Monday 9 January 2023

DOUBLING DOWN

JACK BARNETT

RISHI SUNAK yesterday claimed inflation will halve this year “because of the plans [the government] have put in place”, but experts warned he has no blueprint to lift the UK economy out of recession.

Speaking to the BBC’s Sunday with Laura Kuenssberg programme, the Prime Minister doubled down on a series of pledges he made in his maiden speech of 2023 last week.

Sunak promised to slash inflation, get the debt pile down, grow the economy by

the end of the year, tackle the migrant boat crisis and cut NHS waiting lists.

Critics have pointed out that the Prime Minister’s commitment to halve inflation –which has surged to a 40-year high of 10.7 per cent –had already been forecast by the Bank of England and Office for Budget Responsibility in November.

The rate of price increases seems to have passed its peak, with latest Office for National Statistics numbers revealing it fell from 11.1 per cent in October.

Andy Haldane, former chief economist on Threadneedle Street, cast doubt over

Sunak’s promise to boost the economy, saying the government does not have “a growth programme at all”.

City analysts think Britain has already tumbled into a slump that risks lasting all year. New GDP figures out on Friday are expected to show the country is in a recession in all but name.

Experts have pointed out inflation will naturally fall due to so-called base effects, when high prices drop out of calculations, forcing the headline rate lower.

Energy prices, which have led inflation higher, have also dropped back to pre-

Russian invasion of Ukraine levels, and experts at Investec and Cornwall Insights think this summer the energy bill cap will actually fall below the government’s April uprated £3,000 peg.

However, Sunak said the inflation decline will be driven by “a function of having a responsible economic policy when it comes to things like pay, when it comes to areas like borrowing”.

The Prime Minister also warned on pay hikes for striking health and transport workers, saying the government “can’t help anybody” unless inflation falls.

Funding falls but City still leads rivals

CHARLIE CONCHIE

INVESTMENT into the UK’s fintech sector slumped eight per cent last year but remained well ahead of rival hubs in Europe and Asia amid a sharp global slowdown, fresh data reveals.

Soaring inflation and the shocks of war in Ukraine brought an end to a decadelong global venture capital frenzy last year.

The UK’s fintech sector attracted some $12.5bn (£10.3bn) worth of capital, down from a bumper year in 2021 which saw $13.5bn pumped into the country’s fintech firms, according to data shared exclusively with City A.M. from the UK’s fintech industry body Innovate Finance.

London firms attracted the lion’s share of the investment with $10.2bn invested in 2022, down only five per cent from 2021 amid a sharp, worldwide slump.

Contractions in UK funding were markedly smaller than the global average as total global investment fell by nearly a third to $92bn, with the total number of investment deals around the world tumbling to 5,263 from 6,146.

Innovate Finance chiefs said the sector was showing muchneeded resilience.

CITY A.M. REPORTERS

SIR RICHARD BRANSON has warned the UK no longer appreciates entrepreneurship –as he prepares the UK’s first ever rocket launch.

Virgin Orbit is set to send a 747 named Cosmic Girl to 40,000 feet as soon as this evening –taking off from a spaceport in Cornwall –at

which point it will then release a rocket attached to its wing into space, sending seven satellites into orbit.

Branson has told LBC, in an interview to be broadcast later today, that despite the successes of market capitalism, there is a danger the UK public at large does not necessarily see it the same way.

Asked if there was a “lack of appreciation” of entrepreneurship in the UK and whether “people don’t appreciate the benefits of what private enterprise can actually bring”, Branson said: “I think that’s true.”

“There’s a lot of people that do, but a lot of people that don’t,” he continued.

Branson also describes the use of the term “billionaire” as “slightly demeaning” as it

“What I’ve tried to do is create things that people like, that enhance the Virgin brand, and that at the end of the year more money comes in than goes out.”

Branson’s rocket launch marks a step forward in the UK’s ambition to become a space superpower, as more firms look to put high-end tech into orbit.

implies entrepreneurs are only in it for the money.

Sir Richard Branson’s latest mission could begin today

STANDING UP FOR THE CITY

Look carefully and there are reasons to be cheerful this year

THE old Chinese proverb or curse –‘may you live in interesting times’ –seems rather apposite these days, particularly as we print our first edition of 2023. It is fair to say the paper is not overburdened with optimism –even our story that the tech giants’ layoffs may not hit the UK as hard as elsewhere is hardly cause for celebration. That does not mean, though, that there is cause only for negativity this year. Indeed there are, dare

THE CITY VIEW

we say it, some reasons to be cheerful.

First, the forces that have driven us into recession as the calendar turns are already showing signs of losing their momentum. We are past the peak of inflation. Energy prices on the wholesale

market are falling and will, in time, pass through to consumers –saving not just households but the government a decent chunk of change. Second, the grown-ups are in charge. Rishi Sunak’s oddly lecturous tone can grate when he is delivering a speech, but his answers to questions from the media at a press conference last week were detailed, honest and fulsome. It is a stark contrast to previous holders of the Downing

Street keys, and whilst his brand of high-tax, high-spend Conservatism has few fans at this newspaper it is abundantly clear that we are unlikely to wander, Truss-like, into any global finance minefields.

And thirdly, perhaps more important than any other, is the waking up of the establishment to Britain’s biggest problem: its lack of growth. The head is no longer buried in the sand: it must become a national mission to get

the country growing again, and sharpish. Without growth we simply cannot fix any of Britain’s other ailments –from reforming the NHS to equipping the next generation with next generation skills.

Make no mistake, this year will be challenging. It is unlikely to be a year looked back warmly upon, not least as it would cost too much to heat the memories. But all is not lost –in this city, nothing ever is.

WHAT THE OTHER PAPERS SAY THIS MORNING

‘MORTGAGE LOTTERY’ TO TEST FINANCES OF UK’S MIDDLE EARNERS

Mortgage borrowers face being stranded on the wrong side of a growing debt divide if they have to refinance a fixedrate home loan this year, with younger homeowners set to be hit the hardest.

THE TELEGRAPH

BOLSONARO SUPPORTERS

STORM BRAZILIAN CONGRESS

Supporters of Brazil’s far-right expresident Jair Bolsonaro pushed through police barricades and stormed the national Congress building yesterday in a dramatic protest against President Luis Inacio Lula de Silva’s inauguration.

THE GUARDIAN

SINGLE-USE PLASTIC CUTLERY AND PLATES TO BE BANNED IN ENGLAND

Single-use items such as plastic cutlery, plates and trays are to be banned in England in a bid to reduce pollution, the government has said, confirming reports made last month.

Jobs market on the turn? Survey suggests firms mulling cuts

EXCLUSIVE JACK BARNETT

LAYOFFS are on course to climb, driven by businesses cutting costs amid what risks being the longest UK recession in memory, exclusive research shared with City A.M. indicates.

Firms are planning to pause hiring or even sack workers to protect their finances from a slump in spending sparked by the cost of living crisis.

Nearly four in five companies plan to keep staffing levels unchanged in 2023, according to figures compiled for City A.M. by small business lender Iwoca, suggesting uncertainty over the pending economic slump is set to freeze the jobs market.

The figures add to the growing list of recent surveys signalling the country is in the early stages of a drawn-out slowdown.

Last week, purchasing managers’ indexes from S&P Global and CIPS confirmed the services, construction and manufacturing sectors are shrinking.

Fresh GDP figures out this Friday are expected to show the economy contracted around 0.3 per cent in November, meaning the country almost certainly met the technical recession definition – two back-to-back quarters of negative growth – in the final three months of 2022.

Separate research by consultancy BDO reinforced Iwoca’s numbers, with its employment index in December

tumbling to its lowest level since January 2022, when the UK was winding down Covid-19-related restrictions.

Hiring plans are also the bleakest since the final months of 2020, a period in which most Britain was locked down to tame the rise in Covid-19 cases.

“Inflation and supply chain pressures are clearly being felt across the board, as employers pause recruitment plans and consider redundancies to manage rising costs,” Kaley Crossthwaite, partner at BDO, said.

The Bank of England has warned the UK recession could be the longest in a century, but only if it raises interest rates above five per cent, which it is now believed to be unlikely to

The most likely outcome based on City economists’ projections is for the slump to last the whole of 2023, which would still be relatively long. However, the around two per cent GDP hit would

make it a shallower recession by comparison.

BDO’s output index ticked up slightly to 91.65, but the reading is still below the 95 point threshold that separates growth and contraction, indicating activity has settled at a lower level.

Its inflation index did cool for the second month in a row to 117.91, chiming with economists’ predictions that the rate of price increases has passed its peak and will fall throughout 2023.

According to the Office for National Statistics, inflation dropped to 10.7 per cent in November from 11.1 per cent. In the US, policymakers too believe inflation is set to slip down again in the coming months.

BLESS’D RIVER The Parishes of St Magnus the Martyr and Southwark Cathedral come together on London Bridge to bless the River Thames yesterday –if not the weather

THE FINANCIAL TIMES

Bank boss Andrew Bailey

BDO under the spotlight over Home REIT audit

CHARLIE CONCHIE

BDO is facing questions over its audit of troubled property investor Home REIT, after it was asked to look again at the social housing firm’s books amid accusations executives had been ‘round-tripping’ revenues and inflated the value of its property portfolio.

