST
1,763.78 $72.65
U0.76
Gross domestic
product
latest quarter prev. quarter annual change

V 1.5% U 1.3% V 6.1%

V276.79 H: 34,777.8 V75.97 H: 31,084.9 U21.66 H: 1,763.8 12-month high: $72.65 Budget deficit last month prev. month year to date
the outsourcer (again) into market had expected. those revenues compare to V0.80% L: 25,015.6 V0.26% L: 23,235.4 U1.24% L: 1,323.9
-31.7 -26.3 -31.7
low: $37.46 (PSNB) in £bn
two core divisions focused on When “Future Capita” was £4.9 billion in 2016, and staff
the public and private revealed in March, an analyst numbers have been cut from NASDAQ SHANGHAI SENSEX GOLD
14,069.42 3,589.75 52,474.76 DOLLARS/TROY OZ

$1,876.64
sectors, flog £400 million 70,000 to 55,000. He expects
worth of businesses and save Capita organic growth to return this U254.93 H: 14,138.8
U1.85% L: 9,492.7
V2.10 H: 3,696.2
V0.06% L: 2,890.0
U374.71 H: 52,474.8
U0.72% L: 33,228.8
10-YEAR BOND YIELDS %
£50 million a year. year, not a moment too soon.
V13.33
As Lewis has been at pains For a quick fix, the only
to point out, he inherited a
800p
hope is that a buyer with
S&P 500 CAC 40 ALL ORDS 12-month high: $2,063.19
low: $1,681.24
variation 12 months

basket case that had been deep pockets turns up

4,247.44 6,600.66 7,577.20 high low

U17.55 H: 4,239.2 U85.00 H: 6,600.7 U33.90 H: 7,577.2 BITCOIN UK 0.71 V0.08 0.90 0.08
inflated by a string of poorly 400 thinking they can do a better DOLLARS
U0.41% L: 3,002.1 U1.30% L: 4,569.7 U0.45% L: 5,830.0
integrated acquisitions. But
the time for blaming his
predecessors has passed.
0
job through dismembering
Capita — something I suspect
Lewis would not be unhappy
NIKKEI
28,948.73
DAX
15,693.27
S&P TSX
20,138.35
$36,969.89
V161.91
US

JAPAN
1.45

0.03
V0.11

V0.05
1.75

0.17
0.51

0.01
The share price chart of 2015 2020 to see. He is running out of U7.21 H: 31,084.9 U0.37 H: 15,693.3 U109.15 H: 20,155.9 12-month high: $63,398.46
low: $8,943.17 GERMANY -0.27 V0.06 -0.11 -0.64
the company, which handles Source: Thomson Reuters Eikon time to deliver. Avoid. U0.02% L: 21,529.8 0.00% L: 11,556.5 U0.54% L: 15,050.9 Price at 9.30pm Friday

