Martin Vander Weyer

Surprisingly big numbers are the theme of this week’s column, several having flashed up to disturb the pleasures of a summer season of parties, music and sport. The first is the 69,000 tally of jobs shed in the UK hospitality industry since the increase in employer’s national insurance contributions in October’s Budget – the most destructive legislative measure for business in recent memory, except perhaps for the Employment Rights Bill that’s expected to receive Royal Assent before parliament’s recess this month. The UKHospitality trade association thinks losses could rise to between 150,000 and 200,000 by the autumn, as 70 per cent of member businesses cut more staff and pub closures (of which 303 were reported in the first quarter) continue apace.

I’m fresh out of advice for those now leaving university and wondering how on earth they’re going to make a living and live their dreams. This week’s bad news (from the job search website Adzuna) was that graduate and other entry-level vacancies have fallen almost a third since the launch of the AI chatbot. Should this unlucky post-Covid cohort stay on at ‘uni’ for another degree? Or does that mean racking up student debt without enhancing employability? I used to urge everyone to go abroad in their twenties before family responsibilities overtake. But where to now? Hong Kong and mainland China are out; it’s the wrong time to go to America or the Middle East; they’ll need work permits for the EU.

One peril of a sudden adverse turn of global events is that it provides cover for bad domestic government. If confidence is knocked by fear of war, if inflation blips because the Strait of Hormuz is blocked, if demand for defence spending sends budgets awry, voters may easily be persuaded that Middle East conflict, rather than Labour policy, has put the UK economy flat on its back. But that’s no excuse for proceeding with bad legislation as the world darkens – and one such item is Angela Rayner’s Employment Rights Bill, currently under House of Lords scrutiny, which in brief summary confers fearsome powers on trade unions and creates a ‘Fair Work Agency’ to interfere in business in all sorts of other ways.

Well, would you look at Mark Carney. Just three months ago I described the incoming prime minister of Canada and former governor of the Bank of England as ‘a fish-out-of-water technocrat’ who made little public impact over here and was swiftly forgotten after he left in 2020. When I once came across him hunched and dark-suited in the Pret queue at King’s Cross, midway through his Bank tenure, I actually felt sorry for him. But here he is, beer-swigging in an Ottawa bar with Sir Keir Starmer; cutting Donald Trump short in a press call before the G7 meeting; shedding his eco-credentials to champion Canadian oil and gas; and generally looking the statesman at ease with his people. What happened?

The Chancellor’s promise of £14 billion for the Sizewell C nuclear power station in Suffolk is hardly news. The project has been talked about for 15 years while the existing UK nuclear estate has gradually been shut down and the only other new station, Hinkley Point in Somerset, has stumbled to a decade-long delay and £28 billion of budget overruns. Quite some optimism – verging on Milibandian delusion – is required to embrace the idea that Sizewell will come quicker and cheaper because it will replicate Hinkley Point while avoiding its mistakes. And since Chinese money has been ruled out, it’s still a mystery as to who else will pay for the project beside HMG and the French utility company EDF.

NatWest has returned to full private-sector ownership 17 years after the £46 billion bailout that took it into state hands – and five years after the name swap which reduced the once globally trumpeted Royal Bank of Scotland to a humble north-of-the-border branch network, while promoting its English subsidiary NatWest to become the parent brand. RBS shareholders who were almost wiped out but hung on to what are now NatWest certificates have seen their shares triple in value since 2023, finally surpassing the bailout price. HM Treasury took a £10.5 billion loss on the whole rescue exercise, which required a decade-long series of placements and buybacks to filter the taxpayers’ 84 per cent holding back into the market as the bank’s performance gradually recovered.

An awkward delay in the unveiling of the Mansion House Accord was, we’re told, nothing more than a Downing Street ‘timetabling issue’. It was perhaps a tenterhooks issue too, as Donald Trump’s Sharpie hovered over the UK-US trade deal which was clearly going to make bigger headlines. But the Accord also had to contend with City discord around the issue of ‘mandation’ of pension funds to invest in unlisted equity that might contribute to future UK growth. In July 2023, 11 institutions inked the first Mansion House ‘compact’, committing 5 per cent of ‘defined contribution’ pension monies to private equity by the end of the decade. Now 17 industry leaders have committed to upping the target to 10 per cent, at least half of which will back UK ventures.

There’s nothing new about bringing maverick businesspeople into government to give the bureaucratic blob what an unnamed ‘Trump adviser’ was recently quoted as calling ‘a swift kick in the ass’. After all, it was David Cameron who in 2010 hired the now all but unmentionable retail buccaneer Sir Philip Green to find ways to cut Whitehall waste. But Donald Trump’s conferment of the role of solo global peacemaker on his real-estate buddy Steve Witkoff – who has no known foreign policy or government expertise – takes that idea to a scary new extreme. Take a look on X at a clip of him arriving alone to meet Vladimir Putin and a line-up of Kremlin heavies. When a woman, face unseen, takes the seat next to Witkoff, he turns to her and says: ‘Are you my translator?

Donald Trump’s Soprano-like threat that the ‘termination’ of Federal Reserve chairman Jerome Powell ‘cannot come fast enough’ has been headlined as one of his wildest thrusts to date, but is actually one of his most conventional. Prickly politicians always resent unelected central bankers, though they also see them as useful scapegoats for economic trouble. Liz Truss longed to fire Andrew Bailey from the Bank of England; Gordon Brown gave Eddie George’s Bank its ‘independence’ but took away so much of its power that George nearly resigned; Margaret Thatcher never accepted the most potent modern governor, Gordon Richardson, as ‘one of us’.

The City’s self-styled ‘cheerleader in chief’, Lord Mayor Alastair King, on a recent visit to Beijing and Shanghai found leading Chinese banks keen to expand in London. What with Chinese diplomats also keen to establish a fortress-embassy at Royal Mint Court on the City’s eastern edge, that may ring alarm bells with those who regard Xi Jinping’s neo-Maoist regime as anything but friendly. But as King also observes, ‘the tectonic plates are shifting’. All geopolitical relationships are up for review – though what follows is my own analysis, not the Lord Mayor’s.

The Digital Services Tax (DST) is a relatively easy bargaining chip to give away in a last-ditch bid to appease Donald Trump, whose final menu of tariffs on UK exports to the US is expected imminently. First tabled by Philip Hammond as chancellor in 2018 and enacted by his successor, Sajid Javid, two years later, this 2 per cent levy on tech multinationals with more than £25 million of UK digital revenues was always seen as a raid on the likes of Apple, Amazon, Netflix, Google, Meta and Microsoft,  though it must by now also catch Shein and other Chinese operators – and was always a provocation to the White House. Within months, there were rumours that Boris Johnson’s government was ready to scrap DST to secure a longed-for UK-US trade deal.

"You can’t make an omelette without breaking eggs" is a maxim attributed to leaders on both sides of the French Revolution. "Move fast and break things" is today’s equivalent, emanating from Silicon Valley and amply demonstrated by Donald Trump and Elon Musk in their approach to government and geopolitics. "You can’t make omelettes at all if you can’t afford eggs" might be the next variant: inflation and scarcity afflicting America’s favorite breakfast have become a major political issue. In brief, a dozen US eggs used to cost $2 or less but by January this year the supermarket price was $5 and rising – in some places $9 was reported, rationing had to be introduced and Mexican suppliers were spotted smuggling truckloads across the border.