Home REIT, which invests in housing for vulnerable groups, was forced to delay the publication of its annual accounts in December in order for BDO to deep-dive into its books, following a slew of critical reports on the firm from short seller Viceroy Research.

However, BDO has now come under fire from activist investor The Boatman Capital, which has raised concerns over the independence of its audit process.

In a letter seen by City A.M., analysts at Boatman questioned the fact that Home REIT’s finance chief James Snape was previously a member of the BDO real estate audit team and asked for clarity on how the audit would be con-

ducted “independently, without favour or undue influence”.

Boatman, which last month published an open letter calling for Home REIT’s board to be sacked, has also flagged concerns over the source of Home REIT’s revenues and the value of its property portfolio, after it emerged that commercial property firm Knight Frank had never entered many of the properties it valued.

Recordings of investor calls heard by City A.M. revealed that Home REIT chiefs instructed Knight Frank not to enter its properties before valuing them. Home REIT insists it is standard practice in the industry and was done to protect vulnerable residents.

Trading in Home REIT was suspended last week due to the delays in filing its accounts.

Home REIT has insisted the allegations against it are “baseless and misleading”. Home REIT and James Snape did not respond to City A.M.’s request for comment. BDO declined to comment.

EY builds post-split consulting war chest

LOUIS GOSS

EY is creating a $2.5bn (£2.07bn) war chest to fund an M&A spree for its newly-separated consulting arm, as it pushes ahead with plans to spin off its advisory arm into an entirely separate firm.

The firm wants to double the pace of its dealmaking, according to a report in the Financial Times.

EY’s management have also set aside a further £300m-plus for use in building a brand for the new

Venture capital dries up amid higher interest rates but fintech still thriving

CONTINUED FROM PAGE 1

Innovate Finance chief Janine Hirt said the UK’s sector was ahead of its European rivals and stayed robust in the face of the global downturn.

“UK fintechs are holding the fort in securing great levels of investment in challenging economic times, a testament to the resilience and strength of our sector,” she told City A.M.

“Our latest report shows that the UK is still receiving more investment in fintech than all of the next 10 European countries combined, and remains second in the world only to the US.”

Sharp rate hikes by central bankers and souring perceptions of highgrowth loss-making firms have shifted the landscape for fintech investment and caused venture

capital firms to rein in their investments.

Volatility on global markets has also largely scuppered planned IPOs and led to high-profile valuation ‘haircuts’ for fintech firms.

London firm Sumup, for instance, was reportedly targeting a $20bn valuation at the start of the year but was forced to row back the plans and raised $590m at an $8bn valuation.

consulting business, which is set to be floated in New York.

EY confirmed the news when contacted by City A.M. yesterday.

The newly listed company will be entirely separate from EY’s existing audit and assurance business and will operate under a different name.

The investment plans seek to ensure EY’s newly-independent consulting business retains its market share, following its split from the rest of the firm.

EY’s newly-spun out consulting

arm will in turn be able to make more of any acquisitions, thanks to being free from conflicts-of-interest rules that prevent it from selling advice to audit clients.

The conflict-of-interest rules mean EY currently has to drop any clients obtained through acquisitions, if they are audited by EY’s assurance business.

The situation means any business acquired by EY loses around 25 per cent of its revenues after being picked up, a firm bigwig told the FT.

Innovate Finance chief Janine Hirt said the UK had ridden out the worst of it

The split is set to signal a new chapter for the Big 4 firms

Handmade Christmas presents and decorations boost Hobbycraft sales

HENRY SAKER-CLARK

ARTS and crafts retailer Hobbycraft saw sales lift higher over the key festive period as customers sought to make Christmas gifts and decorations.

The high street chain also said it was boosted by soaring sales of jigsaw puzzles, which returned to significantly greater popularity over the past year.

Hobbycraft revealed that total sales grew by 7.2 per cent over the seven weeks to December 26, compared

with the same period last year.

It highlighted that like-for-like sales grew by 5.5 per cent as it also benefited from new store openings.

The company said “strong” underlying growth in store sales was aided by investment in the firm’s new website and quicker click & collect services.

It said click and collect orders increased by 54 per cent, making up 40 per cent of all online orders.

Hobbycraft said the increased demand for handmade Christmas

Ofgem industry reforms get EDF seal of approval

EDF ENERGY has backed Ofgem’s planned reforms for the energy market, despite criticism from rival firm Centrica that the measures will not go far enough to clean up the energy industry.

Ofgem’s new demands for energy suppliers, announced last November and due to be rolled out this year, aim to reform an industry that has seen 30 suppliers collapse over the past two years and is estimated to have cost customers £400m.

EDF praised the watchdog’s decision to bring in capital adequacy demands, with a spokesperson telling City A.M.: “EDF remains supportive of Ofgem taking measures to improve the financial resilience of the retail market, which will lead to more sustainable competition in the long term, to the benefit of consumers.”

Tougher financial requirements will include the introduction of capital adequacy demands, but will stop short of the full ringfencing of customer credit balances, a policy which has been at the centre of a protracted industry spat.

It comes after British Gas-owner Centrica made contact with consumer rights charity Citizens Advice, asking for its support to bring in disclosure requirements across the industry to help protect consumers, The Guardian reported.

Centrica’s group general counsel Raj Roy wrote while disclosure requirements would not be “an effective substitute for the robust protection of customer credit balances”, they would help improve accountability.

Centrica reportedly has expressed “profound concern” over the financial resilience of some of its competitors, while boss Chris O’Shea in November slammed Ofgem’s decision not to bring in ringfencing.

Currently, firms are not required to ringfence customer credit balances, allowing them to be used for investment.

O’Shea said the decision not to revise the policy showed “lessons have still to be learnt” from the energy crisis. Centrica estimates customers have lost £400m from collapsed suppliers, based on data from requests for information.

items boosted sales of wreaths, brushlettered baubles and crackers.

The retailer also revealed that sales of jigsaws jumped 220 per cent against the same period last year, while it witnessed an 18 per cent increase for its Kids Crafting Kits.

Dominic Jordan, chief executive officer at Hobbycraft, said: “We are delighted to report a robust set of results for Christmas, as our customers invest in thoughtful, personalised, and handmade items, whilst also being at great value.”

Skyrocketing energy costs alongside political chaos has put investment in UK manufacturers at risk, a new report has warned

‘Clock ticking’ for manufacturers: Make UK

ALAN JONES

THE POLITICAL chaos of the last year has hit the competitiveness of the UK as a place to manufacture and made it less attractive for foreign investment, according to a new report.

Two in five of more than 200 firms surveyed said they believe the UK is now less attractive to foreign investors, while more than half warned that ongoing political instability was damaging business confidence.

Almost three-quarters of respondents to the Make UK survey expected their energy costs to increase

this year, with two-thirds predicting reducing production or cutting jobs despite the government energy support package.

Three out of five manufacturers said they were increasingly concerned about energy blackouts affecting their business.

Make UK warned that a less generous relief package may not shield companies from the worst of these increases, while excluding some companies which have a high energy exposure but do not currently fall under the traditional ‘energy intensive’ definition.

Stephen Phipson, chief exec at Make

UK, said: “The year ahead is going to be very challenging for manufacturers with a potent mix of factors testing their resolve: ongoing supply chain disruption, access to labour and high transport costs which show no sign of abating can be added to a growing sense of economic and political uncertainty in their main markets.

“The biggest risk, however, remains the eye-watering increases in energy costs, which has left the clock ticking for many companies.

“While an extension of the energy relief scheme will be welcome, to date it has just been a sticking plaster,” Phipson added.

Businesses missed out on £300m of pandemic business rates relief

HENRY SAKER-CLARK

BUSINESSES hit hard by the pandemic missed out on around £300m of business rates relief, according to analysis of new government figures.

The government has handed out only 80 per cent of the cash available from its £1.5bn Covid-19 Additional Relief Fund (CARF), which was

designed to aid businesses such as commercial landlords which were not covered by other tax relief schemes, according to analysis by Gerald Eve.

The CARF was announced in March 2021 to help those not covered by the Treasury’s Retail, Hospitality and Leisure Relief Fund and other packages.

However, the onus was put on local

authorities to allocate funding to businesses, with many slow to pay out support, according to Gerald Eve.

The fund was introduced to replace rates appeals made by hundreds of thousands of businesses, which the government annulled retrospectively.

Jerry Schurder, business rates policy lead at Gerald Eve, said businesses had been “short-changed” by the policy.

NICHOLAS EARL

Gerald Eve said the findings “added insult to injury” to struggling firms

Hobbycraft said it had seen increased sales thanks to Brits deciding to handmake gifts

UK staff could be spared worst of the tech layoffs

AZANIA PATEL

ANALYSTS believe the UK tech industry may be spared the worst of the global tech layoffs which have dominated headlines at the start of the year.

Salesforce, Amazon and Meta have all announced headcount reductions in recent weeks as some of the world’s largest tech firms face up to a world of higher interest rates and recession.

Alexia Pederson of tech-watchers O’Reilly told City A.M. that the low unemployment rate in the UK may feature in the thinking of firms looking to lay off workers.