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Market cap ranking Price Change 52-week Mkt Cap Market cap ranking Price Change 52-week Mkt Cap Market cap ranking Price Change 52-week Mkt Cap Market cap ranking Price Change 52-week Mkt Cap
Yield P/E Yield P/E Yield P/E Yield P/E
V on week high low (£bn) V on week high low (£bn) V on week high low (£bn) V on week high low (£bn)
43 3i 1247.0 -5.0 1282.0 788.0 3.1 6.5 12.1 7 Diageo 3434.0 +38.0 3460.0 2440.0 2.1 71.7 80.3 144 IWG 305.0 -61.5 383.6 222.6 0.0 N.A 3.1 91 Royal Mail 590.2 -0.8 606.4 157.5 1.7 9.6 5.9
166 3I Infrastructure 303.5 -3.0 314.0 272.0 3.2 13.1 2.7 131 Diploma 2838.0 -58.0 3024.0 1711.0 1.5 68.5 3.5 93 J Sainsbury 252.3 -13.1 269.8 179.2 4.2 N.A 5.7 186 RWS 575.0 -65.0 747.0 523.0 1.6 41.6 2.2
149 Abcam 1327.0 -40.0 1719.0 1149.0 0.0 N.A 3.0 119 Direct Line Insurance 296.8 -1.9 342.0 263.5 7.4 11.6 4.0 57 JD Sports Fashion 917.2 -17.0 949.0 592.2 0.0 39.8 9.5 134 S4 Capital 624.0 +37.0 625.0 240.0 0.0 N.A 3.4
62 Admiral 3067.0 +12.0 3208.0 2240.0 3.9 18.0 9.1 102 Dr Martens 501.5 -1.5 514.8 442.0 0.0 57.6 5.0 162 Jet2 1279.0 -24.0 1564.5 624.0 0.0 N.A 2.7 75 Sage 658.4 +2.2 765.4 558.6 2.6 31.0 7.1
187 Aggreko 861.5 -2.5 895.0 353.6 1.7 N.A 2.2 86 DS Smith 445.3 +20.0 445.3 252.7 0.9 30.7 6.1 87 Johnson Matthey 3137.0 -53.0 3300.0 2043.0 2.2 29.5 6.1 56 Schroders 3550.0 -33.0 3665.0 2603.0 3.2 20.6 9.5
154 Airtel Africa 77.0 -2.1 96.1 52.3 N.A 12.1 2.9 153 Dunelm 1438.0 -41.0 1561.0 1133.0 0.8 26.7 2.9 54 Just Eat Takeaway.com 6491.0 +80.0 9980.0 6150.0 0.0 N.A 9.7 32 Scottish Mortgage IT 1243.0 +16.0 1415.0 726.0 0.3 2.0 17.6
141 Alliance Trust 983.0 +10.0 986.0 755.0 1.5 13.7 3.1 115 Easyjet 958.4 +24.4 1095.0 470.7 0.0 N.A 4.4 74 Kingfisher 341.5 -3.2 376.4 195.4 2.4 12.2 7.2 42 Segro 1081.5 +21.0 1086.5 853.2 1.8 9.0 13.0
196 Alphawave IP 315.0 +10.5 380.0 287.0 N.A 219.3 2.1 107 Electrocomponents 1012.0 -15.0 1099.0 637.5 1.6 37.0 4.8 98 Land Securities 712.4 -3.8 750.6 489.1 3.0 N.A 5.3 84 Severn Trent 2502.0 +33.0 2589.0 2168.0 4.1 28.2 6.3
14 Anglo American 3147.0 -107.5 3408.5 1768.8 2.2 26.8 42.9 47 Entain 1803.5 +70.5 1803.5 664.6 0.0 115.4 10.6 34 Legal & General 278.3 -0.8 296.4 178.0 6.3 13.3 16.6 179 Shaftesbury 610.0 -7.0 669.0 420.0 0.3 N.A 2.3
39 Antofagasta 1529.0 -36.5 1925.0 855.0 2.5 42.8 15.1 61 Evraz 638.0 -11.4 698.2 278.8 5.5 15.6 9.3 18 Lloyds Banking Group 48.4 -0.5 50.0 24.0 1.2 40.6 34.3 41 Smith & Nephew 1546.0 +45.0 1674.0 1336.5 1.0 43.0 13.6
155 Ashmore 405.0 +17.2 479.6 342.6 4.2 14.4 2.9 23 Experian 2714.0 +52.0 3171.0 2273.0 1.2 43.8 25.1 13 London Stock Exchange 7724.0 +146.0 9910.0 6914.0 1.0 64.9 43.0 82 Smiths 1608.0 +54.5 1661.0 1245.5 2.9 85.8 6.4
27 Ashtead 5024.0 -176.0 5250.0 2361.0 0.8 36.8 22.5 112 F&C Investment Trust 858.0 +8.0 858.0 663.0 1.4 9.1 4.6 194 Londonmetric Property 235.0 -2.6 242.8 206.2 3.0 8.2 2.1 161 Smithson Investment Trust 1724.0 +30.0 1778.0 1408.0 0.0 4.3 2.7
100 Asos 5070.0 +124.0 5918.0 3004.0 0.0 28.9 5.1 28 Ferguson 9572.0 -252.0 9880.0 6038.0 2.0 50.4 21.4 81 M&G 245.6 -0.6 248.6 144.8 7.4 5.6 6.4 50 Smurfit Kappa 3895.0 +159.0 3895.0 2438.0 2.4 20.0 10.1
30 Associated British Foods 2357.0 +58.0 2494.0 1639.5 0.0 46.6 18.7 165 Ferrexpo 462.4 +2.4 501.0 164.5 2.0 6.1 2.7 167 Man 184.9 +6.9 184.9 107.6 3.9 28.0 2.7 129 Softcat 1832.0 +13.0 1969.0 1032.0 1.3 41.1 3.6
184 Aston Martin Lagonda Global 1970.0 -183.0 2273.0 46.0 0.0 N.A 2.3 146 Fevertree Drinks 2610.0 +113.0 2749.0 1874.0 0.6 73.0 3.0 142 Marks and Spencer 158.7 +1.2 171.1 88.7 0.0 N.A 3.1 126 Spectris 3257.0 -8.0 3416.0 2380.0 2.1 N.A 3.7
3 AstraZeneca 8340.0 +285.0 9320.0 6794.0 2.3 39.1 109.5 193 Fidelity China Special Situations 416.5 -1.5 498.0 247.5 1.1 2.2 2.1 173 Mediclinic International 341.4 +0.2 344.6 246.0 0.0 37.2 2.5 53 Spirax-Sarco Engineering 13200.0 +255.0 13200.0 9570.0 0.9 56.2 9.7
90 Auto Trader 621.0 +63.2 621.0 513.6 0.8 47.0 6.0 200 Finsbury Growth & Income Trust 906.0 +13.0 917.0 782.0 1.8 7.7 2.0 122 Meggitt 496.0 -4.0 515.2 252.0 0.0 N.A 3.9 36 SSE 1559.5 +21.0 1612.0 1171.0 5.2 7.2 16.3
101 Avast 487.8 +20.2 600.0 420.0 2.3 42.3 5.0 24 Flutter Entertainment 13900.0 +590.0 16915.0 10515.0 0.0 465.9 24.4 66 Melrose Industries 168.9 +0.2 186.8 85.3 0.4 N.A 8.2 177 SSP 305.3 +5.9 392.4 177.9 0.0 N.A 2.4
46 Aveva 3528.0 +27.0 5114.0 3107.0 1.0 403.3 10.6 151 Frasers 574.5 -3.5 587.5 251.8 0.0 25.6 3.0 189 Mercantile Investment Trust 275.5 -1.5 280.5 169.0 2.4 N.A 2.2 69 St James's Place 1446.5 +17.0 1455.5 885.6 3.4 29.8 7.8
35 Aviva 417.3 +7.8 421.8 256.5 3.1 8.7 16.4 83 Fresnillo 860.6 -14.8 1357.5 747.6 2.0 24.0 6.3 58 Mondi 1932.5 +22.0 1991.5 1363.0 2.7 18.8 9.4 37 Standard Chartered 493.8 -2.1 521.6 336.8 1.3 25.6 15.4
96 B&M European Value Retail 544.6 +5.2 601.0 353.2 3.2 12.7 5.5 130 Future 2952.0 +38.0 2976.0 1152.0 0.1 45.9 3.6 138 Monks Investment Trust 1348.0 +10.0 1484.0 984.0 0.2 5.5 3.2 85 Standard Life Aberdeen 284.7 +6.8 331.1 208.9 5.1 7.5 6.2
33 BAE Systems 535.8 +3.2 541.6 397.0 4.4 13.2 17.3 124 Games Workshop 11460.0 -440.0 12100.0 7100.0 1.3 38.6 3.8 19 National Grid 918.6 +4.3 991.0 806.4 5.4 N.A 32.7 181 Synthomer 543.0 -9.0 552.0 269.4 2.1 791.5 2.3
20 Barclays 180.4 -3.6 189.2 91.6 0.6 12.0 30.7 199 Gamesys 1859.0 -3.0 2005.0 845.0 2.2 30.3 2.0 25 Natwest 205.0 -2.6 210.1 93.3 1.5 N.A 23.7 127 Tate & Lyle 786.2 -6.2 815.8 595.2 3.9 14.2 3.7
72 Barratt Developments 731.2 -24.6 794.8 432.6 1.0 18.5 7.4 132 Genus 5310.0 +105.0 5435.0 3242.0 0.6 72.1 3.5 190 Network International 395.5 +0.7 494.8 205.4 0.0 492.1 2.2 88 Taylor Wimpey 166.5 -4.9 191.7 99.2 2.5 28.4 6.1
116 Bellway 3480.0 -104.0 3712.0 2060.0 2.4 23.5 4.3 8 GlaxoSmithKline 1403.4 +49.2 1674.4 1190.8 5.7 13.4 70.6 45 Next 8054.0 -142.0 8320.0 4673.0 0.0 36.4 10.7 175 Templeton Emerging Markets IT 1036.0 -4.0 1072.0 735.0 1.8 2.6 2.4
94 Berkeley 4585.0 -93.0 4897.0 4001.0 2.3 16.4 5.6 12 Glencore 329.1 -0.6 333.6 155.5 2.6 N.A 43.9 191 Ninety One 233.0 -3.2 252.0 194.2 5.4 13.8 2.2 31 Tesco 231.6 +6.6 246.8 203.0 4.3 24.6 17.9
1 BHP 2163.0 -7.0 2375.5 1490.2 5.1 22.3 124.6 160 Grafton 1150.0 -33.0 1250.0 617.5 1.3 25.5 2.8 40 Ocado 1921.5 +37.5 2895.0 1828.5 0.0 N.A 14.4 77 THG 615.0 +4.0 799.4 574.8 N.A N.A 6.8
183 Big Yellow 1287.0 -51.0 1338.0 958.0 2.0 8.6 2.3 171 Greencoat UK Wind 128.2 -5.0 148.0 124.6 5.5 19.9 2.5 195 OSB 474.4 +6.2 494.2 236.0 3.1 11.2 2.1 128 Travis Perkins 1625.5 -70.5 1696.0 1045.0 0.0 N.A 3.7
118 Boohoo 329.9 +14.5 415.0 210.0 N.A 45.5 4.2 169 Greggs 2558.0 -40.0 2618.0 1119.0 0.0 N.A 2.6 80 Pearson 852.0 +9.4 867.8 484.0 2.3 20.7 6.4 133 Tritax Big Box Reit 201.0 +3.2 201.6 134.5 2.7 7.7 3.5
9 BP 324.3 +4.9 324.8 193.4 5.7 N.A 65.6 48 Halma 2735.0 +95.0 2735.0 2158.0 0.6 51.0 10.4 106 Pennon 1145.5 +63.0 1178.0 867.8 1.9 45.0 4.8 168 UDG Healthcare 1046.0 -15.0 1067.0 689.0 0.8 44.3 2.6
10 British American Tobacco 2806.0 +72.0 3170.5 2448.0 7.5 10.3 64.4 125 Harbour Energy 20.3 +0.0 53.9 11.3 0.0 N.A 3.7 97 Pershing Square 2530.0 -30.0 2790.0 1820.0 1.0 2.0 5.3 2 Unilever 4273.5 +0.5 4892.0 3733.0 3.3 23.4 111.8
108 British Land Company 510.2 -3.8 544.8 322.0 1.0 N.A 4.7 71 Hargreaves Lansdown 1640.5 -11.0 1865.0 1348.5 2.3 23.9 7.8 52 Persimmon 3071.0 -80.0 3238.0 2259.0 7.7 15.4 9.8 110 Unite 1152.0 +7.0 1178.0 809.5 0.9 N.A 4.6
172 Britvic 944.5 +10.0 960.0 728.0 3.0 28.4 2.5 156 Hays 169.8 -5.3 176.7 105.6 0.0 N.A 2.8 185 Pets at Home 450.0 +15.6 464.2 227.0 1.8 23.3 2.3 76 United Utilities 1021.5 +19.5 1021.5 822.8 4.2 15.4 7.0
29 BT 191.8 +14.8 195.2 97.9 0.0 13.1 19.0 135 HICL Infrastructure 170.4 -2.0 180.2 160.0 4.8 21.4 3.3 73 Phoenix 724.6 -16.8 786.2 625.2 6.6 7.4 7.2 188 Victrex 2524.0 -12.0 2562.0 1825.0 2.4 40.8 2.2
92 Hikma Pharmaceuticals 2447.0 +38.0 2695.0 2100.0 1.4 19.1 5.7 143 Polar Capital Technology Trust 2260.0 +38.0 2440.0 1868.0 0.0 3.1 3.1 152 Virgin Money UK 204.5 -6.5 212.7 71.4 0.0 N.A 2.9
70 Bunzl 2308.0 +36.0 2603.0 1881.0 2.3 18.0 7.8
159 Hiscox 797.8 -15.8 1108.5 710.0 0.0 N.A 2.8 68 Polymetal International 1670.0 -32.5 2050.0 1389.5 5.5 10.4 7.9 157 Vistry 1257.0 -43.5 1346.5 529.0 1.6 37.3 2.8
64 Burberry 2209.0 +32.0 2237.0 1252.5 1.9 23.8 8.9
139 HomeServe 944.5 +1.0 1365.0 924.5 2.8 102.2 3.2 198 Primary Health Properties 155.7 +0.3 163.2 138.8 3.2 18.1 2.1 17 Vodafone 129.8 +1.9 142.4 101.7 5.9 393.8 36.2
26 Carnival 1807.4 -20.0 1865.4 802.0 0.0 N.A 23.4
113 Howden Joinery 765.0 -26.0 813.8 490.3 1.2 30.9 4.6 15 Prudential 1489.0 +15.5 1585.5 934.4 0.7 25.9 38.9 105 Weir 1894.0 -23.0 2107.0 983.8 0.0 35.5 4.9
145 Centrica 52.2 -1.3 58.0 37.2 0.0 N.A 3.1
6 HSBC 437.0 -7.0 455.5 283.4 2.4 21.2 89.3 164 Quilter 157.6 +1.8 167.8 120.9 2.9 31.8 2.7 182 WH Smith 1755.0 +10.5 2016.0 914.5 0.0 N.A 2.3
178 Close Brothers 1577.0 -33.0 1685.0 946.5 3.7 21.7 2.4
140 Hutchmed (China) 426.0 +6.0 528.0 349.0 0.0 N.A 3.2 11 Reckitt Benckiser 6488.0 +1.0 7960.0 5854.0 2.7 40.7 46.3 78 Whitbread 3315.0 +82.0 3595.0 2049.0 0.0 N.A 6.7
55 Coca Cola HBC 2634.0 +24.0 2653.0 1755.0 2.1 27.0 9.6
137 IG 861.0 +4.0 952.5 732.5 5.0 9.3 3.2 180 Redrow 659.4 -18.6 712.0 361.2 0.9 18.0 2.3 104 Wizz Air 4786.0 +253.0 5565.0 3034.0 0.0 N.A 4.9
22 Compass 1623.5 +17.5 1646.0 1050.5 0.0 N.A 29.0
111 IMI 1702.0 -27.0 1733.0 886.0 1.3 27.2 4.6 16 Relx 1899.0 +52.0 1943.5 1527.5 2.5 30.1 36.7 117 WM Morrison Supermarkets 175.8 -1.2 198.5 161.8 1.2 44.2 4.2
136 Computacenter 2628.0 -66.0 2702.0 1566.0 1.9 19.7 3.2
38 Imperial Brands 1608.5 +11.0 1674.0 1219.0 8.6 5.5 15.2 163 Renewables Infrastructure 130.0 +1.8 139.6 119.6 5.2 22.8 2.7 176 Worldwide Healthcare Trust 3730.0 +70.0 3960.0 3355.0 0.6 4.5 2.4
103 ConvaTec 247.7 +3.0 249.3 174.9 1.6 62.6 5.0
148 Inchcape 769.5 -11.0 816.0 425.0 0.9 N.A 3.0 121 Renishaw 5380.0 -200.0 6900.0 3798.0 0.3 86.3 3.9 44 WPP 995.4 -2.0 1014.0 563.6 2.4 N.A 12.0
170 Countryside Properties 491.0 -6.2 544.5 283.4 0.0 N.A 2.6
67 Informa 543.2 +2.6 598.6 354.4 0.0 N.A 8.2 63 Rentokil Initial 485.1 +6.0 571.0 464.6 1.1 48.5 9.0
192 Cranswick 4072.0 -4.0 4090.0 3200.0 1.3 23.2 2.1
59 InterContinental Hotels 5120.0 +162.0 5312.0 3516.0 0.0 N.A 9.4 197 RHI Magnesita 4386.0 -242.0 4704.0 2424.0 2.9 101.2 2.1
21 CRH 3714.0 +24.0 3752.0 2636.0 2.2 37.1 29.1
79 Intermediate Capital 2289.0 +131.0 2289.0 1141.0 2.4 14.6 6.7 95 Rightmove 646.4 +32.8 683.2 530.0 0.7 51.4 5.6
51 Croda International 7044.0 +76.0 7044.0 5004.0 1.3 45.5 9.8
49 International Airlines Group 203.2 +6.9 280.2 91.0 0.0 N.A 10.1 5 Rio Tinto 6119.0 -100.0 6658.0 4266.0 5.4 14.5 101.7
174 Darktrace 356.0 +14.4 387.0 315.0 0.0 N.A 2.5 Price/earnings ratios are based on historic data, with yield and p/e values
158 International Public Partnerships 170.6 +1.6 176.6 154.2 4.3 45.3 2.8 123 RIT Capital Partners 2470.0 -55.0 2535.0 1724.0 1.4 7.7 3.9
89 DCC 6090.0 -10.0 7204.0 5006.0 2.6 20.5 6.0 calculated from most recent reported dividends and earnings per share, using
65 Intertek 5422.0 +102.0 6440.0 5266.0 2.0 35.6 8.8 60 Rolls-Royce 111.9 +4.6 336.2 69.6 0.0 N.A 9.4
109 Dechra Pharmaceuticals 4268.0 +112.0 4276.0 2622.0 0.8 103.2 4.6 trailing 12-month figures. P/E is not calculated when last twelve months EPS is
147 Investec 301.9 -9.9 311.8 127.1 2.5 12.1 3.0 150 Rotork 341.0 -5.8 376.6 263.6 3.0 31.9 3.0
114 Deliveroo 255.4 -2.2 287.5 228.0 N.A N.A 4.4 less than or equal to zero. 52-week highs and lows are end of day. Excludes
99 ITV 130.0 +2.3 132.5 56.7 0.0 18.3 5.2 4 Royal Dutch Shell 1420.4 +26.8 1583.6 900.0 3.3 N.A 109.2
120 Derwent London 3517.0 -13.0 3578.0 2360.0 1.8 N.A 3.9 exchange-traded funds. nc = no change. N.A. = not applicable. Source: Refinitiv
MONEY
THE BOTTOM HOW MUCH DO YOU
LINE IS THAT REALLY NEED IN
MY PANTS YOUR PENSION?
WERE PAGE 10
FAULTY
QUESTION
OF MONEY, I KNOW WHO’S
PAGE 13 GOING TO WIN
THE EUROS
IAN COWIE,
PAGE 11
Follow us on Twitter @ST_Money

‘I delayed our
wedding to save
thousands in tax’
You may think getting hitched is good for your finances, but being
unmarried can benefit buy-to-let investors, writes Ali Hussain

N
imesh Shah, 39, the chief
executive of the account-
ancy firm Blick Rothenberg,
delayed marrying Danielle,
35, until after he bought
their family home in Whet-
stone, north London.
If they had been married
when they bought the
house, they would have had
to pay a property stamp duty surcharge
of 3 per cent because Danielle also owned
a flat.
As soon as you get married or enter
into a civil partnership the law regards
you as a single legal entity. It means that if
one or both of you owned a property
before marriage and then wanted to buy
a family home, you would have to sell
both of them to avoid the additional tax.
Danielle, a marketing consultant and
a volunteer for the Guide Dog charity,
owns a property in Bermondsey, south
London, which the couple decided they
wanted to keep.
Nimesh sold his flat in Barnet, north
London, to buy the family home. He said:
“There are benefits to getting married to
a tax adviser, even if it comes at the cost of
iting couples are treated as married and
married couples are treated as one buyer
unless they are separated. One spouse is
deemed to also own the properties
owned by the other, so neither could buy
a second dwelling without the surcharge.
Also, bear in mind that for capital gains
tax purposes, the person gifting the prop-
erty is deemed to make a disposal at mar-
ket value at the time of the gift. If the
property has appreciated in value
between buying it and gifting it to a part-
ner, capital gains tax at up to 28 per cent
is payable on the amount by which it
went up. You can, however, reduce capi-
tal gains tax if you have lived in that prop-
erty as your main residence at any point.
Capital gains
The sale of your main residence is not
subject to capital gains tax but married
couples can have only one main resi-
dence between them, under tax rules.
An unmarried couple can both claim a
principal private residence relief, how-
ever. For example, if they each owned a
house bought for £50,000 and now
worth £250,000, and spent their working
week in one property and most week-
relief on both. A sale would not attract
capital gains tax on the £200,000 gain.
If the couple were married, they would
have to nominate one of the properties
as their main residence and pay up to
£56,000 tax on the sale of the other.
When an asset changes hands the tax-
man likes to know if it has risen in value
during ownership. If it has, this is what
the taxman calls a chargeable event and
capital gains tax can be charged on your
profit. When married couples or civil
partners transfer assets between each
other it does not count as a chargeable
event. This is often regarded as a benefit
of being married.
Unmarried couples also have an
advantage, however, because they can
reduce future capital gains by gifting an
asset to their partner.
Everyone has an annual capital gains
exemption of £12,300. If the gain on your
asset was below that figure you could give
it to your partner, then buy it back at a
higher price to reduce the future gain
when you actually decide to cash it in.
When it does pay to marry
Besides being able to transfer assets with-

romance and a delayed wedding.”
It used to be that the tax system heavily
rewarded those who married but the
perks are disappearing fast. Even though
ends and holidays in the other, it should
be possible to justify main residence
I BECAME A MO
out paying CGT, married couples can do
so without inheritance tax (IHT) liabili-
ties. Anything left to a spouse or civil part-
NEY INFLUENCE
R...
ner after death is IHT-free.

