A quartet of news stories all point in the same troubling direction. First, easyJet is about to become the latest notable name to leave the London Stock Exchange, following last month’s takeover of Tate & Lyle by a US buyer. The FTSE 250-listed low-cost airline is keen to accept a £5.5 billion offer from Castlelake, a private equity firm that’s also – you’ve guessed it – from the US.
Inherent volatility in the aviation business combined with the presence of founder Stelios Haji-Ioannou as a minority shareholder has made easyJet a turbulent long-haul flight for investors. The shares have rocketed since Castlelake came into the picture, so cashing out looks rational – but the predation of our public market by foreign bargain-hunters goes on and on.
Then there’s a report of institutional investors in housebuilder Barratt Redrow demanding share buybacks, designed to re-inflate a share price that has halved since 2023 and to return cash to shareholders that might otherwise be deployed to acquire land for Barratt developments. This column tends to frown at the buyback mechanism, because arguably it signifies a business that has lost the courage to invest in its own future; it also indicates fear of cut-price takeover bids. But Barratt is Britain’s biggest housebuilder at a time when an urgent national need for new homes is high on the political agenda. The investors’ threat of a ‘boardroom coup’ if they don’t get their money back tells us something is seriously amiss.
Likewise, though less obviously, the £750 million Barclays has committed to buy a 999-year lease on its Canary Wharf HQ is capital that won’t be directed towards lending to businesses, despite the relaxation of Bank of England restrictions as a last gasp of Rachel Reeves’s forlorn push for growth.
And finally, a British Chambers of Commerce survey tells us that only 17 per cent of UK companies plan to increase investment in plant, machinery and equipment in the coming quarter; 26 per cent say they will actually reduce capital investment. The driving forces of capitalism, large and small, are pragmatic self-interest, ingenuity and optimism. Companies do whatever they have to do to survive and prosper. But in their different ways, all these stories sound dire warnings: of a demoralised UK economy held back by dysfunctional capital markets.
Trump’s steaming pile
Very little of my life’s work is likely to survive on YouTube, but I’ll always be proud of a clip from a Spectator event some years ago in which I described the ‘anarcho-libertarian’ creed espoused by cryptocurrency advocates as ‘a pile of horseshit’. I continue to regard their dismissal of central banks and ‘fiat’ currencies as a shallow excuse for being hypnotised by the fast-moving bitcoin price, with no more intellectual underpinning than a Las Vegas slot-machine.
But crypto itself is not inherently evil; it’s a smart use of digital mechanics. What’s repulsive are the people who make fortunes from it at the expense of the gullible. Never mind those chancers in the spotlight around Nigel Farage; consider the case of Donald Trump, who once said crypto was ‘based on thin air’ but whose latest disclosure offers the precise figure of $1,430,390,415 (just over £1 billion) in crypto earnings while in office last year. That includes $635 million from the venture behind the Trump ‘meme coin’ whose price has plunged at punters’ expense. A lasting symbol of this president’s shameless corrosion of democracy will be his steaming pile of crypto winnings.
Air con
At the height of the recent French heatwave (there’s another cooking) we were 11 for lunch. The dining room was shuttered to keep it relatively cool. But as the heat rose with the bodies and the debate, a resourceful American guest found the nearest thing in the house to an air conditioning unit – an avant-garde fan with a water-vapour feature and a twinkling digital panel – and seated it on the 12th chair. ‘It’s our AI robot,’ I explained to my puzzled French neighbour. ‘If anyone mentions Brexit, Trump or the World Cup, it flashes red and breathes smoke. Look!’
Aircon and ‘air cooling’ are in every sense this summer’s hot consumer issue. A domestic air conditioner used to be an £800 fridge-sized box with an exhaust hose; suddenly, we’re bombarded with ads for bargain-priced mini-coolers barely bigger than toasters. But as the Guardian points out (alongside an ad for ‘Cooling Ace’ devices embedded in the online piece), some of these offers are scams, using fake Aldi websites. And one of the first to pop up on Amazon, a ‘6-in-1 portable air conditioner… with ice pack’ for £119.99, is reviewed as ‘weak, noisy, unreliable’ and ‘just an expensive fan’.
For true Brits, aircon in the home is as foreign as a bidet. But there’s an opportunity for innovators to come up with an efficient, low-energy, sub-£100 room-cooler that might sit quietly on, say, the bookshelves of an old vicarage. If it could be disguised as bound volumes of Spectator back-numbers, I’m sure we’d lend our name to it.
Party politics
Two highlights of last week’s Spectator party. The supermodel-tall ex-New York fashion journalist Plum Sykes told me she loved my outfit. And Lance Forman, purveyor of the ‘London cure’ smoked salmon that was one of the evening’s treats, delivered an off-the-cuff expression of entrepreneurial spirit I wish I’d been able to record. The gist was that whatever fate and government throw at you – in his case including salmon diseases and compulsory purchase of his Stratford smokery to make way for the London Olympics, as well as Labour’s NIC hike and other current cost factors – all you can ever do is battle on and strive to be better than your competitors. Note to Andy Burnham: whatever your plans, they’ll only ever be funded by tax revenues from a resilient private sector, so for heaven’s sake don’t make business conditions even worse.
Comments