“Some tech companies will want to take a cautious view and prepare for what may lie ahead by reducing costs, but the situation in the UK isn’t necessarily mirroring the global trend,” she said.

Meta is set to reduce headcount by 650 in the UK compared to a global cull of more than 11,000. The tech giants have had a rough be-

ginning to 2023, with alleged security breaches at Twitter, stock prices plummeting for Apple and Tesla and major EU fines for Meta.

The grim headlines mirror significant share price loses over the past year. Tesla is down some 68 per cent from where it was this time last year, Apple is down 24 per cent, whilst Amazon is down 46 per cent.

Over the weekend it was reported that Twitter has made further cuts to the team handling content moderation across at least the firm’s offices in Dublin and Singapore.

According to a Bloomberg report, workers on teams handling policy on misinformation, global appeals and state media were eliminated –sure to increase criticism of the platform’s approach to ‘fake news’.

Twitter laid off around 4,000 people in a brutal cost-cutting move in November, soon after the firm’s takeover by the controversial Tesla founder Elon Musk.

Crumbs! Warburtons off Waitrose shelves

WAITROSE pulled Warburtons’ products from its shelves last year as part of a delisting –and there is little immediate sign of the family bakery making it back onto the middle class favourite’s stock list.

Waitrose made the call last year after the Lancashire bakery’s products “didn’t meet our expectations” according to a report in the Telegraph, and is yet to return the company to its shelves.

Warburtons’ chairman James

UK public procurement reforms risk creating a £4bn ‘accountability gap’

LOUIS GOSS

PLANS to overhaul the UK’s public procurement processes risk creating an “accountability gap” around the use of public funds, anti-corruption campaigners have warned.

The UK’s procurement bill, which is set to be debated in the House of Commons today, is set to “rip up bureaucratic EU regulations” and lift

barriers that block small and medium enterprises from winning a larger share of the £300bn worth of public contracts the UK government buys each year.

But the UK Anti-Corruption Coalition (UKACC) has warned plans in the bill to lift the financial threshold for publication of transparency documents from £2m to £5m threaten to create a £4bn accountability gap in

use of UK public funds.

The campaign group warned that “key information” on more than £4bn worth of contracts would be withheld under the new procurement rules.

Peter Munro, senior coalition coordinator at the UKACC, said “while the bill has welcome provisions”, the amendment was “a step backwards for transparency and accountability over the use of public funds”.

Warburton meanwhile told the newspaper that “quality is paramount” and that “we put an awful lot of care into the 2m products we bake and deliver to over 19,000 stores across the country every single day”.

A Waitrose spokesman said the company remained “open” to the idea of working with the family firm once again in the future.

In a sign of the economic times, Waitrose lagged competitors over Christmas with sales slipping year on year, contrasted with more than 20

per cent upticks for discount favourites Lidl and Aldi.

John Lewis, which owns Waitrose, told markets that sales were down five per cent year on year in the first half of its financial year, despite an uptick in customer numbers –suggesting punters are becoming more costconscious in what they pick up off the shelves. ‘Basket sizes’ –effectively a measure of average spend –was down by a fifth from pandemic-era highs.

Operating profit at the grocer fell by £93m to £432m in the first half of the year.

An anti-corruption group said the reforms risked transparency over use of public funds

JAMES SILVER

COVID RISK NOT GONE YET

Inflation climbed to a peak of 11.1 per cent last year and while it has likely passed its peak, it is expected to stay elevated through this year.

But if inflation drops rapidly, the UK would exit any recession relatively quickly.

Anew Covid-19 variant that escapes vaccines is among the biggest risks threatening to sharpen the UK recession, City economists surveyed by City A.M. suspect.

Asked what wildcard trends could spring up to hit the economy this year, experts warned another deadly strain of the virus spreading is one of the biggest headwinds that would magnify Britain's downturn.

“In an extreme case some renewed lockdowns may be needed,” Sandra Horsfield, economist at fund manager Investec, said, although she highlighted vaccines could be tweaked quickly to minimise disruption.

Paul Dales, chief UK economist at consultancy Capital Economics, agreed, pinpointing China dismantling its tough zero-Covid policy as a possible trigger sparking another infection surge.

“There is a whole host of global risks.

They include another wave of Covid-19, perhaps coming from China,” he said, adding supply chain disruption may resurface soon due to the recent uptick in cases in the country.

Sticky inflation forcing the Bank of England to hike interest rates even further and leave them there for longer would deepen what is already expected to be an at least year-long UK recession.

Markets think governor Andrew Bailey and co will send borrowing costs to a peak of just under five per cent this year, but those bets will shift upwards if inflation hangs around at a higher level than expected.

Both the Bank and Office for Budget Responsibility think it is on track to halve at the end of 2023, still leaving it above the Bank's two per cent target.

Analysts said the price surge would be a permanent fixture of 2023 if energy costs stay high, workers do not return to the UK jobs market or a global trade war erupts if China ever decided to invade Taiwan.

“A tit-for-tat trade war could harm the UK economy, prolong supply chain disruptions and with that, inflationary pressure,” Horsfield said.

“Energy prices collaps[ing], reducing inflation and boosting consumer demand and growth” would engineer a “milder than feared” slump, Brian Hilliard, chief UK economist at Societe Generale, said.

In a more optimistic wildcard prediction for the year, the around 500,000 workers who have dropped out of the workforce could pave the way for a shock investment boom.

“The ultra-tight jobs market may yet spur some firms to look at investment in technology and equipment to mitigate against problems finding workers,” James Smith, developed market economist at ING, said.

A deal on the Northern Ireland protocol could also thaw post-Brexit trade talks between London and Brussels, Horsfield and Turner said.

Horsfield noted a deal would open a route for City of London firms to service European banks, brokers and insurers. The UK and EU have yet to recognise each others’ financial services regulatory regime since the Brexit transition period ended two years ago.

Which?: Airlines should be fined for poor service

ILARIA GRASSO MACOLA

WHICH? has called on the government to bolster the aviation watchdog’s powers as fresh data reveals that passengers are losing faith in airlines’ ability to provide good customer service.

Data published today by the consumer champion found that 39 per cent of adults who flew between January and October 2022 didn’t trust that airlines would treat them fairly if something went wrong when flying with them again in the future.

Passengers were particularly angry about the lack of information on the level of support they would be entitled to in the event of cancellations and delays.

Rocio Concha, policy and advocacy director at Which?, called on transport secretary Mark Harper to “urgently set out plans to equip” the Civil Aviation Authority (CAA) with enough enforcement powers to “hold airlines to account when they mistreat passengers and neglect their legal responsibilities”.

These include allowing the CAA to directly fine carriers that fail to uphold consumer standards.

“Without decisive action, some airlines will continue to be emboldened to fail

gers, as we’ve seen repeatedly in the last few years,” Concha added.

The director’s words were echoed by beach holiday retailer On the Beach, whose chief exec Simon Cooper said that “reform needs to happen now”.

Paul Smith, consumer director at the CAA, said the regulator has asked numerous times to have increased powers.

“This would allow us to take faster action when appropriate and bring our powers in line with other sectoral regulators,” Smith told City A.M.

A DfT spokesperson said the government was looking into improving passenger protections, “including greater powers for the CAA”.

Over the summer, the consumer champion reported several airlines, including British Airways and Easyjet, to the CAA over potential breaches of consumer law such as adopting misleading language over refund policies. The companies have always rebutted the accusations, saying that consumer group’s claims are “unfounded and unsupported”.

Hope on the horizon? New talks between unions and rail minister

JAMES SILVER

COMMUTERS sick to the back teeth of industrial action can hope for a resolution today as the rail minister meets unions for further talks.

Walkouts by the RMT and fellow union Aslef have crippled services in the run up to, and after, Christmas –effectively wiping out

the first week of the working year last week.

Militant RMT boss Mick Lynch is insistent that the government has been ‘torpedoing’ a deal between unions and railway companies, a claim government sources continue to dispute.

Lynch claimed last week in an interview with Sky News that the strikes retained public support,

despite a number of recent polls to the contrary.

A transport department spokesperson said: “Inflationmatching pay increases for all public sector workers would cost everyone more in the long term – worsening debt, fuelling inflation and costing every household an extra £1,000.” Lynch’s mandate fell in the latest poll of RMT members.

FTSE 350 firms up spending on ‘carbon offsets’ in race to net zero

LOUIS GOSS

THE UK’s top listed companies are increasingly using carbon offsets to achieve their net zero goals, new research shows.

The vast majority (96 per cent) of Britain’s FTSE 350 companies have already upped expenditure on carbon credits over the past 24 months, while almost half (47 per cent) intend to increase spending dramatically over the next two years, according to research

from carbon market startup Kana Earth.

The phrase carbon offset covers a variety of schemes in which firms are able to invest to compensate for their own emissions, including renewable energy developments or forest-growing initiatives, though it has faced criticism for shifting the focus away from firms cutting their own emissions.

From this year, UK-listed companies are required to publish detailed plans outlining how they intend to align their businesses with the UK’s climate goals.

Carbon offset schemes, which include forest-growing initiatives, are yet to be standardised

UK cost of living crisis set to swipe

£2,100 from Brits’ take home pay

JACK BARNETT

BRITAIN is just halfway through a cost of living crisis which, when combined with a tough recession, will leave households worse off than they were before Covid-19 in 2018, a new report out today reveals.