AND TIKTOK BA
Covid restrictions on wedding ceremo- When someone dies, £325,000 of their

nies seem set to be lifted, it can pay to stay
out of wedlock nowadays, particularly if
you are buying properties.
So when does it pay to stay
unmarried?
If you’re planning on building a property
empire then staying unmarried can be
lucrative because of the saving you can
make on stamp duty.
Whenever a property changes hands
for cash there is stamp duty to pay. If you
buy a second home, there is usually a
3 per cent surcharge on top of the normal
stamp duty. A way to get round this is by
gifting properties to your partner.
Assuming you own no other proper-
ties, you buy one, then give it to them.
The transfer would not incur any stamp
duty, assuming there is no mortgage on
it, because your partner is not buying the
NNED ME
estate can be passed on tax-free, with a
further £175,000 for a family home being
passed on to a direct descendant (a
Unmarried PAGE 10
spouse, civil partner or children), so a
total of £500,000.
couples can build When a husband or wife dies, their
entire estate can be passed on to their
a property empire partner tax-free, and their allowance
passes on too. This means that when the
without paying
second home tax
second person in the couple dies they
potentially have £1 million worth of assets
that can be passed on free of tax.
For unmarried couples, a gift could
James Coney
be subject to IHT if the person giving it
dies within seven years. The potential
£500,000 allowance can be passed on
Why you should be greedy,
even when it’s bad for you
IHT-free, but anything above that could
be taxed at up to 40 per cent.
Another advantage of marriage is that
you can share personal tax allowances —
the part of your income on which you pay

home. After the transfer you no longer
own a property so you can buy another
without facing the stamp duty surcharge,
then just gift it to your partner again, and
so on, building up a property empire.
This involves trust because the donor
loses any right to the asset after it
is given away. And if you do not live for
another seven years there will be inherit-
ance tax to pay on the gifts.
If there is a mortgage on a gifted prop-
erty, the recipient is considered to be
buying it, and stamp duty plus the 3 per
cent surcharge would apply on the
amount of the mortgage.
Avoiding the surcharge in this way
does not work in Scotland, where cohab-
Married couples own property jointly
no tax. If one person is a non-taxpayer
and the other a basic rate taxpayer, the
non-taxpayer can transfer up to £1,260 of
their allowance to their spouse, cutting
their tax bill by up to £252 in this tax year.
It can be backdated for up to four years.
Married couples can transfer income-
generating assets, such as shares or prop-
erty, to the one paying lower income tax.
And there are pension pluses. Defined
benefit pensions (also known as final
salary schemes, which guarantee a set
income for life) typically offer a 50 per
cent spouse’s pension. If you are not mar-
ried, it will usually be up to the discretion
of the scheme’s trustees whether or not
to pay the benefit and to whom.
T
he other night I got home late from
work and there was a jam
doughnut on the kitchen counter.
It was one of those Sainsbury’s
ones; they are densely coated in
sugar and gently sweat fat when you
squeeze them. Obviously awful, but
almost impossible not to scoff.
It was late and I had already eaten. I
knew that once I’d had it I would suffer
immediate remorse. But it was there on
the counter and everyone else had eaten
one, so why shouldn’t I? So the
discussion went on in my head, my brain
split between my analytical left side and
my emotional right side.
Pensions suffer from this last-
doughnut syndrome.
Everyone knows that the benefits
11.7 per cent of income tax payers but
received half the tax relief on private
pension contributions. The top 1.2 per
cent of earners with incomes of more
than £150,000 accounted for 10 per cent
of tax relief. Conversely, those earning
less than £20,000 a year make up 38 per
cent of taxpayers but accounted for only
6 per cent of relief.
So far, so unfair. But this is just a very
small part of the whole picture because
tax relief to individuals — the money that
goes into their pension — is worth
£5.8 billion. Businesses get £40.7 billion.
And what the Treasury gets back from
pension savers is about £18 billion in
income tax when they spend their
money in retirement.
The more you look at tax relief, the
want to make a policy change. This plays
in to the hands of campaigners who
want higher-rate relief to be scrapped.
What chunk of the annual tax receipts
from pensions comes from those same
higher-rate payers who did well on the
way in, for example? You can’t decide on
the effectiveness until you know this.
And how many people benefit at
some point in their working life from
higher-rate relief? And how much of
their pension is built up in those years?
The big question, though, is how
much of that £40 billion cost of relief
goes towards public sector pensions?
My guess is that it is the majority, and
that poses an enormous problem. You
can’t scrap higher-rate relief on pensions
without destroying the schemes in the

More free flights (if you’re lucky)
Kate Palmer
It is about to get easier to use
your Avios to take your family
or a friend with you on a BA
flight — if and when Covid
restrictions are lifted.
From September
companion vouchers, which
allow passengers to book two
tickets for the price of one,
will be available if you spend
£12,000 on your BA Amex
card, down from £20,000.
The voucher will no longer be
valid in business class,
though — only economy.
The card, which does not
have a fee, earns you one
Avios per £1 spent. Any
vouchers earned before
September 1 will still be valid
in any class, as long as they
are in date. You cannot use
several vouchers for a single
transaction.
Companion vouchers are
often considered poor value
on economy flights,
especially short-haul
journeys, because the taxes
and fees not covered in the
voucher are higher in
proportion to the cost of the
ticket. “This is BA trying to be
more mainstream,” said Rob
Burgess, editor of Head for
Points, an Avios website.
“They know £20,000 is a lot
of money for most people to
spend in a year. BA knows
Avios is one of the few ways
they can generate cash at the
moment, but a lot of people
are more nervous about
accumulating points because
they don’t yet see a future
where they’re going to spend
them.”
BA’s Premium Plus Amex
card’s annual fee will go up
from £195 to £250. You need
to spend £10,000 on this card
to get a companion voucher.
The bonus is that BA says it
will be opening up more seats
on business-class flights,
which are notoriously
difficult to buy with Avios,
especially during peak times.
“The snag for paid-for
cardholders is that it will take
a while for the value of more
seats to become clear,” said
Burgess.
One disadvantage for both
cardholders is that they
cannot combine companion
vouchers earned before and
after September 1 in a single
booking. “If you’re booking a
family trip and have an old
voucher that you didn’t
manage to use during the
pandemic, that’s going to be
tricky,” said Burgess.
doled out by the Treasury are generous,
and probably unaffordable in the long-
term, but no one wants to give them up
because, well, everyone else has had a
doughnut already.
And just like the government keeps
trying various measures to get us to cut
down on doughnuts so that it can help
the NHS with the obesity crisis, it also
keeps trying to limit our tax relief
because it would rather spend money
on other things (such as the NHS).
Tax relief on pension contributions
costs the Treasury almost £40 billion a
year. And this generosity is why you
absolutely must save into a pension if
you can. What every chancellor for the
past three decades has tried to do is find
a way to limit these reliefs. They justify
this by claiming that they mostly go into
the pockets of the wealthy.
According the House of Commons
library, in 2016-17 people with incomes
of more than £50,000 accounted for
more you realise that we don’t have the
whole picture. We just have partial bits
doled out by officials whenever they
public sector.
All of this is why the 25 per cent tax-
free lump sum everyone can take on
retirement is looking increasingly at risk,
which is a shame because it is the only
bit that people actually understand.
That you could get almost £269,000
free of tax in retirement seems
incongruous in an age where the
Treasury is wrestling with how to fund
social care. What is the total amount lost
in tax by giving us the tax-free lump
sum? Again, we don’t know.
The tax-free All that we do know is that tax relief
will keep coming under attack, and it
lump sum is cannot easily be unpicked.
So even though we know that all this
at risk, but relief may be bad for the economy, you
have to keep using it because it is a
it’s the only valuable tax break.
Which brings me back to the real
bit anyone question I know you want answered: did
I eat the doughnut? Of course I blooming
understands well did. And it was delicious.
10 The Sunday Times June 13, 2021

MONEY

43 videos, 13,300 likes and 1 ban:

My month as a money influencer
TikTok is awash with inexperienced was the trick to going viral in the “Fin-
Tok” or ”StockTok” corner of TikTok
Monday morning, a video on saving for a
house had 3,000 likes. By 8am, it was at
sharetippers. Could Imogen Tew win where users go for financial tips.
Since it was launched in 2016, TikTok
5,000 views and my followers had
jumped from 20 (my friends) to 70.
people over with some proper advice? has grown to 100 million users across By midday, it had hit 12,000. It has

