Any other business

How surprising to read one former Tesco chief, 82-year-old Lord MacLaurin, badmouthing another, Sir Terry Leahy. The surprise is because both were titans of their trade and Leahy has always been seen as Ian MacLaurin’s protégé: it was MacLaurin who took Tesco to the top of the UK supermarket league in the mid-1990s, then Leahy who quadrupled its sales, profits and share price between 1997 and 2011 to make it the monster we know. But Leahy also took Tesco into a disastrous US grocery venture and — according to MacLaurin, talking to the Sunday Times — started ‘the rot’ that brought the company low by 2014, leaving the blame to be taken by his own successor, Philip Clarke.

Hounds are baying for the blood of former star investment manager Neil Woodford, whose shrinking funds have closed for withdrawals. His promoters such as the broker Hargreaves Lansdown have also been taking media flak, as has the Financial Conduct Authority, whose critics say it should have spotted the problem early and intervened. There are suggestions that Woodford and his associates have made ‘a huge pile of money’ (to quote Merryn Somerset Webb in the FT) out of an over-puffed venture in which small investors are now stuck — and that all those responsible should queue up for a public lashing from the Treasury select committee. So it goes: as a parable of financial hubris, this looks like an open-and-shut case.

We don’t hear enough about Network Rail these days. By that I mean that the entity recently described by the Sunday Times as ‘synonymous with incompetence and delays’ doesn’t receive anything like the abuse it deserves for failing to provide the infrastructure essential for a 21st-century railway. I refer you to the Crossrail project, in which the inability of new trains to connect with old Network Rail signalling systems is one reason for the delayed opening that has become a major national embarrassment. I invite you to observe LNER’s expensive new fleet of Azuma bullet trains that were due to launch in December but delayed by incompatibility with Network Rail signals.

The cryptocurrency winter has turned to spring: having slumped from $20,000 in late 2017 to $3,200 a year later, bitcoin has lately risen like a rocket to $8,800. Though it doesn’t change my negative opinion, I admit that if I had bought a fistful of these wacky gaming chips last October when I gave the crypto concept a kicking at our Spectator conference on the subject, I’d be up almost 40 per cent. Evidently, hints from the US Federal Reserve and the European Central Bank that further bouts of ultra-low interest rates and quantitative easing may be in the offing have spurred what the FT calls ‘a rally in riskier assets’. Crypto is the new gold for those who distrust central banks and seek stores of wealth that governments can’t reach.

This column has long been a fan of the concept of ‘challenger banks’ offering alternatives for personal and small business customers who were mistreated or underserved by the big banks before and after the 2008 crash. Most challengers were internet-based, but Metro Bank — founded in 2010 by US entrepreneur Vernon Hill, whose early career was spent developing sites for McDonald’s — was different. Its model was predicated on an expensive chain of bricks-and--mortar branches (referred to as ‘stores’, open seven days a week, and with 200 planned by 2020) at a time when the likes of NatWest and HSBC were withdrawing from the high street as fast as they could.

If you’re a bloke in a suit who’d like to apply for the governorship of the Bank of England (deadline 5 June), I suggest you browse the website of Sapphire Partners, the headhunters appointed by Philip Hammond to conduct the search. Run by ex-JPMorgan banker Kate Grussing with an all-female team plus Cherie Booth and Lady (Barbara) Judge on its board, the firm declares: ‘We are trailblazers [as] advocated for women in business.’ You’ll probably already have read the job spec on the Cabinet Office website, which refers to candidates as ‘she/he’.

If you know my personal history with Barclays, you may be wondering whether I’m for or against Edward Bramson. To recap, I’m a former second-generation employee of the bank as well as the custodian of a family shareholding that’s never likely to be sold — and nowadays, rather miraculously given everything that’s happened to me and the bank since I left 27 years ago, a recipient of its pension largesse. Bramson, by contrast, is a Johnny-come-lately: a New York-based ‘activist investor’ whose firm Sherborne has become Barclays’ third largest shareholder by building a 5.5 per cent stake, and who is seeking a seat on the bank’s board at next week’s annual meeting.

‘Virgin trains could be gone from the UK in November,’ blogged Sir Richard Branson from his billionaire hideaway after the Department for Transport barred Stagecoach, Virgin’s 49 per cent joint-venture partner, from bidding for new passenger rail franchises. This followed a row over Stagecoach’s reluctance to help fill a £6 billion black hole in the Railways Pension Scheme – and affects Stagecoach’s bids for the East Midlands and South Eastern franchises as well as the renewal of Virgin’s West Coast Main Line service. Branson is always a sore loser on the rare occasions the dice don’t roll his way, but I doubt many travellers will mourn the passing of his trains.

Business investment in the UK declined in all four quarters of 2018 to complete a year-on-year dive of 2.4 per cent, according to the ONS. These are the worst capital spending figures since the 2008 crisis, and you’ll guess where the Bank of England places the blame: weaker global growth hasn’t helped but the ‘UK-specific factor’ is ‘a growing portion of [companies] putting new capital investment on hold until there is greater clarity around Brexit’. Amid reports that factories are focused on stockpiling components ‘at the fastest rate on record’, no one expects investment for the first half of 2019 to look stronger.

How big is Brexodus — the flight of business and people from the City of London in parallel with our exit from the EU? I observed recently that squealing from the Square Mile has been minimal compared to sectors that make and move physical goods — suggesting that banks, insurers and investment houses have quietly completed all the necessary rejigging of domiciles and compliance that will permit them to carry on making money willy-nilly. There’s been plenty of paddling beneath the City surface. A report by the New Financial thinktank ‘identified 275 firms in the UK that have moved or are moving some of their business, staff, assets or legal entities from the UK to the EU’.

It never works to take two unhappy companies and blend them into a bigger pile of misery. That’s the way it looks at the investment giant Standard Life Aberdeen, known to some as ‘Staberdeen’, where Aberdeen Asset Management founder Martin Gilbert seems to have just lost a power struggle with his former co-chief executive Keith Skeoch from the Standard Life side. And that’s certainly the way in Frankfurt, where Deutsche Bank and Commerzbank are being shoved together by pressure to create what German finance minister Olaf Scholz foresees as a national champion that would be the second largest lender in the eurozone (after BNP Paribas of France) and impregnable to foreign takeover.

Was Help to Buy a timely market intervention with a valid social purpose or a political gimmick that unintentionally showered housebuilders with taxpayers’ cash? Or both: this isn’t a straightforward question. ‘This government supports those who dream of owning their own home,’ said a statement from Philip Hammond last week. So far the ‘equity loan scheme’ launched by George Osborne in 2013 and now extended until 2023 has underpinned 194,000 home sales, the great majority to first-time buyers in the provinces, while another 300,000 have been supported by a £3,000 savings top-up.