Take home pay is on course to drop £2,100 after a two year squeeze ends in 2024, representing a

combined seven per cent drop in spending power, according to the economic think tank the Resolution Foundation.

The report warned Brits to brace for the cost of living crunch that made families poorer last year to burn throughout 2023, eventually causing real incomes to fall at a faster pace than after the 2008 financial crisis.

A combination of higher prices, tax

hikes and elevated mortgage rates will erode household incomes in 2023, the Foundation said. Lalitha Try, researcher at the Foundation, warned that “Britain is only at the midpoint of a two-year income squeeze”. Aside from the very richest households,the report said every income group is set to suffer an at least two per cent drop in take home pay in each of the next two years.

Starling bucks trend as profits set to quadruple

CHARLIE CONCHIE

DIGITAL bank Starling expects to more than quadruple its profits and ramp up a hiring spree this year as it becomes the latest lender to be buoyed by rising interest rates and a borrowing surge.

In a New Year update last week, founder and chief Anne Boden revealed the firm had raked in pre-tax profits of over £20m in December as deposits swelled to £10.7bn. The update comes after Starling announced in July it had swung into the black to post its first full year profit of £30m.

Banks have been buoyed by sharp rate hikes across the world this year, with traditional lenders posting bumper profits across the board.

Starling’s profits have set it apart from many of its highgrowth fintech peers which have faced a reckoning as investors shift their focus away from growth amid an economic downturn in the past year.

Alongside the update, Boden fired barbs at venture capital investors and

tech peers.

She said the firm was looking to further distance itself from the downturn that has rocked tech firms and led to sharp falls in valuations.

In a blog post she wrote: “We’re profitable, very well capitalised and have no need to raise money. It’s no accident that we have never sought a silly valuation, even when the prospect of one was dangled before us.”

“We, and here I mean the fantastic executive team, just had difficulty buying into the fanciful views of the world held by some of the funds that had socalled ‘Vision’.”

The comments come after tech firms have suffered heavy valuation haircuts, including Softbank’s Vision fund which posted losses of over $23bn (£19bn) in the second quarter.

The London-headquartered lender added it has also supercharged a hiring spree and increased its headcount by a third to top 2,300.

Hargreaves founder slams board’s indulgence in ‘irrelevant’ projects

CHARLIE CONCHIE

THE CO-FOUNDER of trading platform

Hargreaves Lansdown yesterday launched a scathing attack on “unnecessary irrelevant” programmes launched by its outgoing chief, after a collapse in the FTSE 100 firm’s share price over the past three years.

Peter Hargreaves, who co-founded the firm in 1981 and remains its biggest shareholder, called on bosses to push through a swathe of cost-cutting

measures and rein in investment on an automated financial advice offering.

“The board indulged in completely unnecessary irrelevant programmes, which have distracted the firm from its prime objective. It’s hardly surprising the shares have collapsed,” he said in an interview with the Financial Times, citing plans for a ‘hybrid’ financial guidance service combining automated advice with financial advisers.

Shares which have slumped around 64 per cent since a May 2019 peak.

Peter Hargreaves berated the firm’s strategy, which has seen shares plummet 64 per cent

Boden fired barbs at less successful peers

Tesco and Sainsbury’s to reveal Christmas trading

THE UK’s two biggest grocers are expected to disclose bumper Christmas sales despite continued pressure from the cost of living crisis.

Investors will be keen to hear how shopper sentiment is faring when the bosses of Tesco and Sainsbury’s provide updates to the stock market this week.

Tesco will say how it performed over the quarter to the end of November in its latest update on Thursday.

Questions will also be asked about

how sales have performed over the last few weeks amid hopes there would be an uptick over the Christmas period as shoppers cast budget constraint concerns aside.

Analysts have already suggested that Tesco’s latest figures could make for positive reading.

James Grzinic, equity analyst at Jefferies, said: “An upbeat Christmas reporting season in the UK should be confirmed by Tesco, with solid third quarter sales followed by a post-Covid boosted festive period.”

Jefferies said it expects the update

increase of about 5.5 per cent for the six weeks to 8 January, covering Christmas and New Year.

It pointed to strong sales for the group’s Booker wholesale arm as it continues its post-pandemic recovery.

The update will come a day after rival Sainsbury’s announces its latest trading on Wednesday.

Early data from Kantar suggested that the two supermarket chains could perform similarly well, recording six per cent growth for Tesco over the 12 weeks to 25 December, and Sainsbury’s delivering 6.2 per cent growth.

Shore Capital’s Clive Black said the retailer has “traded robustly” recently and suggested that grocery retailers could have gained market share across the retail sector last month.

He added: “With a postal strike hitting elements of the online retail trade from mid-December, we will observe with interest how (Sainsbury’s-owned) Argos performed through the Christmas period as well.”

ZOPA’S 2023 BATTLE PLAN

ZOPA is a firm that has weathered economic crises before.

When the global financial crisis swept through the economy in 2008, the London-headquartered fintech was a little-known peer-to-peer (p2p) lending

shop connecting borrowers with willing investors.

Banks had unsurprisingly reined in loans and hauled up the barricades, leaving consumers scrambling for cash through other means. As a result, hordes turned to firms like Zopa,

LEGAL AND PUBLIC NOTICES

Transport for London Public Notice

THE ROAD TRAFFIC REGULATION ACT 1984 THE GLA ROADS AND SIDE ROADS 20 MPH SPEED LIMIT ORDERS GENERAL VARIATION ORDER 2022

1.Transport for London, hereby gives notice that on 30th December 2022 it made the above named Order under section 84 of the Road Traffic Regulation Act 1984. The Order comes into force on 10th January 2023.

2.The general nature and effect of the Order would correct an administrative error in various 20 mph speed limit Orders.

3. A copy of the Order and copies of any Order revoked, suspended or varied by the Order can be inspected during office hours, by appointment only, at the address below. To arrange an appointment please email trafficordersection@tfl,gov.uk .

Copies of the documents may also be requested via email at trafficordersection@tfl,gov.uk, or by post at the following address quoting reference

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Transport for London Streets Traffic Order Team (NP/REGULATION/STOT)

Palestra, 197 Blackfriars Road London, SE1 8NJ

4. Please note due to Hybrid working access to post is restricted and requests for documents may be delayed. Any person wishing to question the validity of the Order or of any of its provisions on the grounds that they are not within the relevant powers conferred by the Act or that any requirement of the Act has not been complied with, that person may, within six weeks from the date on which the Order is made, make application for the purpose to the High Court.

Dated this 9th day of January 2023

which emerged from the crisis with only a small dip in returns and a newly expanded customer base.

Since then, Zopa has gone through something of a transformation. The digital lender, which won a full banking licence in 2020, boasts a customer base north of 850,000 and last week announced it had sailed past £3bn worth of deposits with a loan book worth £2bn.

Looking out at 2023, Zopa is now braced for another crisis round the corner, its chief Jaidev Janardana told City A.M. in an exclusive interview.

BATTLE PLAN

The digital bank, which wound down its p2p operation in 2021, is expecting revenues for 2022 to have surged by around 130 per cent from the £70.5m it bagged in 2021, Janardana said.

He claims the performance is down to its goal to get dormant ‘zombie money’ in customers’ accounts working harder, with its ‘Smart Saver’ accounts raking in over £1bn deposits in 11 months with an offer of up to 3.26 per cent annual returns.

And Zopa is mulling new moves for 2023. Janardana says the lender is exploring a push into the small business lending space and is waiting for the right partner to come along before it throws itself into the market.

“I continue to think of that as a good opportunity, and if there were a company that would come through where we could partner with them or do something more strategic, that’s something that we would be open to doing in 2023,” he said.

A push into the business space would come amid growing competition in its consumer offering.

However, it will also face stiff competition from rival digital banks from Starling to JP Morgan’s Chase, which are rapidly hiking rates on savings accounts in a bid to tempt in returnshungry customers.

But Janardana says competition is

only a good thing for consumers as the cost of living squeeze continues.

“For those of us who have been more responsible coming into this into this uncertain period... I think it can be a moment of opportunity to grow and actually provide customers better alternatives than the incumbents are able to do,” he says.

Despite the bumper growth, it’s not been all smooth sailing for Zopa over the past 12 months.

The firm announced in April it had hit profitability for the first time, but Janardana reveals those have been largely choked off as it braces for a potential wave of defaults to come.

“We have been mostly running the business at about breakeven,” he says.

“We had to take an outlook on 2023 and beyond and provide for expected losses at the end of 2022. The UK economic outlook is pretty bleak. So we'll have to look into what that looks like.”

He expects to have clearer answers in the next six weeks as the bank closes its accounts for the year and the outlook for the year becomes clearer.

TO LIST OR NOT TO LIST?

The economic slump has also put the stoppers on some of Zopa’s much anticipated growth plans.

The bank’s IPO had long been slated for 2022, but it was forced to publicly row back on the plans as volatility shuttered the flotation market and triggered sharp falls for fintech valuations globally.

“I don’t feel that the current UK economic environment is one where businesses such as us... would want to go public at this juncture,” Janardana said.