I
was banned on the third day. So
much for my chances of becoming
the next social media millionaire.
My offence was to make a short
video on TikTok about claiming tax
relief while working from home. It
had been factual, but to grab peo-
ple’s attention I said: “WFH? Get a
FREE £62.40!!!”.
I thought that was a snappy way
to get noticed. Apparently that was too
much for TikTok’s censors. It was my sec-
ond warning, after another version of the
same video had already been removed
for reasons I could not work out.
Meanwhile, other videos were advis-
ing people to go to the American trading
site Robinhood to get “free” stock worth
$200. Some were promoting the “top
seven cryptocurrencies that will make
you rich” and the “stocks that will be
worth millions this week”.
Why was Britain’s most influential
social media site among young people
banning my tips, yet allowing this non-
sense to continue?
This was my journey into the world of
the money influencers, a fast-rising band
of twentysomethings (and younger) who
are trying to make themselves rich on
social media.
My task was to combat this by becom-
ing a finfluencer (you guessed it, that’s a
financial influencer) to stop the spread of
dodgy share tips and fake news. I was to
preach solid financial tips, good advice
and handy explainers.
TikTok is a Chinese social media app
that allows users to record, edit and post
videos no longer than 60 seconds. The
videos range from funny impressions and
dance routines to life lessons and exam
tips, and users can like, share and com-
ment. But like all social media, TikTok
has become the home of rogue financial
advice and investment sharks trying to
make money.
It is unregulated and hard to police.
The City regulator, the Financial Conduct
Authority (FCA), has struggled for years
to monitor adverts on Google, and now it
faces the challenge of watching content
on sites such as Instagram and TikTok.
Social media is foreign soil for financial
businesses, as they do not seem to under-
stand that there is a young audience out
there hungry for information. This makes
it a free space for the unscrupulous.
A generation left out
It is a myth young people like me are not
interested in money. Quite the contrary.
We are obsessed by it.
I am 25, and I don’t have a single friend
who is not concerned about getting on
the property ladder, their bank balance,
how to get involved in the stock market or
when they are going to be able to stop
dragging themselves out of bed every day
to go to work.
The problem is that financial compa-
nies have failed to adjust to a generation
who have grown up with the internet. If
you want our business you will find us on
social media, not in a bank or at a finan-
cial adviser’s office (most will not take us
anyway because we don’t have enough
money).
This is why mainstream businesses
were shocked when fashionable compa-
nies such as Monzo and eToro came in
and grabbed young customers. They
understood the power of social media
and knew that a good app was the key to
success.
My own TikTok experience started
slowly. I created a video encouraging
people to get in on what I dubbed a
“secret trick” that can get you £1,000
from the government each year. I am talk-
ing about the Lifetime Isa, of course,
which gives you a 25 per cent top-up if
you save £4,000 a year.
It was viewed about 200 times in the
first 24 hours. I was happy with that, but I
had not made it to influencer status just
yet.
My second video was on pension tax
relief and the benefits of compound inter-
est, although of course I did not word it
that way. I discussed how giving up one
£2.50 coffee a week and channelling it
into your pension could get you £14,000
in retirement. It had a similar level of
traction.
My third video on the working from
home allowance tax relief of £62.40 a
year — a reputable tip the government
had promoted widely and which we have
reported — caused the commotion.
The next thing I knew I had a notifica-
tion from TikTok saying I had breached
its “illegal activities and regulated goods
policy” and the video had been removed.
How could discussing legitimate tax
relief break the rules? I assumed there
had been a mishap. I recorded the clip in
a different guise and tried again, but
another notification told me this video
had been removed and I was banned for
24 hours for “repeated violations”.
Was this a crackdown? Videos touting
“How to make $50 an hour from your
bed” and “When you put $100 into Doge-
coin in September and wake up with
$10,000” were spreading like wildfire.
I appealed against both decisions. Tik-
Tok reposted my second attempt a few
days later, but the first video remains
blacklisted. Turns out there was no great
conspiracy. TikTok admits its modera-
tion does not get every decision right.
It said: “Our community guidelines
make clear that we do not permit content
that brings financial or personal harm.
We enforce these guidelines using tech-
nology and more than 10,000 modera-
tors, and we make it easy for our commu-
nity to report content.”
Learning the ropes
I swotted up on how to make my videos
work better. I was reaching 200 people a
post and had no comments from anyone
who was not my friend, or more embar-
assingly, my boss.
Other “finfluencers” were doing short,
sharp posts two or three times a day. This
Europe. While it was the natural home
for funny videos and challenges (ever
seen someone do the floss dance?), it has
been somewhat hijacked by influencers.
Videos touting investment tips and
saving hacks frequently get more than
100,000 views and sometimes more than
a million. It can be sinister. Many offer
coaching courses or dodgy get-rich-quick
schemes. They are in it for the money of
course, and the hope is that you become
so popular that people want to advertise
on your posts. You will be paid for talking
about their services.
In March the FCA found a shifting pref-
erence towards online sources for finan-
cial advice and tips, particularly for
younger or novice investors. Of those
who had invested for less than three
years, about 25 per cent used social
media for investment research compared
with 12 per cent of people who had
invested for longer. Some 19 per cent of
novices had used an influencer but only
10 per cent or more experienced users.
The FCA said: “These sources are seen
as more engaging and accessible . . . the
audience tends to make a rapid judgment
based on view count and title.”
The concern is that the buzz created
around a topic or investment by social
media sites and influencers has led to a
surge in investment in cryptocurrency
and stocks such as Tesla, the electric car
manufacturer, the FCA said. This buzz
can encourage younger investors to pile
into the trend of the day, potentially pay-
ing a premium, unaware of the risks and
volatility, fuelled by a fear of missing out.
Alistair McQueen from the pensions
company Aviva said: “It is popular to sug-
gest that young people have a ‘live for
today’ attitude and that they live with
their financial heads in the sand. This is
unfair — no previous generation has faced
the financial challenges of today’s.”
Winning friends and
influencing people
While I was banned I tried to work out
how to make my videos more successful.
One way is to use hashtags such as #fin-
tok, #howtomakemoney, #savemoney,
#personalfinance. It is sad to see that
#crypto and #bitcoin have about 3.5 bil-
lion followers.
But could things as boring as how to
save for a house deposit, sensible invest-
ing and tax breaks engage people more
than a cat video?
I filmed eight videos so I could post at
prime times across the weekend. It was
exhausting. I spent so long looking at
myself on the phone screen — which you
can adjust to make yourself look more
contoured — that I was genuinely sur-
prised when I looked in the mirror and
found I had not grown piercing green
eyes, white teeth and high cheekbones.
I started to gain a newfound respect.
WATCH OUR INFLUENCER Coming up with the ideas, planning the
Follow Imogen on TikTok video to fit into 60 seconds, filming the
@imitalksmoney shots, editing the clips, posting them and
keeping track of comments and ques-
Watch her videos tions felt like a full-time job.
thesundaytimes.co.uk But it was worth it. When I woke up on
been gradually ticking up ever since, and
has now been watched by 75,000 people.
That success was not helping my other
videos, which had between 100 and 500
views each.
TikTok’s algorithm will promote vid-
eos depending on how successful they
are at engaging users. If lots of the first
people the video is shown to engage with
it (comment, share, like and watch it all
the way through) it will widen the num-
ber of users the post is promoted to.
I decided to double down on the topic
of buying a home. Inspired by a col-
league’s article, I posted a video to Tik-
Tok’s young audience on “Why you can
afford rent, but not a mortgage”. Two
hours after posting, it had 6,000 views.
Two days later it had been watched by
70,000. It now has 115,000 views.
The interaction from viewers has been
heartening. There has been the odd
snarky comment — my favourite is “ur liv-
ing in a dream world luv” — but users
Imogen was competing with dozens
of other “financial influencers”
have tagged friends in the comments to
bring the information to their attention
and saying things such as “take notes”.
Strangers interacted to discuss house
prices across the country — “£220,000!?!
Sis, I live in LONDON”, “Just move to the
North East! three-bed semi here!” and
“feeling grateful I live in Wales now”.
Explaining complex financial topics in
60-second videos is a huge challenge and
can leave the viewer short-changed of the
full story. You need no qualifications to
give unsolicited financial advice online so
there is no way for viewers to be sure how
in-the-know the influencer actually is.
But social media has bridged a finan-
cial education gap. While TikTok has its
pitfalls, its millions of users who follow
the #money hashtag are clearly engaged.
It is hard to say whether TikTok users
would have reacted as well to my posts
had I not “looked the part” (I have a nose
ring — is this still cool?), and filmed videos
in my flat, garden or local park.
I doubt the backdrop of our fancy
office in London, or my grey-haired, bes-
uited editor would have chimed so well.
Am I a finfluencer? Not yet. But I did
enjoy it when a user messaged me, hav-
ing watched a Lifetime Isa video, asking
for tips. I could not offer them specific
advice, but I could at least point them in
the right direction. Job done.

Does £400k
GETTY IMAGES
you may need to retire on.
You can assess what you need
to spend each year to
maintain a lifestyle and work
buy a happy
back from there.
The most expensive
lifestyle to fund would be a
comfortable retirement in the
retirement?
south east of England or
greater London where the
PPI says a single person
would need £1.1 million, or a
couple £1.475 million, in their
pot. This would give the
Kate Palmer looks at what you need single person an income of
£36,300 a year and a couple
to save for a comfortable future £49,300 a year.
A “comfortable”
up the rate throughout your
working life.
What you need to save
Let’s assume that you want to
withdraw 4 per cent of your
pension pot every year —
generally accepted as a way to
make your pension last for
the length of an average
retirement.
Based on this withdrawal
rate you will need to have
saved two to three times your
salary by the age of 40, four to
five times by the time you are
50 and 9-15 times your salary
by age 70 to give you enough
Watch out if you
are moving that
gold-plated pension
Kate Palmer
Four out of ten pension
transfer requests over the
past three years were flagged
as possible scams.
Of 3,789 transfers looked at
by the pensions consultancy
XPS, 462 were flagged as high
poor cash equivalents.
Common scams identified by
XPS included unregulated
advisers giving advice or
charging extremely high fees.
It said some savers were
pressured by couriers to sign
documents in a hurry.
“It’s crucial to speak to

H
ow much do you need
for a comfortable
retirement and what
should you be saving
now? It is the question
everyone wrestles with
regardless of whether they
are 25 or 65.
The answer, of course,
depends on what type of
lifestyle you want. But if you
are looking for a target then
analysis suggests that at the
very least you will need
£440,000 in your pot if you
want just the most basic
standard of living by the time
you retire.
That is according to the
latest research, which looks
at current retirement
spending habits.
If you want numerous
foreign getaways, home
refurbishments and new cars,
you will need to save
£970,000, according to the
single person £33,000 a year
to live off in retirement
(£47,500 for the couple) in
today’s money, including the
full state pension which is
worth £9,339.
This assumes that savers
use their pot to buy an
annuity (an insurance policy
that guarantees an income for
life) that increases at 2.9 per
cent a year to keep pace with
inflation.
So how do you achieve this?
The pension company LCP
said that a 21-year-old would
build a “comfortable”
retirement if they saved £250
a month into a pension and
accrued £492,918 by the time
they retired. They would not
need to pay in all of this
themselves because it could
include contributions from
an employer. It assumes
7 per cent growth on their
If you want a comfortable you benefit greatly from
retirement, start saving compounded investment
into a pension early growth. The advisory firm
LEBC said that £100 a month
Total pension pot value saved from age 25 would
by age, when saving... produce a fund at age 65 of
£100/month £250/month £64,000 whereas if you
started saving at 45 you
£500k would have only £30,000.
“Starting early is crucial,”
retirement, according to the
Pensions and Lifetime
Savings Association is one in
which all your basic needs,
such as housing costs and
bills are covered, you have
£56 a week for food
shopping, a three-week
holiday in Europe once a
year, a second-hand car that
you replace every five years
and you can afford a new
bathroom and kitchen every
ten years or so.
Fewer than one in ten
people will reach this
comfortable standard of
living, according to the PPI.
It may be worth doing a
savings stock-take to make
sure that you are putting
enough aside. Here are some
tricks you can use.
Halve your age
Take the age that you start
saving and halve it: that is
what you should be saving as
to live off for the rest of your
life, assuming an average
lifespan.
This sounds a lot, but also
assumes that your savings
will grow because money is
invested in the stock market.
The ranges are based on
investment growth of 5 to
7 per cent, and that your
salary goes up in line with
inflation, according to Dan
Mikulskis of LCP.
Aim for two-thirds of your
income
The PPI said that target
retirement income should be
about two-thirds of what you
were used to in your working
life. This idea dates back to
civil service pensions, and
was used as a mainstay of
defined benefit schemes.
Someone earning an
average salary of £24,900
would need £278,000 in their
pension pot to be able to
risk and 1,143 deemed to be at
some risk, totalling 42 per
cent of all transfers.
XPS runs a transfer service
for companies offering final-
salary pensions. It calls
members who are leaving
pension schemes to ask
where they are moving their
money and how they have
been advised.
XPS analysed 5,200
transfers representing
£1.3 billion of pension wealth
since 2015, when the rules
changed to allow savers to
cash in final-salary pensions.
These schemes, also
known as defined benefit
pensions, provide valuable
benefits in retirement,
offering a guaranteed income
for life. There are concerns
that savers may be giving up
these benefits in return for
members on the phone to get
an understanding of how
they came to their decision,”
said Mark Barlow, a partner at
XPS. “Often we find that
members have been cold-
called by an adviser or just
don’t understand what
they’re doing.”
The Department for Work
and Pensions has proposed
new legislation to give
trustees of pension schemes
the ability to block transfers if
they think there is a scam.
It involves a four-step
process. First, the trustees
have to verify that the
transfer is being made to a
properly authorised scheme.
If the transfer is to a work
pension, the person has to
prove they are linked to that
employer, and if it is in
another country, they have to
prove they are a resident.
If they fail any of those
tests, a fourth step applies

Pensions Policy Institute
(PPI), a think tank. The
slightly better news is that if
you are in a couple you will
need £1.4 million between
you, because of the shared
costs of living together.
These sums would give a
investments, including
inflation.
If they had contributions of
£100 a month they would
build up £207,544 by age 70.
Starting pension savings
early, although not possible
for many people, means that
said Kay Ingram, LEBC’s
250 director of public policy.
“The money put away in
one’s twenties will buy so
0 much more than that saved in
20 30 40 50 60 70 your fifties or sixties.”
Assumes saving from age 21; 7% annual asset growth
There are many different
Source: LCP ways of thinking about what
a percentage of your salary if
you would like to retire at 65
on 50 per cent of your pay.
So if you start your saving at
20, aim for a 10 per cent
pension contribution rate,
and from 30, 15 per cent, and
so on. You will need to keep
replicate their working-life
living standard on top of their
income from the state
pension.
Someone earning £65,000
during their working life
would need to save £796,314
for two thirds of their salary.
42%
where the trustees look for
“red flags” and “amber flags”.
A red flag will block the
transaction, and if there is an
amber flag, the person has to
Of transfers take scams guidance from the
were flagged as government’s Money and
possible scams Pensions Service.
The Sunday Times June 13, 2021 11