The bank will wait for a period of “more certainty and clarity,” which “hopefully will come towards the end of this year,” he said.

Despite its London roots and UK customer base, the City still has not won

the unconditional commitment of the firm.

Policy makers and regulators have been desperately scrambling to boost London’s standing as a global hub for tech and fintech IPOs with a swathe of reforms and reviews, but the efforts are yet to yield results. The few such firms to float in the City have been beset by troubles and weathered sharp falls in valuations after IPO.

Janardana says the recent failures point to an investor base that is still not up to scratch in the UK.

“I think a lot of investors [in London} expect dividend payments, which is not consistent with our growth profile and the ambition we have,” he said. “While we expect to be profitable, we want to reinvest those profits into further growth in the business.”

For now, the location for the eventual IPO remains up in the air and back of mind as a recession looms. But Janardana and his team have plenty of work to do in the meantime.

Gerard O’Toole Network Regulation Manager, Transport for London Palestra, 197 Blackfriars Road, London, SE1 8NJ

Zopa Bank’s CEO speaks to Charlie Conchie about surviving recessions, battling digital banks and whether it will float in London this year

I think a lot of investors [in London] expect dividend payments, which is not consistent with our growth profile and ambition we have

Overdue –or a mistake? China re-opens borders despite Covid-19 numbers

JOYCE ZHOU

TRAVELLERS streamed into China by air, land and sea yesterday, many eager for long-awaited reunions, as Beijing opened borders that have been all but shut since the start of the Covid-19 pandemic.

After three years, mainland China opened sea and land crossings with Hong Kong and ended a requirement for incoming travellers to quarantine, dismantling a final pillar of a zeroCovid-19 policy that had shielded China’s 1.4bn people from the virus but also cut them off from the rest of the world.

China’s easing over the past month of one of the world’s tightest Covid-19 regimes followed historic protests against a policy that included frequent testing, curbs on movement and mass

lockdowns that heavily damaged the second-biggest economy.

Long queues formed at the Hong Kong international airport’s check-in counters for flights to mainland cities including Beijing, Tianjin and Xiamen. Hong Kong media outlets estimated that thousands were crossing.

“I’m so happy, so happy, so excited. I haven’t seen my parents for many years,” said Hong Kong resident Teresa Chow as she and dozens of other travellers prepared to cross into mainland China from Hong Kong’s Lok Ma Chau checkpoint.

“My parents are not in good health and I couldn’t go back to see them even when they had colon cancer, so I’m really happy to go back and see them now,” she said.

Investors hope the reopening will reinvigorate a $17-trillion economy suf-

fering its slowest growth in nearly half a century. But the abrupt policy reversal has triggered a massive wave of infections that is overwhelming some hospitals and causing business disruptions. But concerns remain that the great migration of city workers to their hometowns and reopening of borders may cause a surge in infections in smaller towns and rural areas that are less-equipped with intensive-care beds and ventilators.

The World Health Organisation said on Wednesday that China’s Covid-19 data underrepresents the number of hospitalisations and deaths from the disease.

Chinese officials and state media defended the handling of the outbreak, playing down the severity of the surge and denouncing foreign travel requirements on Chinese residents.

1.Notice is hereby given that, not less than two months after the date of the first publication of this notice and on behalf of The Master, Wardens and Commonalty of Freemen of the Art or Mystery of Clothworkers of the City of London (“The Clothworkers' Company”), Museum of London Archaeology intends to exhume remains of persons interred at the Churchyard as well as any tombstones, memorials or monuments.

2. A plan of the Churchyard, together with particulars of the deceased persons whose remains are proposed to be removed, is deposited at Museum of London Archaeology, Mortimer Wheeler House, 46 Eagle Wharf Road, London N1 7ED (Tel 020 7410 2200) and may be inspected free of charge between 9am and 5pm from Monday to Friday, excluding public holidays.

the City of London and the Registrar General.

b)A copy of the records of the tombstones, memorials or monuments will be available at Museum of London Archaeology, Mortimer Wheeler House, 46 Eagle Wharf Road, London N1 7ED (Tel 020 7410 2200) and may be inspected free of charge between 9am and 5pm from Monday to Friday, excluding public holidays.

c)Before the tombstones, memorials or monuments are returned to site, they will be stored at John F Hunt, Hill Farm, South Road, South Ockendon, Essex RM15 6RR.

5.Subject to paragraph 6 below, the human remains will be removed and reinterred at Willow Cemetery, 61 High Road, Benfleet, SS7 5LH and in any intervening period will be kept safely, privately and decently.

Russia yesterday claimed it had attacked a temporary barracks in the eastern Ukrainian city of Kramatorsk, but credible on the ground witnesses told Reuters that there was no sign of the attack. The Russian military claimed the attack was revenge for a New Year’s Day attack on a Russian barracks which killed more than 80 Russian soldiers.

Bon chance, Emmanuel: Macron set for row over bumping up low French retirement age

or 65 from 62 currently.

opposition and the public.

3.Subject to paragraph 6 below, Museum of London Archaeology proposes to arrange for all human remains to be removed and reinterred or cremated in accordance with the following conditions proposed by the Secretary of State:

a)the removal of the remains to be effected with due care and attention to decency;

b)the ground in which the remains are interred to be screened from the public gaze while the work of removal is in progress;

c)a suitable disinfectant solution to be freely sprinkled over the coffins and soil, if necessary;

d)the removal to be to the satisfaction of the environmental health officer for the district in which the remains are at present interred and in accordance with any additional conditions he or she may impose; and

e)the remains and any articles apparently buried with the deceased to be placed in fresh shells or such other containers as meet the requirements of the said officer.

6.Any personal representative or relative of any deceased person interred at the Churchyard, has the right to give notice in writing to The Clothworkers’ Company of Clothworkers’ Hall, Dunster Court, Mincing Lane, London, EC3R 7AH (marked for the attention of the Director of Finance, Property & Investments) by 9th day of March 2023 of their intention to make their own arrangements for the removal and reinterment (in any churchyard, burial ground or cemetery in which interments may legally take place) of such remains or the cremation of for the removal and cremation of such remains. Any person who elects to proceed with such arrangements will be required to provide a certificate to The Clothworkers’ Company pursuant to section 5(4) of the Allhallows Staining Church Act 2010.

FRENCH President Emmanuel Macron’s government will attempt to revive his economic reform drive and score a major political victory this week with a launch of the pension system’s overhaul in the face of vehement trade union opposition.

Prime Minister Elisabeth Borne is set to outline plans tomorrow to make the French work longer, most likely by raising the retirement age to 64

With one of the lowest retirement ages in the industrialised world, France spends more than most other countries on pensions at nearly 14 per cent of economic output, according to the Organisation for Economic Cooperation and Development.

Pension reform in France, where the right to retire on a full pension at 62 is deeply cherished, is always a sensitive issue and even more so now with social discontent mounting over the surging cost of living.

f)The particulars of the deceased will be stored at Museum of London Archaeology, Mortimer Wheeler House, 46 Eagle Wharf Road, London N1 7ED (Tel 020 7410 2200) and may be inspected free of charge between 9am and 5pm from Monday to Friday, excluding public holidays.

7.Any personal representative or relative of any deceased person to whom a tombstone memorial or monument at the Churchyard relates, has the right to give notice in writing to The Clothworkers’ Company of Clothworkers’ Hall, Dunster Court, Mincing Lane, London, EC3R 7AH (marked for the attention of the Director of Finance, Property & Investments) by 9th day of March 2023 to request the reerection of the tombstone, memorial or monument (at such other places as the parties may agree).

The government says reform is necessary to balance the books, but a success could also be a political game-changer for Macron after he lost control of parliament last year.

4.Subject to paragraph 6 below any tombstones, memorials or monuments will be returned to the site at the end of the development phase and resited within the land now comprising the churchyard.

8.The Clothworkers’ Company will meet any reasonable expenses incurred in connection with such removal and reinterment or cremation of the remains subject to section 5(6) of the Allhallows Staining Church Act 2010 and of removing and re-erecting any tombstone, memorial or monument.

The reform’s passage through parliament will not be easy. Macron lacks a working majority and will need to win over several dozen conservative lawmakers or use his constitutional powers to bypass the assembly, which would enrage the

“The aim is to balance the accounts without raising taxes or cutting pensions. Various options are on the table, but all include raising the retirement age,” government spokesman Olivier Veran said.

a)Prior to their removal, any tombstones, memorials or monuments will be accurately located and recorded and a copy of the records will be deposited with

Dated this 9th day of January 2023 For and on behalf of The Clothworkers’ Company Macron is taking on a sacred cow of French politics

ELIZABETH PINEAU

Notice under sections 5 and 6 of the Allhallows Staining Church Act 2010 of intention to remove human remains at Allhallows Staining Churchyard, located on the corner of Mark Lane and Dunster Court in the City of London, London EC3 (the “Churchyard”)

THE NOTEBOOK

Welcome

to the new

Our new feature will see the City’s movers and shakers get a few things off their chest. First up –our editor, Andy Silvester

–a chance to hear from the City

notebook

ONE of the things that fascinated me as a child were ant farms –the way these tiny, unassuming creatures could create extraordinary social systems in great intricate detail, encompassing all the roles from mayor to architect to the hardy labourer. What really amazed me though was how reliant the system was on each individual ant –without every single one pulling its weight, the whole ecosystem fell apart.

Fast forward a few decades and I find myself at the heart of another ecosystem –the City of London. And that’s what this new daily feature, the notebook, is about. What we all at City A.M. learnt during the pandemic was that the City’s fascinating dynamic needs each and every one of its bits to work –from the big banks to the sandwich shops, from the insurers to the pubs, from the CEO to the ‘elf and safety staff (yes, really).

In this space we’ll give the people who shape the City and today’s business world the

chance to riff on whatever it is that’s interested them that week –whether it’s reflecting on a mega-deal that just got over the line or a landlord wondering whether it’s worth staying open on a Friday lunchtime.

This week we’ll have one author who is shaping investor reaction to the biggest business news and another running one of Britain’s most interesting podcasts –on the jobs of the future.

We’ll also hear from politicians, both blue and red and even occasionally yellow, who are making and re-making the City of London.

When City A.M. was foundedbefore the global financial crisisit launched with the tagline ‘business with personality’. That tagline has changed over time but at its essence that’s what we want to give you, our readers, every day. Because it isn’t global forces or regulation or tech that shapes the City –it’s the people that live and work in it. Got ideas for your own notebook? Ping me an email at andy.silvester@cityam.com.

AIN’T THAT SOMETHING

£ It was no surprise to see Rishi Sunak and Keir Starmer both banging the drum for localism last week in their new year speeches, but one is entitled to wonder if their hearts are really in it. Politicians have always talked about devolving power –but they rarely give local mayors enough muscle to really get anything done. A truly radical government would give local leaders, including Sadiq Khan, more control over revenues –and more powers to spend them.

£ Three cheers for Lord Wolfson, the Next chief. He seems to have taken it upon himself to become the sole cheerleader for the value of high street retail, even as it seems the great British public are flocking back in numbers. This week he said the humble physical store is in better shape now than it has been for years. Of course, he also means that the weaker players have already disappeared –the modest, hardworking to one of his now vanquished high street rivals, Philip Green.

I QUOTE YOU ON THAT?

fair to say the Securities and Exchanges Commission aren’t too impressed with the new leadership of bruised and battered crypto fund FTX

Bernie Madoff, the aptly-named architect of what is surely the world’s largest ever Ponzi scheme, will live in infamy after his arrest in 2008. The new Netflix series –imaginatively titled Madoff –that covers his rise to the top of Wall Street provides some insight into the mind of the man, but more into the absolute cock-up the Securities and Exchange Commission made of pursuing him in the early days. The doc also focuses more than your average fraud drama on the victims of Madoff’s fraud –people who, eventually, lost everything. It’s compelling viewing –a real life Big Short in some ways –and well worth your time, even if some of the flashback mockumentary style acting is more garage trader than Wall Street grandee.

Hopes for breakthrough at Royal Mail with strike talks occurring today

FRESH TALKS will get underway today in a bid to end ongoing strikes at Royal Mail which have disrupted deliveries for months on end.

A spokesperson for the company –whose boss claims it is currently losing £1m a day –said it was “committed to reaching an agreement to resolve the current pay and change disputes to secure the company’s future and its employees’

Marine and Coastal Access Act 2009

Notice is hereby given that Frank Dowling, Trafalgar Tavern Lease LTD- London, 25 Park Row, London, SE10 9NL has applied to the Marine Management Organisation under the Marine and Coastal Access Act 2009, Part 4, for a marine licence to undertake the construction of a replacement 20 metre by 6 metre pontoon at the front of the Trafalgar Tavern.

Copies of the application and associated information may be viewed on line in the Public Register at wwwand associated information may be viewed on line in the Public Register at: www.gov.uk/check-marine-licenceregister.

However, we will accept representation via the following formats:

By email marine.consents@marinemanagement.org .uk; or alternatively

By letter addressed to Marine Management Organisation, Lancaster House, Hampshire Court, Newcastle upon Tyne, NE4 7YH

In all cases, correspondence must:

- Be received within 28 days of the date of the first notice 9th January 2023;

- Quote the case reference; and- include an address to which correspondence relating to the representation or objection may be sent.

The Marine Management Organisation will pass to the applicant a copy of any objection or representation we receive.

OPINION

long-term job security”.

Royal Mail’s business model has been under attack from technological change and consumer shifts, with letter volumes falling and parcel delivery now the focus of most of its competitors.

Royal Mail bosses say in order to compete with lower-cost operators they cannot afford to hand out inflation-busting pay rises.

The Communication Workers’ Union, which is leading the strike,

meanwhile says a current “best and final offer” on the table –which encompasses pay rises and a guarantee of no compulsory redundancies –is a “positive development” but that “the unacceptable actions of the company over the last few months [means] we do not take anything for granted and we know there are major differences between us on a raft of key issues”.

Royal Mail was privatised by the coalition government in 2013.

CAN

It’s

A cavalier attitude to the truth

There have been many downsides to the new office environment, but the uptick in the number of lively dogs running around the City is most definitely a positive. One survey from Flexa said the number of jobseekers expressing a preference for a “dog-friendly office” had risen 60 per cent. Whether that’s true or not, I’m a big fan of a ten-minute cuddle with Fido to relieve the stress of a Square Mile day.

MADOFF WITH THE MONEY –AND LEFT MANY VICTIMS

Application for Trafalgar Tavern Pontoon

The government is right to fight the unions –but there is no silver bullet

ELIOT WILSON ON BRITAIN’S NEW WINTER OF DISCONTENT

Postal strikes have disrupted hundreds of thousands of deliveries across the country

JAMES SILVER

CITY DASHBOARD

YOUR ONE-STOP SHOP FOR BROKER VIEWS AND MARKET REPORTS

LONDON REPORT BEST OF THE BROKERS

Week ahead: UK set to enter recession in all but name in GDP print

THE UK economy is set to enter a recession in all but name after official figures out later this week will likely reveal output slumped again in November.

Fresh gross domestic product (GDP) numbers, set to be released on Friday, will top London investors’ minds in a week that sees Wall Street banking giants kick off US earnings season.

Output is on course to swing back from a 0.5 per cent rise in October, which was artificially boosted by the lost working day in September to mark The Queen’s funeral, to a loss.

Soaring prices and business costs have continued to hit spending, weighing on the UK economy.

“We think that GDP is due a fall bearing in mind the weaker surveys and higher inflation, and as such forecast a

0.3 per cent month-on-month drop in November,” analysts at investment bank Nomura said.

Timelier indicators such as the purchasing managers’ index (PMI) show the services, construction and manufacturing sectors all contracted in December, signalling the country is in a recession right now.

On the corporate front, US banking titans will launch one of the closest watched earning seasons ever, with investors keen to see whether the Federal Reserve’s series of aggressive rate hikes to tame inflation are whacking profits.

JP Morgan, Bank of America, Wells Fargo and Citigroup update investors on Friday.

City traders will also be keeping tabs on how pound sterling performs after it kissed a November low against the US dollar last week. The currency rallied at the end of the week.

Shipping services firm Clarkson hiked its forecasts for the full year last week on the back of strong trading throughout its fourth quarter, with pre-tax profits expected to come in at more than £98m. Analysts at Peel Hunt said profits were expected to come in 17 per cent ahead of their £83.6m forecast, which was likely to drive a positive reaction from the stock. They rate it a ‘buy’ stock with a target price of 400p.

Analysts at Peel Hunt have doubled down on their ‘buy’ recommendation for bowling firm Ten Entertainment as it prepares to post its full year results next week. They expect “strong” numbers for the bowling operator despite the World Cup and poor weather in the final months of the year likely dragging on sales. Peel Hunt have set a target price of 400p for the stock.

JACK BARNETT, ECONOMICS EDITOR

CLOUDY FORECAST “The most trailed recession probably ever is likely to take a step closer to being confirmed this week. New GDP figures out on Friday could reveal the economy contracted as much as 0.5 per cent in November. Expect that trend to continue for at least the first half of this year.

EDITED BY ELENA SINISCALCO

Sunak is right in taking on the unions, but anti-strike laws are no silver bullet

Eliot Wilson

STRIKE action doesn’t have to be very extensive to send British society into fits of frightening folk memories of the 1970s. People murmur knowingly about a winter of discontent coming back to haunt us from the past. Real connoisseurs will recall the Army being brought in, ageing Green Goddess fire engines wheeled out to cover for striking firefighters. For all the nuance we now apply to our assessment of Jim Callaghan’s Labour government of 1976-79, it remains the ultimate example of industrial unrest, government paralysis and economic decline.

Yet as we begin 2023, all the talk is still of industrial action. The rail network has been plagued by strikes for weeks now, as the RMT and ASLEF—admittedly small players in the union world—have conducted a series of highly disruptive walk-outs. In response, the government is preparing new legislation which would allow employers in certain sectors to sue unions and sack workers if strikes breach minimum service requirements.

Trade unions have been part of the political landscape in Britain for a long time. They were illegal until 1824; then they became a pressing demand of reformers in the mid-19th century, as Welsh social reformer

Robert Owen attempted to create a national federation in 1834. The Trade Union Act 1871 created the first legal framework. Notably, it was trade unions that coalesced to create the modern Labour Party in 1900.