MONEY

Ian Cowie Personal Account

Sorry Mr Southgate, I already know
who’s going to win the Euros — it’s me

W
ill today’s
between England and
game

Croatia, or tomorrow’s
ever for DIY investors to take a global
approach to asset allocation. Whichever
team we back for the Euros, there’s no
currently cost £1.18 and continue to yield
more than 4 per cent tax-efficient income
in my Isa. GIVN has soared from the
. . . but the
Scotland v Czech
Republic match, kick
need to be a little Englander when it
comes to selecting businesses for income
SwFr 1,795 I paid in March 2017 to
SwFr 4,235 (£3,338) on Friday, and SOON home team is
off Britain’s first suc-
cessful campaign in
the Euros? Football
and growth or a mixture of both.
Other Euro favourites in my forever
fund include Aberdeen Standard Euro-
is not far behind, having risen from
SwFr 173 in April last year to SwFr 320
now.
worth a punt
forecasts remain the pean Logistics Income (ASLI), the invest- The Switzerland-based Nestlé (NESN),
domain of my col- ment trust that owns continental ware- the biggest food company in the world Medium-sized British businesses can
leagues Henry Winter and Jonathan houses for stuff we buy online; Givaudan has a higher profile and is also one of offer big bargains for the brave, as the
Northcroft but this DIY international (GIVN), the Swiss flavours and fragrances my top 10 shares by value. I first invested insurance tycoon Sir Peter Wood
investor already feels like a happy footy firm that is probably the biggest business at SwFr 65 in March 2014 for shares that demonstrated again last week. Unlike
fan, thanks to European funds and in the world most people have never cost SwFr 114 now, and I recently larger companies, mid-caps are less
shares. heard of because its products go into switched into American depositary likely to rely on exports that might suffer
For example, the price of Adidas (stock other brands’ foods and drinks; and Son- receipts (ADRs) for this stock (NSRGY) from Brexit or cross-border coronavirus
market ticker: ADS), the German sports ova (SOON), another little-known Swiss seeking tax-efficient income in my self-in- complications.
goods giant, has nearly quintupled since I giant that is a big noise in hearing aids. vested personal pension. My first NSRGY The co-founder of Direct Line (DLG)
stuck some in the back of the net at €61 in None gets mentioned much in the dividend delivered a low four-figure ster- and Esure is sitting on a paper profit of
July, 2014. As argued here at that time, British press but the ASLI shares I ling sum earlier this month. more than £60 million after selling his
sport is big business and likely to become bought at £1 in December 2017 No discussion of European risks and comparison website, GoCompare, to the
more so in a world hungry for entertain- rewards would be complete without magazine publisher Future (FUTR) and
ment and keen to become healthier. revisiting my continental catastrophe. building a 5.9 per cent stake in the latter.
Since then, Mr Market seems to have As discussed here several times, I paid Wood, 75, is a successful entrepreneur
come round to that view, lifting the share €188 in January 2014 for shares in Volks- worth £815 million, according to The
price to €294 on Friday, making ADS my wagen (VOW), the German carmaker that Sunday Times Rich List.
third most valuable holding. Gooaal! later coughed up to dodgy diesel pollu- That’s the kind of company this small
Never mind the branded shirts, shorts, tion practices. That caused its price to investor likes to keep, however indirectly.
boots and balls, viewers of the Euros will crash to €126 when I sold in September FUTR is the second-largest holding in
probably see more products of another 2015. Ouch. JPMorgan Mid Cap Investment Trust
“forever fund” favourite being worn by More recently Orsted (ORHE), the big- ( JMF) where, after years of dithering, I
the spectators. Many may even watch the gest offshore wind farm operator in the bought shares at £11.65 in March. They
games through them. world, has joined the list of shame called cost £14.65 on Friday and still yield just
Yes, you guessed, the Franco-Italian Cowie’s Clangers. I paid 953 Danish under 2 per cent.
spectacles and sunglasses business, krone (DKK) last year for stock that I am motivated by hopes that Brexit
EssilorLuxotica (EL), has helped me look dropped to DKK 842 after ORHE noticed and coronavirus fears will recede, and
on the bright side since I bought shares the sea sometimes moves around a bit, the wish to increase exposure to great
at €96 in March 2019. The maker of Ray- especially during storms, causing dam- British businesses with plenty of scope
Ban and Oakley shades also produces age to its submarine cables. for growth. I am happy to pay annual
nearly a third of the world’s spectacle len- Less than blown away by this fees of 0.88 per cent for professional
ses and currently trades at €148. astonishing insight, and all stock selection by Georgina Brittain and
If all continues to go well I might even the calmer because I Katen Patel, who have been at the helm
celebrate with another forever fund busi- invested only about 1 per of JMF since 2012 and 2013 respectively.
ness backing the footy, Heineken (HEIO), cent of my life savings, I am Other interesting JMF holdings
the Dutch brewer in which I invested at hanging on in the hope that a shift in the include the cult toymaker Games
€45 per share in January, 2014. Despite wind might lift the shares. Workshop (GAW); the household goods
most pubs and clubs being red-carded by Whatever the future holds, European group Dunelm (DNLM); the builder
that lout the coronavirus last year, HEIO funds and shares are well worth consid- Bellway (BWY) and the self-descriptive
has frothed up to €84. ering as an alternative to American assets Pets at Home (PETS). All survived recent
There’s no need to stick to its Uefa currently trading at or near all-time or current crises and can continue to
Euro 2020 limited edition lager (the tour- highs. Closer to home, for Welsh friends thrive when the recovery arrives.

£14.65
nament was delayed by a year). The who might still be fuming about the start
global giant also brews Newcastle Brown of this article, I should add that their
Ale and Murphy’s Irish Stout, as well as game against Switzerland yesterday
international lagers Moretti, Krusovice might also mark the start of a British suc-
and Tiger. Cider fans could consider cess story at the Euros.
Bulmers, Strongbow or Woodpecker Either way, investors should consider
from the same company, preferably not international diversification to improve
all on the same day. Cheers! our odds of feeling over the moon
More seriously, the important point is and to reduce the risk of ending up as sick The share price of JP Morgan Mid
that online platforms have made it as a parrot. Home or away, investment is Cap Investment Trust. Cowie
easier and more cost-effective than ILLLUSTRATION BY TONY BELL a game of two halves. invested at £11.65 in March

We lost our
money for a new business,
Crowdfunder charges a 3 per
cent fee plus VAT and a 1.9 per
cent plus 23p plus VAT
in south Croydon and
supplies pizzas to a local pub.
He raised £3,000 from
Crowdfunder pledges within

jobs, then
transaction fee. Charities only
pay the transaction fees.
This means if someone
gives you £100 on your
six weeks and used them to
buy his first pizza oven, a tent
and ingredients.
In return his pledgees

raised cash
project, the project fee is
£3.60 (3 per cent plus VAT of
20 per cent) and the
transaction payment is £2.56
received free pizza and
opportunites to name
monthly special pizzas.
He is increasing his profits

to start again
(1.9 per cent, plus 23p, plus
VAT). Therefore a total of
£6.16 would be taken and you
would receive £93.84.
Kickstarter and Indiegogo
Entrepreneurs are looking to charge 5 per cent of the total
funds raised and transaction
crowdfunding as they bounce back fees of 3 per cent plus 20p
and 2.9 per cent plus 30p
from the crisis, writes Imogen Tew respectively.
and has plans to expand to a
van and eventually a bricks
and mortar shop.
Robson said: “I absolutely
love going to work every day
with my mum’s name above
the door and the whole thing
has made me realise I never
want to go back to
advertising.”

A
by-product of the
pandemic has been an
increase in new
companies. People who
were made redundant,
or were self-employed, have
done a Covid pivot.
A record 835,500 start-ups
were registered at Companies
House last year. Many of
these raised money via
crowdfunding. In May 2020,
two months after the
pandemic struck, there was
an 884 per cent increase in
new business projects on the
Crowdfunder website
compared with May 2019.
About 2,000 people
sought to raise money last
year on the site, a rise of
326 per cent on 2019 figures.
If you are looking to raise
money for your business here
is what you need to know.
How does it work?
Some sites, such as
Crowdfunder, Indiegogo and
Kickstarter, are rewards-
based — people who give
money do not take an equity
stake or expect their money
back, but may receive
rewards if the business is
successful. The rewards can
be a meal, a private tour or
discounts at the venue once
the business is launched.
Other platforms, such as
Crowdcube and
SyndicateRoom, are equity-
based, and investors expect a
return if the business is
successful. They will lose
money if it is not.
With pledging, which is
how Crowdfunder works,
there are two options: “all or
nothing”, where you receive
your pledges only if you hit
your project target; and
“keep what you raise”, where
you keep all your pledges
regardless.
If you go “all or nothing”
and fail to raise your target
sum, you get nothing and pay
no fees. But if you are happy
to receive any amount as a
boost to your business you
may prefer the “keep what
you raise” option.
Growhampton, a
sustainability project, used
Crowdfunder to raise money
for its café extension. For a
£10 pledge it offered a drink
and lunch; for £40, a tour of
the chickens and some eggs.
For £500, you would have
bagged a dinner party for ten.
You can raise funds for
different initiatives on
crowdfunding platforms,
whether it be business
ventures, charities and
community projects, or
personal causes.
How much does it cost?
For those looking to raise
Naomi Flaherty and Olly Walker started The Public Spirit
Fees on equity-based
crowdfunding platforms
work similarly. Crowdcube
charges investors 1.5 per cent
on its investments and a 5 per
cent “success” fee if you
make a profit. It charges
businesses 7 per cent of the
money raised.
What are the downsides?
The companies on
crowdfunding platforms are
young and mostly untested,
so your investment comes
with a high level of risk.
Most platforms are covered
by the Financial Services
Compensation Scheme so
you are protected in the event
the platform fails to meet its
regulatory obligations, but
you won’t be able to claim if
your investment fails.
My story
Alex Robson set up Penny’s
Pizza, named after his
mother who died from
cancer in 2015, a year after
he was made redundant from
his dream job in advertising.
Robson, 34, runs a stand
Olly Walker, 25, was made
redundant from his
marketing job during the first
lockdown.
He and his partner Naomi
Flaherty, also 25, who still
works full time for a media
agency, have launched
The Public Spirit, which
makes rum.
The couple, from
Manchester, had £17,500
from savings and help from
family and friends, but
decided they needed another
£10,000 to get the business
off the ground through
pledges. In return they gave
first bottles in the batch, tote
bags, rum subscriptions and
personalised bottles.
They turned to
Crowdfunder and hit their
target in four days, ending up
with more than £15,000 of
pledges.
The Public Spirit has made
more than £40,000 in sales
and has expanded from
Manchester to London and
Scotland. Walker and
Flaherty hope the end of
lockdown and the reopening
of hospitality will help the
business to grow further.
Walker said the company’s
ethos had helped it to raise
funds from the Crowdfunder
community. A key part of
what the couple want to do
is to help the local area, so
The Public Spirit donates a
quarter of its profits to
charity and provides ad hoc
support for food banks and
other causes around the UK.
He said: “I’d never turn
back. I love it. I’ve never
really known what I wanted
to do but I knew I wanted to
run my own business.”
12 The Sunday Times June 13, 2021

MONEY

Best Buys THE

FIVER
CURRENT ACCOUNTS FOREIGN MORTGAGES 5
CREDIT INTEREST
Provider Account name Account fee Reward Balance Contact
CURRENCY 2-YEAR FIXED RATES
Lender Rate Scheme Deposit Fee Notes Contact
Halifax Reward Current Account None £5 a month – 0345 720 3040 Barclays 1.05% Fixed to 31.08.23 40% £999 LV 0333 202 7580
Interbank rates at 5pm
TSB Spend & Save None £5 a month – 0345 975 8758 on Friday, which show Marsden 2.49% Fixed to 31.07.23 15% £0 LV 0800 801645
Co-operative Bank Current with Everyday Rewards None £2 a month – 0345 721 2212 where the market is HSBC 2.89% Fixed to 31.08.23 10% £999 LV 0800 494 999 5
trading. They are not
OVERDRAFTS * 3-YEAR FIXED RATES
indicative of the rate
Provider Account name Account fee Interest rate 1 0% overdraft limit Contact you could get. Lender Rate Scheme Deposit Fee Notes Contact

Starling Bank Current Account None 15% £0 starlingbank.com

EURO
Barclays
Leeds
1.29%
1.99%
Fixed to 31.08.24
Fixed to 31.07.24
40%
20%
£999
£999
LV
LV
0333 202 7580
0345 045 4049 FIVE THINGS
First Direct 1st Account None 39.9% £250 0345 600 2424
YOU NEED TO

1.16
Virgin Money M Plus Account None 19.9% £0 0345 600 6103
GBP>EUR Tipton & Coseley 3.19% Fixed to 31.08.24 10% £999 R 0121 557 2551
1
Equivalent annual rate. LONG-TERM FIXED RATES KNOW ABOUT . . .
MEME STOCKS
* Based on overdraft of £500 for 7 days a month.
Some accounts require minimum funding/direct debits to open or receive rates shown. Lender Rate Scheme Deposit Fee Notes Contact
Source: moneyfacts.co.uk
Barclays 1.19% Fixed to 31.08.26 40% £999 LV 0333 202 7580

1
Lloyds 1.92% Fixed for 31.08.26 20% £999 RS 0800 783 3534
Pronounced “meem”
HSBC 3.29% Fixed to 31.08.26 10% £999 LV 0800 494 999 (not “me, me”), meme
USA
CREDIT CARDS

1.41
GBP>USD Virgin 1.95% Fixed to 01.10.31 35% £995 LV 0345 605 0500 stocks are companies
whose share price soars
INTRODUCTORY RATES TRACKERS */ DISCOUNTS
because of social media
Provider Card type Introductory purchase APR 1 Reward Contact Lender Rate Scheme Deposit Fee Notes Contact hype, rather than anything
Lloyds Bank Purchase & Balance Transfer Mastercard 0% for 21 months 21.9% No 0345 602 1997 HSBC 1.39% Tracker + 1.29% for 2 years 40% £999 ELV 0800 494 999 fundamental.