The picture, however, is changing. Union membership nationally is around six million in a workforce of 33 million. Before Margaret Thatcher came to power, there were twice as many union members. The most highly unionised industries like mining, shipbuilding and steel have largely gone, and legal restrictions have banned sec-

ondary picketing and made contributions to political funds an opt-in rather than automatic. In this context, the proposed legislation is a comforting hymn sheet for a Conservative Party which still idolises the memory of Thatcher. But is it the right response?

The principle of collective action remains an unbreachable agreement of our politics. The government was quick to reiterate, through a press release from the business department, that it “will always protect the ability to strike, but it must be balanced with the public’s right to life and liveli-

hoods”. But achieving a balance between those two rights is an elusive goal. Rishi Sunak and his business secretary, Grant Shapps, will hope they have caught a shifting public mood, and they might be right.

Recent polling shows that only 30 per cent of the public supported last month’s transport strikes, with 36 per cent opposed. Conversely, back in September, 43 per cent of those surveyed supported the strikers, and only 31 per cent were against them. Both of those sets of figures leave a significant proportion of “don’t knows”. Public sympa-

To be an attractive location the City needs an innovative offer, starting from transport

FOR many City workers, after a week of working from home due to rail strikes, today will be the first day back in the office.

People across the Square Mile will hope that the new year brings a swift resolution to the railways’ industrial action. We all want to return and help the City unlock its post-pandemic potential.

Continued rail disruption is deeply disappointing, harming many City businesses who rely on our worker footfall to survive. I’m thinking here particularly of our small and medium-sized enterprises and those working in the hospitality sector. The industrial action we witnessed during the vital Christmas trading period was devastating.

Yet, the new year brings renewed hope that all parties can get around the negotiating table and quickly find a way forward together.

Ending this disruption is key to the

Chris Hayward

bustling, our shops to be busy, our local economy to be back in great shape. That means finding ways to appeal to workers, residents, and tourists alike through art, entertainment, sport, and more.

Last year, we launched our Destination City initiative to reimagine the Square Mile and bolster footfall lost because of the pandemic.

more people to the Square Mile and make the streets a more alluring place to spend time and money, the City’s residents, businesses, and workers will all feel the benefits of recovery.

thy for particular professions like nursing, teaching and firefighting remains high. By contrast, nowadays big business gets little instinctive support.

The government is right to act, because the strikes are costing the country money when we can hardly afford it. The hospitality sector lost £1.5bn in December alone - half of that just in London - after a long period of pain through the Covid-19 lockdown.

While voluntary agreements on pay and conditions remain the ideal outcome, there is almost no goodwill left to facilitate them.

New legislation must do two things above all. Firstly, it must be effective in reducing the number of strikes and the hours lost, so that disruption is minimised. The public responds to nothing so well as efficacy: if they can see the problems melting away, they will give credit to the government. It must also be legally watertight.

Labour leader Keir Starmer has warned of challenges to new laws curbing strike powers, and protracted court cases or judicial review would simply reinforce a picture of a government struggling to cope.

Thatcher broke the overweening power of the unions in the mid-1980s with determination and endurance. Rishi Sunak does not have that luxury, with less than two years of the parliament left to run. What he needs is an effective solution that gets people back to work without conceding everything the unions demand and beggaring the public purse. Legislation may be necessary, but it seems very unlikely that it will be sufficient.

£ Eliot Wilson is co-founder of Pivot Point and a columnist at City A.M.

ORDER, ORDER!

City’s recovery.

Unlocking all that the Square Mile has to offer is extensively - but not solely - contingent on transport. A fully functioning public transport system is essential to get commuters back into the City, but alongside this we must give workers a compelling offer that goes beyond just showing up at their desk.

For quite a bit of time now, we have been taking a holistic look at what more we can do to make the City even more attractive.

We want the City’s streets to be

Our Golden Key launch event last October was a tremendous success as we welcomed over 30,000 visitors to the City.

To attract people from across the United Kingdom and beyond, we need to animate our unrivalled heritage and history, celebrate our worldrenowned arts and culture, and elevate our attractiveness as a global destination.

As 2023 unfolds, we will announce further plans to burnish our reputation as a place where people want to work, visit, and live. If we can attract

We are the engine of the national economy, home to a record high total of 587,000 jobs in 2021. The City’s financial and professional services firms contribute over thirteen per cent of the UK’s total tax revenue. It’s vital that we make London’s beating heart as competitive and attractive as possible.

Ultimately, a strong City is good for the country, and a strong country is good for the City – it is that simple. To navigate these difficult economic times, we need to give the City, the whole of London, and indeed the country our vote of confidence as the place to be.

£ Chris Hayward is the Policy Chair at the City of London Corporation

After a much needed Christmas break, we are all back to work, including our MPs. As Parliament resumes today, Speaker of the House Lindsay Hoyle might be hoping for some semblance of normalcy after what he has defined as over three “quite unbelievable” years in the job

The RMT has been staging a wave of highly disruptive walk-outs

LETTERS TO THE EDITOR

Students and AI can collaborate

[Re: Fears of cheating prompt Ofqual to ‘look into’ use of AI chatbot ChatGPT, January 3]

It’s right that exams regulator Ofqual investigates how ChatGPT will impact the future of school exams and students’ writing, critical analysis and creative skills, if Artificial Intelligence proves it can do the same to a high level. The emergence of tools such as ChatGPT means input from humans will be imperative to verify the quality and accuracy of information and reduce bias or misunderstanding. Both students and teachers will learn to add nuanced context in a way that a

machine can’t do, putting their skills to better use.

Take the invention of the calculator: while it can provide complex calculations far quicker than humans in some instances, it has cleared a path for humans to work with machines while also enabling more analytical problemsolving. We can’t undo technological progress, and in the future, humanAI collaboration will be the key to navigating everyday tasks from an early age. However, rather than replacing humans, working with AI will present opportunities to generate new concepts from multiple sources and accelerate content creation. Individuals will benefit if they’re equipped with the data literacy skills to take advantage of these new technologies.

Paul Barth

YEAR OF THE RABBIT Fashion brands try to tempt Chinese shoppers back

Sunak - or Starmer - need to focus on building to get the country back on its feet

Gareth Lewis

With Chinese New Year fast approaching - only thirteen days away - everyone is getting ready for the Year of the Rabbit, including retailers. Brands have been betting on themed items in the hope of luring Chinese clients back to their shops - with luxury brands like Gucci and Dior leading the way.

EXPLAINER-IN-BRIEF: TWITTER LEAK SHOWS DANGER OF PHISHING IS ROUND THE CORNER

Last year saw a rise in cyber security breaches and cyber crimes. Attempts at hacking, phishing and frauding targeted both companies and individuals. With reports emerging last week of more than 200m Twitter users’ email addresses stolen by hackers, the problem is not going away in 2023. Experts have defined the Twitter leak as one of the most extensive they have ever seen, and have warned it’s likely to lead to a wave of phishing attempts. Phishing takes place

when cybercriminals trick people into providing sensitive information like credit card numbers and login credentials. In 2022, 39 per cent of UK businesses identified a cyber attack. For those businesses, phishing was consistently the most common threat. The sophistication of phishing attempts is growing - so the government and regulators would be better off putting energy and resources into preventing and tracking data leaks this year.

WE ARE merely days into 2023 and attention is already turning to the next general election, which is likely to take place next year. Both Rishi Sunak and Keir Starmer set out their ambitions in their New Year speeches last week. As ever, the commentariat was divided on who delivered the most coherent and convincing plan of action for the future. Sunak and Starmer’s priorities and policy proposals are obviously very different, but one thing the two speeches had in common was a recognition of the importance that “building” - whether it’s homes, infrastructure or trust - will have in winning the electorate’s approval.

Sunak set out five “foundations” on which he hopes to build a better future, and Starmer laid out his blueprint for how Labour could build a “fairer, greener, more dynamic” Britain, on the foundation he laid in 2022, with the help of “builders and retrofitters” and “insulators and engineers” amongst others.

Whether intentional or not, both chose to locate their speeches in Stratford, an area that has been through huge redevelopment over the last decade, with Sunak speaking from the iconic Olympic Park and Starmer from UCL’s recently constructed Here East campus.

But putting rhetorical devices to one side, both leaders seem to have realised that if they want to deliver their ambitions, they need to get building - and fast. With Starmer pledging to work more closely with the private sector, the building industry will start looking like an invaluable partner to devise effective policy for both the government and the opposition this year.

Looking at the economy, both leaders want economic growth and job creation. The construction industry accounts for 6 per cent of GDP and is accountable for 2.4 million jobs nation-wide. It was one of the drivers of the UK’s recovery coming out of the pandemic. This trend continues, with ONS figures showing that construction remains one of the few major sectors of the economy that is still growing.

Builders will be essential to the UK reaching its net-zero ambition, as Starmer highlighted. The heating of

buildings contributes towards more than a fifth of total carbon emissions in the UK, so to reach our climate goals we must retrofit our current building stock to be more energy efficient with low carbon heating and build sustainable buildings for the future. The Environmental Audit Committee predicted last week that this will require at least one million energy-efficient installations a year by 2025 – a “war-effort” with builders as its soldiers.