2
Tesco Bank Clubcard CC Purchases MC 0% for 20 months 20.9% Yes 0345 300 4278 Nationwide 3.94% Tracker+3.84% for 2 years 5% £0 EVF 0800 302 010
Newbury BS 1.69% 2.26% discount for 5 years 25% £850 LV 01635 555 777 The most famous is
Barclaycard All-rounder Visa 0% for 20 months 21.9% No 0808 151 0900
GameStop, an
SWITZERLAND First Direct 2.19% Tracker+2.09% for term 25% £490 ELV 0800 482 448
electronics

1.26
BALANCE TRANSFERS GBP>CHF FIRST-TIME BUYER / LOW DEPOSIT company that hit the
Provider Card type Introductory purchase Transfer fee 2 APR 1 Contact headlines in January when
Lender Rate Scheme Deposit Fee Notes Contact
Sainsbury’s Bank 29-month Balance Transfer Mastercard 0% for 29 months 2.0% (min £3) 21.9% 08085 405060 its share price soared
Hinckley & Rugby BS 3.39% Fixed for 2 years 5% £999 PV 0800 774 499
MBNA Long 0% Balance Transfer Mastercard 0% for 29 months 2.69% (no min) 21.9% 0345 606 2062 350 per cent in two days.
Skipton BS 3.74% Fixed to 30.09.26 5% £0 PTV 0345 850 1755
HSBC Balance Transfer Visa 0% for 29 months 2.75% (min £5) 21.9% 0345 7404 404 Individual traders had
Nationwide 1.84% Fixed for 5 years 25% £999 HV 0800 302 010 shared tips on Reddit, a
CASHBACK CARDS social media platform, and
BUY TO LET
Provider Card type APR 1 Cashback Contact AUSTRALIA Lender Rate Scheme Deposit Fee Notes Contact
started buying stock in the

1.83
American Express Platinum Cashback 27.3% 1%-1.25%. Intro 5% for 3 months 0800 917 8047
GBP>AUD company because it had
HSBC 1.94% Tracker +1.84% for 2 years 40% £349 LV 0800 494 999 been shorted by several
American Express Platinum Cashback Everyday 22.2% 0.5%-1%. Intro 5% for 3 months 0800 917 8047 Virgin 1.85% Fixed to 01.10.23 25% £995 RT 0345 605 0500 prominent hedge funds.
Santander All in One Mastercard 23.7% 0.5% 0800 912 3123

3
Leeds BS 1.86% Fixed to 31.07.26 40% £995 LV 0345 045 4049
1
APR = annual percentage rate, dependent on credit rating. 2 Fee charged on the amount of each balance transfer during the introductory period. Early repayment charge applies unless otherwise stated. * Most deals track Bank of England base rate. While the meme
Source: moneyfacts.co.uk E = No early repayment charge; H = Help to Buy; L = Free legal work for remortgages; M - £250 cashback; P = Purchases only; R - Free legal work stock trend started
and valuation for remortgages; R = Free valuation and legal work for remortgages; S = Remortgage only; T = £500 cashback for purchases; V = on Reddit, it has
Free valuation Source: landc.co.uk — 0800 373 300
spread to other platforms
such as TikTok and
SAVINGS ACCOUNTS Instagram. More
companies have had their
INSTANT ACCESS
share prices affected by
Provider
Cynergy Bank
Account name Min deposit Interest rate Contact
CASH ISAS meme stock traders,
Online Easy Access Account (Issue 40) £1 0.5% cynergybank.co.uk INSTANT ACCESS including the phone
Atom Bank Instant Saver £1 0.5% atombank.co.uk Provider Account name Min deposit Interest Transfers in Contact
company Blackberry and
Charter Savings Bank Easy Access Issue 20 £1 0.45% chartersavingsbank.co.uk AMC, a cinema company.
Cynergy Bank Online ISA Issue 13 £1 0.47% Yes cynergybank.co.uk

4
Charter Savings Bank Easy Access Cash Isa Issue 21 £5,000 0.45% Yes chartersavingsbank.co.uk
NOTICE ACCOUNTS Buying meme
FIXED RATE stocks is trading,
Provider Account name Notice period Min deposit Interest rate Contact
Provider Account name Term Min deposit Rate Transfers in Contact not investing. The
Shawbrook Bank 120-Day Personal Issue 48 120days £1,000 0.72% shawbrook.co.uk sharp price rises are
Shawbrook Bank 1 Year Fixed Rate Cash ISA Issue 48 1 year £1,000 0.56% Yes shawbrookbank.co.uk
Allica Bank 95-Day Notice Personal Savings Issue 1 95days £1,000 0.70% allica.bank usually followed by heavy
UBLUK 2-Year Fixed Rate Cash Isa 2 years £2,000 0.81% Yes ubluk.com
Paragon 120 Day Notice savings account (Issue 22) 120days £5,000 0.70% paragonbank.co.uk crashes, and there is a
Source: savingschampion.co.uk — 0808 178 5354
short window in which
FIXED-RATE BONDS you can make money. You
Provider Account name Term Min deposit Interest rate Contact need to buy the stock
just before the hype
Charter Savings Bank 1 year Fixed Rate Bond 1 year £5,000 0.85% chartersavingsbank.co.uk
affects the market and sell
UBL UK 2 years Fixed term Deposit 2 years £2,000 1.11% ubluk.com before the crash. Timing
UBL UK 3 years Fixed Term Deposit 3 years £2,000 1.21% ubluk.com this is very tricky.
CHILDREN’S ACCOUNTS
5
DEALS ARE LISTED ONLY IF THEY ARE COVERED BY THE UK FINANCIAL SERVICES COMPENSATION SCHEME (FSCS) OR A EUROPEAN EQUIVALENT
Provider Account name Account type Min deposit Interest rate Contact Meme stock traders
Source: savingschampion.co.uk — 0808 178 5354
Halifax Kids’ Monthly Saver Regular Saver £10 3.5% halifax.co.uk use their own lingo.
“To the moon”
Santander 1 123 Mini Current Account Current Account £1,500 2.96% santander.co.uk
means you’re confident in
HSBC2 MySavings Easy Access £10 2.47% hsbc.co.uk the stock, while “tendies”
1
Interest paid on balances between £1,500 and £2,000 2 0.25% paid on balances above £3,000 refers to the money made

ENERGY DEALS Supplier Average annual bill Rate Contact

JUNIOR ISAS
Provider Account name Min deposit Interest rate Rate Contact
or lost. “Hold the line”
commands traders to
Table shows the cheapest tariff from the three 3 cheapest PFP Energy £845 Variable 0800 702 2683* keep buying/hold their
suppliers.Excludes
cheapest suppliers.fixed
Excludes
tariffsfixed
of less
tariffs
thanof12 Bath BS Junior Cash Isa £1 2.5% Variable bathbuildingsociety.co.uk
months’
less thanduration.
12 months’
Excludes
duration,tariffs
tariffs
that
that
do not have Neo Energy £873 Variable 0800 702 2698* stock when the price
Loughborough BS Junior Isa £1 2.5% Variable theloughborough.co.uk is falling.
national
do not have
coverage.
nationalExcludes
coverage tariffs
and tariffs
where payments
are taken
where payments
in advance
are taken
of theincustomer
advancecoming
of on Green £937 Variable 0330 100 5487*
Dudley BS Cash Junior Isa £2,500 2.5% Variable dudleybuildingsociety.co.uk Imogen Tew
supply.
the customer
F=Fixed
coming
rates V=Variable
on supply. rates *Phone numbers provided will call through to theenergyshop.com switch support team. Source: theenergyshop.com — 0800 448 0205
Source: savingschampion.co.uk — 0808 178 5354

VPIERRE PERRIN/SYGMA VIA GETTY IMAGES; ALAMY

Inflation is When does it make

sense to pay a £10k
back, and so loan fee? Umm . . .

is the rush to Kate Palmer borrowers. “For most

landlords, this clearly won’t
Paragon, one of the biggest be a deal that will carry much
buy-to-let lenders, has a new allure, but it’s really designed

buy bullion
mortgage with a £10,000 for those who want to
arrangement fee. borrow a lot,” said David
The 3.25 per cent five-year Hollingworth from the
fixed-rate is available to mortgage broker London &
landlords with a 30 per cent Country.
deposit. The loan comes with The lender Mortgage
Gold can protect your savings from a free property valuation, Works, for example, has deals
rising prices, says David Brenchley £750 in cashback and the
highest fee ever seen.
with a 2 per cent fee, which
would cost £20,000 on a
Gold is a hedge against ups and downs in inflation and currency values because you can’t just print more of it Fees on buy-to-let loans are £1 million loan.

I
usually a percentage of the Paragon recently said that
nvestors’ interest in gold in which inflation ran into and goldmining companies relying on a derivative gold. At Janus Henderson, loan amount. The £10,000 most of its landlord
has surged as the cost of
living has rocketed at the
double digits at times.
The recent move into gold HOW TO INVEST have posted gains of 26 per
cent. Over the same time the
contract that replicates the
gold price. This removes an
Paul O’Connor said that its
multi-asset team had
fixed fee loan, with a limit of
£2 million, has two other
borrowers had done well
during the pandemic. It
fastest pace for years. shows that many investors WisdomTree Physical S&P 500 index of large US extra layer of risk. offloaded all of its gold at the options: a fee-free version posted better than expected
Sales of gold almost are looking for somewhere to Gold ETC charges companies has risen 8.23 per Tilney holds the Invesco end of last year. with a higher rate of 3.64 per company results this week
doubled from April to May. shelter their savings, perhaps 0.39 per cent and iShares cent and the UK’s FTSE 100 Physical Gold ETC, which has The strength of the US cent, or a 2 per cent fee with a showing underlying pre-tax
Gold is often described as preparing for a few years of Physical Gold ETC 7.7 per cent. a continuing charge of dollar is a key indicator for rate of 3.34 per cent. Neither profits of nearly £83 million
the ultimate safe haven. inflation above the central charges 0.15 per cent. Ruffer, the investment 0.15 per cent and holds its gold. When the dollar has a cashback incentive. in the six months to March 31.
Whenever stock markets are banks’ 2 per cent target as Both track the price of manager, is worried about the bullion in the London vaults declines investors will look to You would need to borrow Residential borrowers are
hit by economic turmoil, such economies recover from the gold and are backed by incentive for governments of JP Morgan Chase Bank. purchase gold. £474,359 to justify paying the being asked to pay high fees
as inflation, many investors coronavirus pandemic. physical holdings, kept by and central banks to debase, Jason Hollands from the “You might therefore think £10,000 fee and taking the for the lowest rates ever seen
take shelter in gold. Monthly consumer price a custodian. Buying or weaken, their currencies wealth manager Tilney said that now could be a time to lower rate over the fee-free on the mortgage market.
Its value has been bumpy indices jumped in April, at physical gold can lead to because they are so heavily in that the gold holding was “an buy gold, given the version based on an interest- These rock-bottom deals have
lately, though. After a their fastest pace since 2009 storage costs, which are debt. “An asset that can insurance policy in the event weakening trend for the only mortgage, which is the added fuel to a housing boom
phenomenal couple of years in America and since March typically about 0.2 per protect you from that, like of an outbreak of turbulence dollar as the US deficit more common for buy-to-let. where there is high demand
— the price rose 44 per cent 2020 in the UK. The core cent of the value of your gold, is really interesting to or collapse in confidence in grows,” he suggested. The £10,000 fee and the and low supply for homes.
from January 2019 to personal consumption holdings each year. us,” said Hamish Baillie, an the financial system. Will Hobbs, the chief 2 per cent fee option are Platform’s 0.95 per cent
January 2021 — its price fell expenditure index, a gauge You can also invest in investment director at Ruffer. “As a physical asset that investment officer at Barclays roughly similar on a loan of mortgage is lower than some
dramatically in the first that strips out volatile food funds, such as BlackRock “Gold has this wonderful needs to be extracted, you Wealth Management & £400,000, once you take the savings rates but has a £1,499
quarter of this year. But and energy costs and is Gold & General, that hold two or three thousand-year can’t just ‘print’ more gold in Investments, also issued a rate into consideration, but fee.
demand came back with that monitored by the US Federal mining companies, which pedigree of people regarding the manner that central word of caution. for anything less the If you had a £150,000
surge in May. Net customer Reserve, had its largest year- will benefit from a rise in it as a store of value, even if it banks can electronically Hobbs likened gold to percentage fee is cheaper. mortgage with Platform,
buying rose 97.5 per cent in a on-year rise since 1992. gold prices. It has an has very little practical create more cash, so gold is a cryptocurrencies, in that Lenders are offering rock- which is part of the Co-op
month, according to the The price of goods leaving annual fee of 1.17 per cent. purpose in the world.” classic hedge against the both are difficult to value, bottom mortgage rates but Bank, it would cost more to
trading platform Bullion Chinese factories also jumped Ruffer’s gold exposure is devaluation of fiat currencies. and they evoke strong are using fees (also called pay the fee on the 0.95 per
Vault. by their fastest pace in more mostly in mining companies. It could also be argued that reactions from those who like arrangement or set-up fees) cent deal than if you took out
Companies that mine for than three years. These Worth its weight “We think there is value in the cryptocurrencies have moved them and those who do not. to claw back profits from Platform’s 1.05 per cent two-
gold have been popular with factors have led to swings in Gold ($/oz) miners,” he said. “They’re into this role in recent years.” Hobbs said: “Anything that year mortgage, which has a
fund managers, who believe the price of stocks and bonds more volatile than the metal Some are less enthusiastic sounds like bad religion, lower fee of £999.
2,000
they are good value now and in recent months, despite but if you’re bullish on gold about gold, however. One of where people hate it or love Over two years you would
are likely to go up on the back central banks and most that can be helpful.” gold’s big drawbacks is that it it, stay away from it because pay £14,985 in repayments

£474k
1,500
of a rising price for the economists believing the hike Ruffer owns a gold produces no income, interest that means there’s no plus the fee with the 0.95 per
prcious metal. in inflation will prove 1,000 exchange-traded fund (ETF), or dividends. Its price is intrinsic value to debate. It’s cent deal, compared with
Gold is often seen as a temporary. as does the investment entirely dependent on market just ‘I love it’, ‘I hate it’. £14,648 for the 1.05 per cent
hedge against rising “Gold tends to do well 500 manager Tilney. Both have sentiment. “They’re momentum mortgage. To make the
consumer prices. The gold when other investments do plumped for a physically David Coombs at the assets. When everyone loves cheaper rate but higher fee
price rose from $245 in badly,” said Adrian Ash at 0 backed product, which investment manager them they go to the sky and Loan size you worthwhile, you would need
December 1970 to peak at Bullion Vault. Gold is up 11.6 2005 2010 2015 2020 means that the ETF holds Rathbones said he had sold a everyone asks why you need for the £10k to be borrowing at least
$2,300 by the end of a decade per cent since early March Source: Refinitiv data actual gold bullion instead of large chunk of his exposure to haven’t got more of it.” fee to be worth it £460,000.
The Sunday Times June 13, 2021 13

MONEY

The bottom
which means she is categorised as “unfit
for work”. ESA is a notoriously difficult
benefit to qualify for, and the fact that
government medical assessors decided
that she was eligible convinced me that
she was unable to work.

line is that
Yet Unum, the insurer used by her
employer to provide income protection
as an occupational benefit for its
employees, refused to pay the £37,000
gross a year this reader was due until her
65th birthday under the terms of the

my pants
policy. Instead it offered a lump sum of
£60,000. The reader rejected this offer
because tax would have left her with a
net amount of £39,000 and no income
once her Aviva policies ended.
Unum said there was not enough

were faulty
medical evidence to support this reader
being unable to work during the
deferred period — the first 12 months
after making her claim. The Financial
Ombudsman ruled in Unum’s favour,
saying, “As Unum’s policy requires
medical evidence, I can’t say they were
unfair in declining your claim based on
the information they had.”
What made both decisions infuriating
behalf if an order doesn’t arrive, is was the fact that while the ESA assessors
QUESTIONON faulty, doesn’t match the description or
the seller has gone out of business. I
had conducted face-to-face meetings
with the reader, and Aviva had ordered a
OF MONEYEY would say that your Y-fronts were both medical examination, Unum had not

LEY
JILL INSLEY
faulty and misdescribed — they possibly requested any reports or examinations,
fancied life as boxer shorts instead. and seems to have relied heavily on the
However you told me that Stephen reader’s GP records.

I
am bereft and exposed and only
you can help. Last year I ordered
18 pairs of Y-front underpants from
Stephen Allen Menswear of
Stourbridge. I have placed an
identical order on at least two
occasions with no problem so
when they arrived I just put them
away.
However, when I wore a pair for
the first time the elastic around the leg
quickly became loose, making them
uncomfortable. The same happened
with the next two pairs. I therefore sent
them all back at the beginning of
September, as something had obviously
gone wrong in the production process.
Stephen Allen has done nothing, and
while this is annoying I at least had the
protection of my Tesco credit card. So I
applied to Tesco for a refund under
section 75 of the Consumer Credit Act
only to have my claim rejected because
“there has been no beach of contract”.
There is not a contract in the land that
permits the supply of faulty goods, so I
have challenged the decision. Despite
receiving an acknowledgement and
chasing a response I am still waiting.
Bottom line — I am £100 out of pocket
and have no underpants. Help.
Jill replies
Your Y-fronts cost £98, so were just
under the £100 minimum spending limit
to qualify for a claim under Section 75 of
the Consumer Credit Act. However you
could have qualified for a chargeback
claim, where your bank can ask for your
money back from the seller on your
Allen Menswear did not actually refuse a
refund, so I decided to speak to the
company first. It told me that you had
returned the pants with only some of the
packaging, and what you had returned
was ripped. It said “a few pairs had been
worn and laundered”.
I pointed out that it was quite difficult
to get in a package without ripping the
packaging, and that you wouldn’t have
known the elastic was faulty if you
hadn’t worn them. I would have been
horrified if you had sent the used ones
back without washing them first.
Stephen Allen is not convinced
there is anything wrong with its
Y-fronts, but is making a full refund to
your PayPal account.
Fined £100 because
taxman lost my return
I sent in a paper copy of my tax return
for 2019/20 to HM Revenue & Customs in
July along with my husband’s. In March I
had a letter from the tax office saying
that I hadn’t filed my return or paid my
tax and it charged me a £100 penalty.
I rang immediately that day and was
told that it was HMRC’s mistake and it
had received both our tax returns.
In April I had another letter
containing a £100 penalty notice. I tried
ringing and held on the line for an hour
before giving up. I then wrote to explain
the situation. I also tried calling three
more times to no avail.
I realise that I need to send another
tax return, but you cannot download
them from the HMRC website: the tax
office has to send them to you. As I can’t
get through on the phone that’s a
problem. Meanwhile my penalty is
increasing.Please can you help?
Jill replies
The two returns had been sent in the
same envelope, yet your husband’s was
dealt with while yours went astray. You
tried repeatedly to register to file online
but couldn’t log on. You seemed to have
multiple Gateway IDs to log in to HMRC’s
website and none of them worked.
I asked HMRC to track down the paper
return you had sent in and to sort out
your online access. It told me there were
a couple of mistakes in your return that
needed correcting, so it should have
been sent back to you to be amended,
“but that didn’t happen”. After talking to
you HMRC has corrected the errors,
cancelled the penalty and given you
extra time to pay the tax you owe.
Sorting out your Gateway ID was more
complicated, and required HMRC calling
you at a set time while you had your
computer switched on. Trying to co-
ordinate HMRC and someone who is
enjoying a very active retirement is like
herding cats, but it is now done and you
are planning to file your tax return
online next year. Good luck with that.
Battery failure not
good for my heart
I bought a Move ECG watch for £130 last
July direct from Withings because the
information said the battery would last a
year. In October the battery gave a low
reading and the ECG part, which
monitors your heart, stopped working.
I complained and got a replacement
watch in late November.
On the last day of April the watch
battery gave a low reading and the ECG
stopped working. I sent an email asking
if I could upgrade to a watch that you can
charge at home and pay the difference.
The answer was no, because the
battery should only be expected to last
six months. Considering that I have had
this watch five months, I feel this is not a
good answer. I have not done much
activity over winter and lockdown — in
fact, the only thing I track on the watch
is a weekly walk to buy The Sunday Times
at the Drumnadrochit post office, a
CAN WE HELP YOU?
Please email your questions to Jill
Insley at questionofmoney@sunday-
times.co.uk or write to Question of
Money, The Sunday Times, 1 London
Bridge Street, London SE1 9GF.
Please send only copies of original
documents. Letters should be
exclusive to The Sunday Times.
Advice is offered without legal
responsibility. We regret Jill cannot
reply to everyone who contacts her.
3.3 km round trip. I tend not to go into
town as my husband is over 70 and frail.
I feel the watch fails the description of
what was sold, so can I ask for a refund
as it is not a year since I bought it?
Jill replies
You live about 15 miles from Inverness,
the nearest town you would be able to
get the watch battery changed, and even
though you contacted me in May it was
snowing heavily — far from ideal
conditions to drive up the Great Glen.
It does say on the Withings website
that the watch batteries can last up to 12
months, yet those in the two watches
you tried lasted no more than five
months with minimal use. This perhaps
wouldn’t matter at any other time, but
Covid and lockdown have made
everything more difficult. I pointed this
out to Withings, which was sympathetic
to your situation.
You loved the watch, but have now
happily accepted a full refund.
£200k insurance win
Last October I wrote about a reader who
suffers from chronic fatigue syndrome,
forcing her to stop working in 2016 as a
chartered accountant and manager at a
leading accountancy firm in Northern
Ireland. Her own personal income
protection policies from Aviva paid out,
but the payments stopped on her 60th
birthday a year ago. She also passed
assessments twice to qualify for
Employment Support Allowance (ESA)
I asked Unum if it would consider the
medical report commissioned by Aviva
as part of a fresh look at her case. It
agreed, but still rejected the claim.
However the fact that the reader had
presented fresh evidence to Unum
meant that she could ask the Financial
Ombudsman to reconsider her case. She
also gained access to her ESA medical
reports and these were passed to Unum.
The insurer initially said these did not
change its opinion because the criteria
for ESA differs significantly from income
protection, but this time the FOS
disagreed with Unum’s stance. The
ombudsman pointed out that the Aviva
report and the earlier ESA report, both
carried out during Unum’s “deferred
period”, confirm that chronic fatigue
syndrome left the reader exhausted and
affected her concentration, meaning she
was (and still is) unable to work. The
later ESA report added that her
condition was “unlikely to change”.
The ombudsman recommended that
Unum pay our reader for the time she
has been off work. It took Unum a
further six weeks to calculate that it
owes her £99,247 for backdated benefits,
plus a further £36,925 a year until her
65th birthday.
Unum said: “This case was complex,
and this means that the time to collect
vital information, make complex
calculations and process payment is
more than straightforward claims.”
Collecting vital information is clearly
a good idea — which makes it all the
more puzzling that Unum didn’t
commission its own medical assessment
on this reader instead of basing its claims
assessment on scanty GP records.

£50bn pours into cash Isas,

but returns are at rock bottom
Imogen Tew
Some £50 billion was saved
into cash Isas in the year to
April 2020 to hit a record
total of £313.5 billion, despite
rock-bottom interest rates. In
the previous year savers put
£44 billion into cash Isas.
The total saved in stocks
and shares Isas dropped
3 per cent from £314 billion in
2019 to £305 billion in April
last year, with £24 billion
added in the year.
Some 75 per cent of Isas
are cash products, and with
the best easy-access Isa rate
being 0.47 per cent, savers
are risking losing money in
real terms as inflation eats
away its value.
Inflation has been below
1.5 per cent since March
2020, dropping as low as
0.2 per cent in August. The
Bank of England’s target rate
is 2 per cent.
“It’s staggering that so
much wealth is being lost to
inflation through savers’
attachment to cash Isas,” said
Charles Incledon from the
financial adviser Bowmore
Wealth Group.
If you are saving for a
house deposit that you expect
to need next year, taking
investment risk may not be
the best option because your
funds may not have time to
recover from a market
Nationwide’s Isa has a
backlog of applications
downturn. But if you are
investing for the medium to
long term, taking some
investment risk should
improve your returns.
The data from HM Revenue
& Customs shows that one
million people took out a
Junior Isa ( Jisa) in the year to
April 2020, saving
£971 million. Some 61 per cent
of this is being held in cash.
Holly Mackay from the
financial website Boring
Money said: “By definition
the youngest children with
Jisas are in this for the long
haul. So they can weather the
ups and downs and have a
strong chance of getting
better returns. This is
particularly true when
interest rates are so low and
inflation is rearing its greedy
head.”
The best rate for an
easy-access Isa is 0.47 per
cent from Cynergy Bank,
according to the savings
website Savings Champion.
Shawbrook Bank pays
0.56 per cent, with a
minimum deposit of £1,000 if
you lock away your cash for a
year, while United Bank
Limited pays 0.96 per cent
for three years and 1.21 per
cent if you keep your money
invested for five years, both
with a minimum of £2,000.
Moneyfacts says the best
you can get on a Junior cash
Isa is 2.5 per cent from Bath,
Loughborough and Dudley
building societies.
Savers hoping to open a
Nationwide Isa have been
affected by a backlog that has
left some customers waiting
up to three months to
transfer their money.
Nationwide, Britain’s
biggest building society, said
it was aware of the issue and
that only a “small number” of
customers were still waiting
to transfer money to its
Member Exclusive Fixed Rate
Isa, which pays 0.75 per cent
for 18 months.
It launched in March for
existing customers with a
savings, mortgage or current
account but is now closed to
new joiners.
However, a number of
readers of the Money Saving
Expert website reported
waiting up to three months to
transfer their money.
Transfers between cash Isas
should take less than 15
working days. Transfers
between different types of
Isas should be completed in
less than a month.
Nationwide said that
interest would be backdated
to the date people requested
the transfer, so nobody would
lose out. “Most of these
transfers have been
completed [but] there remain
less than 4,000 outstanding,
which we are processing as
quickly as possible — these
are often where we are
awaiting additional
information.”

Now download the Goldmans app

Kate Palmer
Customers of Marcus, the
online savings arm of the Wall
Street bank Goldman Sachs,
will be able to bank on their
phones with a new app
released this week.
They can view and transfer
money via the app, which can
be opened with a username
and password, with a text to
verify who they are, or
through Touch ID if they
have set up fingerprint
recognition.
The digital bank pays
0.4 per cent for its easy access
account on balances up to
£250,000. Its cash Isa pays
0.4 per cent on balances up to
£20,000.
The rates have dropped
significantly over the past few
years, but the Marcus
account has won plenty
of fans because it is simple
to use.
Goldman Sachs plans to
unveil a robo-advice service,
which provides automated
fund selections and is similar
to the Marcus Invest service it
offers in the United States.
It will offer portfolios that
track particular stock
markets, rather than actively
managed funds run by a
professional stockpicker.
The Marcus app is
available at the App Store and
will soon be on Google Play.
The American investment
bank is also trying to find a
way of expanding Marcus in
the UK without breaking
through the £25 billion
barrier on deposits.
Rules that were introduced
after the financial crisis to
make institutions safer
stipulate that banks with
£25 billion-plus deposit bases
must be ringfenced with
separate capital, which
would limit Goldman’s ability
to cycle the cash into other
parts of its business.
So far Marcus has attracted
about $30 billion (£21 billion)
in savings since launching in
the UK in 2018. It launched in
2016 in the US, where it offers
a credit card with Apple.
14 The Sunday Times June 13, 2021

MONEY

FAME AND FORTUNE DICKIE ARBITER

Are you still
FOX/GETTY IMAGES
equally important to have a property
and money put aside in a pension. I have
a state pension, a private pension and
one from Buckingham Palace.

wearing those
Your most extravagant purchase?
I like cars and have owned 21 since I was
18. Three years ago I bought a good,
classic Sunbeam Rapier — it’s a glorified
Hillman Super Minx with those large

dreadful ties,
extended fins at the rear. It’s an
investment and will appreciate over
time. While it cost under £2,000, it has
the potential of costing me a lot in terms
of repairs and maintenance. It will be

the Queen
61 years old in May and I take it out every
10 days to keep the engine running.

What is your money weakness?

I do spend money on my trademark

asked me
bright, colourful ties, which have been
hand-painted especially for me over
25 years. I’ve even worn them at the
palace. I had one on during a reception
in 2019 for a staff leaving party where
the Queen was present. I was chatting to
The former royal press secretary her and as I was taking my leave she said
with a twinkle in her eye, “I see you’re
raised his daughter alone and loves still wearing those dreadful ties, Dickie.”
They’re unique and one-offs.
a classic car, a beautiful horse and a What is your financial priority?
natty outfit, writes Tony Padman To have enough food, a roof over my

D
ickie Arbiter’s 12 years as
press secretary to the
Queen and the Prince of
Wales gave him a ringside
seat during a time of turmoil
for the royal family. His stint
at the palace included the
end of the Duke and
Duchess of York’s marriage,
Diana, Princess of Wales’s
explosive Panorama interview with
Martin Bashir and her death in 1997.
Dickie, 80, is married to his second wife
Rosemary, and has a daughter, Victoria,
who is a royal commentator in the
United States. After retirement from the
palace in 2000, Dickie became a TV and
radio contributor on royal matters.
How much is in your wallet?
I like to have between £30 and £50
although I don’t keep a wallet. I keep
notes in my back pocket and change in
my side pocket. I like cash. I’m not one
of those people who goes for a £2.90
coffee and pays by card. I like to have a
bit of control over the little things in life.
What credit cards do you use?
I only have a Halifax Mastercard, which
I use to buy things online such as from
Amazon or Marks & Spencer. I’ll print off
a record of it. If there’s anything
abnormal, then the bank’s fraud squad
will call. They’re very good and on
the ball because they check your
spending pattern.
Are you a saver or a spender?
A bit of both. To spend you have to have
money. If you have money, you’ve
obviously saved it. I just need the basics.
As I have grown older, I’ve become
stingier, although many say that I’m not
stingy. I like to be well presented
whenever I appear on television, but I
don’t spend much money on clothes.
I wait for the sales. I think twice before I
go over the top and buy something. I can
prevaricate for weeks and end up not
buying what I thought I wanted to buy.
How much did you earn last year?
It’s not something I discuss. The only
people who know are my accountant
and the taxman, and my agent, Sylvia
Tidy-Harris, might have an inkling of
what I earn. But I did earn enough to be
secure, to fit in a holiday and put a little
aside. It’s comparable with what I
earned at the palace. The only difference
was that there I got a fixed salary, so I
knew what was coming in. I’ve been
freelance since 2000 so I have no idea
what I’ll earn one month to the next.
With Covid there was little to no work.
I couldn’t do my cruise ship talks and
speaking engagements. I have talks and
documentaries in the pipeline but it
remains to be seen if they will take place.
Have you ever been really hard up?
Once, in 1965 I was working for a
children’s theatre in London, which
didn’t pay you for rehearsals. I’d just
arrived from South Africa with about
£300 because that’s all you could take
out of the country. I went through that
pretty quickly paying for a room in
Gloucester Road. For a month I was
living off a loaf of bread, pot of jam and
pack of margarine a week and a daily
carton of milk for sixpence from a
vending machine. I’d walk from
Gloucester Road to work in North
Kensington and back.
In the late 1970s I became a single dad
with a mortgage, school fees and an
au pair to pay, so it was difficult. I was
freelance and was only paid for shifts as
a court and royal correspondent for LBC
and IRN, London’s first commercial
radio station and 24-hour news service.
I survived.
Do you own a property?
Yes. I’ve lived in southwest London for
eight years in a purpose-built late 1960s
block. Before that I was in a top-floor flat
in a late 1850s Victorian conversion off
Kensington High Street. It was nice but
there comes a time when you get tired of
walking up four flights of stairs with
shopping and suitcases. While at
Kensington Palace I had a grace-and-
favour home, one of the last you could
have before you had to pay a percentage
of your annual salary to the royal estate.
Are you better off than your parents?
It’s about the same. My father, who died
in 1946, when I was six, had a
manufacturing business with his two
brothers. He was reasonably well off but
he was ill and much of his money was
spent on medical bills. My mother, who
divorced my father when I was three,
had a good job in London in the fashion
business. But there came a point when
she didn’t see her life going anywhere in
Dickie Arbiter,
with his second
wife Rosemary
and daughter,
Victoria, below,
and at Royal
Ascot in 1988,
above
Britain, so we went to Southern
Rhodesia [now part of Zimbabwe]. She
died there three years ago aged 97.
Do you invest in shares?
No, I don’t. It’s gambling. My father was
a gambler and because he was I suppose
I’m not. Nothing would tempt me.
What is better for retirement —
property or pension?
By the time you’ve retired if you don’t
have your own property then you’ve
probably led a tough life. I think it’s
head, be debt-free and be able to pay my
bills. I used to have private medical
insurance but I gave that up six years
ago. The older I got the more expensive
it became and I had to pay the first £500
of any treatment. I’ve had arthritis in my
hands and the NHS has done three
operations on them. It was wonderful.
What if you won the lottery?
I buy a line on the National Lottery and
one on the EuroMillions costing £5 a
week. I’ve won the odd £10 and it’s the
closest I’ll ever get to gambling. With a
big win I’d buy a horse because I’ve
enjoyed riding ever since prep school.
I’m near Wimbledon and once you get
into that countryside on a horse it’s
magic. Although the Queen loves horses
we never discussed them because you
work for her and didn’t go down to a
personal level.
Do you support any charities?
Cancer Research; a monthly donation to
the NSPCC because I believe there’s a lot
of work to be done in terms of children
being abused; and the British Legion
because of what veterans went through
for us in the past.
What’s the most important lesson you
have learnt about money?
It’s important to have money because
you don’t know when you will need it
and you need to provide for yourself and
your family. When you’re 30 you don’t
think about being 60 and when you’re
50 you don’t think about being 80. For
me, it’s important to put money aside for
the taxman. I make sure I’ve done that —
and if I have to go without, I will.
On Duty With the Queen is published by
Blink Publishing at £8.99, and available
on audiobook. dickiearbiter.co.uk

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More delays at NS&I after India office closes
David Byers
Customer service at National
Savings & Investments (NS&I)
has taken another hit after its
offices in India were closed
because of the latest
coronavirus outbreak.
NS&I’s buildings in the
eastern city of Chennai,
which has 240 staff and is
operated by the outsourcing
company Atos, have been
closed since May 25. The
Treasury-backed bank, which
has 25 million customers,
says it redeployed 121 staff in
the UK to cope with the
shortfall — leaving it 119 short.
Another 159 staff are being
trained.
Staff in the Chennai office
deal with bereavement
claims, complaints and other
letters to NS&I. The offices
also shut for a week on March
25 last year, three days in
April and four days in June.
In a letter to the Treasury
select committee explaining
NS&I’s poor customer service
performance in January, its
chief executive Ian Ackerley
admitted that the Indian
closures had “a significant
impact on the processing of
bereavement claims, general
correspondence and
complaints”.
NS&I said its phone waiting
times had not been affected
by the closure and were still
seven minutes compared
with 20 minutes in the
autumn.

Make a list of ‘good’ payroll firms, taxman told

David Byers
The tax office should put
together a register of tax-
compliant payroll companies
so that freelancers or
contractors do not fall for
avoidance schemes, a
campaign group has said.
The Low-Income Tax
Reform Group (LITRG),
which is part of the Chartered
Institute of Taxation, said that
the taxman should produce a
list of “good” payroll
0.16%
companies (also known as
umbrella companies), so that
freelance locum doctors,
nurses, IT workers and others
can have peace of mind when
they sign up to them.
Freelance workers were hit
with hefty tax bills by HM
Reveue & Customs after
taking part in tax avoidance
schemes run by offshore
umbrella companies.
In its submission to HMRC
in a consultation exercise on
tax avoidance, the tax reform
group said that many workers
were taking part in schemes
because of companies’
“exaggerated promises of
legality”.
HMRC has prosecuted very
few promoters of avoidance
schemes. Many are offshore
and beyond its jurisdiction,
or they are adept at
“phoenixing” — closing down
when they are being
investigated, only for the firm
to reopen later under another
name.

CHART OF THE WEEK A SELLER’S MARKET

Average number of properties for sale, per estate agent The gap between
demand and supply in
70 the housing market
was at its widest since
2013 in May, with new
60 listings falling as
buying inquiries
continued to rise,
50 the Royal Institute of
Chartered Surveyors
said. In May estate
agents had an average
40
of 38.9 houses on their
books, down from 45.5
The average interest in December. The
rate on easy-access 30 average house price
savings accounts, 2010 11 12 13 14 15 16 17 18 19 20 21 hit a record of £261,743
according to the data Source: RICS in May.
firm Moneyfacts