Building will be central to improving public services too. If Sunak and Starmer want to increase bed capacity,

more hospitals will need to be built and the hospital maintenance backlog must be cleared. We have some of the best healthcare services in the world being delivered in crumbling Victorian hospitals. The construction sector will be critical to upgrading these hospitals to be fit for the future and building new state-of-art facilities. The same goes for the £2bn Sunak has committed to educational facilities, with 239 more schools and six form colleges benefiting from renovation projects through the government’s School Rebuilding Programme.

Whoever wins the next election will need a long-term and thoughtthrough strategy to build the homes and infrastructure that this country badly needs to thrive. If Sunak and Starmer both see themselves as builders with their respective bold ambitions to bolster the economy, they will need to think hard about how best to harness the know-how and resources that those who have been building in this country for decades have to offer.

£ Gareth Lewis is the CEO of Mace

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The construction industry accounts for 6 per cent of GDP and 2.4 million jobs

WE WANT TO HEAR YOUR VIEWS

Starmer underlined the importance of the building industry for the net-zero transition

TRAVEL

Ski touring is a hugely popular activity in Austria, but one not widely embraced by the British skier. Understandable really, as with access to white mountains generally limited to a mere weeks’ holiday per year, most Brits prefer to stick to straight downhill skiing. As such, it’s a sport not particularly well understood and with a reputation for being physically demanding. I wanted to find out if this reputation was deserved – by testing it out with my 12-year-old daughter.

Ski touring is basically walking up the mountain on skis, ideally in beautiful off piste or backcountry terrain. First off we needed to hire some specialist equipment. Most notably all mountain skis with bindings can switch from the traditional fixed setting, where both the toe and heel are held firm, to “walk mode,” where the heel is released to make walking uphill possible. Once that pleasant discovery was made, we discovered that we also needed flexible plastic “skins” that slipped over the bottom of our skis to enable them to grip the snow. There’s more kit to help you on your way too: adjustable ski poles to cater for the different gradients as well as the ominous-sounding but very necessary avalanche transceivers –thankfully handed over with a platinum guarantee that we wouldn’t need to use them.

The 12-year-old and I went touring in Lech, an up-market ski resort in the Vorarlberg region of western Austria. Lech is a breezy two-hour plane ride from London and famous for its handsome pistes and top draw facilites, from cute hideaway hotels to reliable lifts.

Our plan had been to do a hut-to-hut tour, walking with backpacks and staying in the basic but welcoming overnight refuge cabins strategically scattered across the Alps. It’s stating the obvious, but by staying in huts on a multi-day tour rather than descending each afternoon to a valley based hotel, you start the next day at altitude and thus don’t have to slog uphill to your start point. It also never gets old waking up amid the mountains, a leg stretch away from passing skiers.

The word “hut” doesn’t do justice to these formidable structures. Built to withstand harsh, high alpine conditions they vary in size - some are hardly huts and more like traditional hotels, and some can even accommodate well over a 100 people per night. In the evenings, don’t expect haute cuisine. Rather it is good, honest, hearty food shared amongst all those who have made the effort to get themselves to one of these very special places.

But luck was not on our side. A particularly warm and dry season meant the snow was sparse, and there wasn’t enough powder to enable hut-to-hut walking. With the buildings inaccessible on skis, we would be restricted to day walks. In hindsight, we dodged a bullet.

A week’s touring, laden with a backpack may have been too much for the 12 year old, certainly without a nice hotel to retreat to in the evening for some much needed R&R.

Instead, we treated ourselves to a stay at the wonderful Knappaboda Apartments.

The Knappaboda was a revelation - swish, spacious and relaxed interiors with a com-

SKI TOURING IN LECH, AUSTRIA

THE TRAVEL HACK

The first London to Berlin sleeper train launches this May, taking just one night to get from one capital city to the other.

It’s the most sustainable way to get to the German capital, famous for its party scene and historical attractions.

Leaving London in the afternoon, the train arrives in Berlin mid-morning the next day, and breakfast is served in your cabin.

Visit Europeansleeper.eu for more

munal honesty deli well stocked with fresh, pre-prepared ready meals waiting to be heated up in our apartment. Such an obviously good idea, it’s a wonder it’s not standard practice in more resorts.

The first morning out and our guide (fully qualified mountain guides are a must for backcountry ski touring) took us through the basics of ski touring. We were shown how to skin our skis correctly and adjust our bindings to “walk mode”. We were then asked to forget everything we had ever learnt in ski school in favour of a new movement - a slow, smooth, slightly louche slide that conserves energy when going uphill. Mastering the “kick turns” proved a lot trickier, but we persevered having been told that a poorly executed turn would have us sliding down our hard earned altitude.

We also got a lesson in mountain safety, cutting snow profiles to determine if

slopes were safe to ski or likely to avalanche and practiced using our avalanche transceivers with myself playing the “victim”, relying on the 12 year old’s expert use of her probe and shovel to rescue me. (Let’s call it a ‘bonding’ activity, because there’s nothing like the threat of an avalance to make a father and daughter team work together.)

And then we were off on our first tour. A few hours of gentle skinning up through fresh snow and forests. It was magical –blue skies above, the deep green from the pine trees set against virgin white snow and away from the main pistes, a comforting silence broken only by the shrieks of the 12 year old when we spotted deer in the woods. It really was a get-away-from-itall mountain experience, totally different from the usual freneticism of the ski slopes.

Back in Lech that evening, we considered

Ski touring hasn’t taken off yet for UK holidaymakers, but Simon Miller discovers the slow Alpine life is thrilling

Avalanche receivers were handed over... We were assured with a platinum guarantee we wouldn’t need to use them

THE LONG WEEKEND

BOOK THIS

Intrepid travel were early pioneers to the adventure travel movement when they set up in the 1980s.

They have launched a new set of immense 10-day trips for 2023, with an eye on comfort and luxury as well as truly getting out to untouched places.

We’ve got our eye on the Alaska trip with exclusive behind-the-scenes access to some of the best attractions.

Intrepidtravel.com

the options for the next day. Due to the snow conditions, the menu of possible tours was restricted. Our guide suggested a half-day trip that would culminate at the Alpele restaurant, home of the best fondue in the Vorarlberg region. Who were we to argue with an experienced mountain guide?

So how does ski touring compare to traditional skiing? Having consulted with the 12 year old, we both agreed that nothing could ever compete with the thrill of a classic downhill day. But we also agreed that we had thoroughly enjoyed our time ski touring for all of its freshness and slowness and the opportunities it presents to see the environment ina totally different way.

There is something therapeutic about moving slowly in the mountains, about having the time to truly absorb the scenery, about leaving the pistes behind

and really going deep into the solitude of the all-white panoramas.

Yes, ski touring was tiring, but it wasn’t as physically challenging as I had expected and whilst it certainly helps having skied before, one doesn’t need to be a particularly good skier to enjoy it.

That said, I have a sneaky suspicion that if we had toured as planned for a week carrying big backpacks, this review might read rather differently.

NEED TO KNOW

British Airways fly from London to Zurich from around £100 from London Heathrow. It’s an hour-and-a-half in a cab from Innsbruck to Lech. For more information on ski touring in Lech visit Lechzuers.com and the skischule-lech.com.

Simon stayed at the Knappa Boda Hotel and the Lindsauer Huette Visit their websites to book at Knappaboda.com and Lindauerhuette.com

THE WEEKEND:

I’m putting on skis from the first time ever and hitting the slopes in the brilliant sunshine. It’s hard to believe that only six hours earlier I was still in London. I’m in the French ski resort of Flaine, near Mont Blanc, and the sheer ease of accessibility is one of the reasons why this resort is popular among Brits. A one-hour and 45-minute drive from Geneva airport means you can depart London in the morning and hit the slopes by lunchtime.

Flaine is one of five resorts that make up the Grand Massif ski area which enjoys beautiful views of Mont Blanc and is the world’s first ski resort to receive the Green Globe certification for eco-friendliness. Conceived as a purpose-built resort, it is known for its brutalist, non-Alpine architecture. The listed, 1960s Bauhaus buildings, designed by Marcel Breuer, may be a challenge to some eyes, but their hardedged concrete and stone are offset by quirky features such as a timber and slate church, plus outdoor art installations.

I walk past a tall Picasso sculpture on my way to the nursery slopes, which are just five minutes by foot from my hotel (the resort is largely car-free).

SKIING FOR BEGINNERS:

For beginners and intermediaries Flaine is excellent. The nursery slopes have a free ‘magic carpet’ elevator, which I use several times while practising my snowplough stance. Then I have a go on a ‘snooc’, a kind of mono-ski toboggan. Invented five years ago, the snooc lets you cruise down the slopes by dragging your boots on the ground and steering with a

FLAINE FRENCH ALPS

Noo Saro-Wiwa skis for the first time in a destination for beginners

DO IT YOURSELF

The Rocky Pop Hotel has rooms from £68 per night and Snooc experiences start from around 10 Euros for a session of two hours.

Rockypop.com; Savoiemontblanc. com

Easyjet fly from London Gatwick to Geneva

central pole. At first my efforts end in tumbles, but by my third go I’m slaloming like a pro and stifling squeals. The snow cover is very good here. I take a ski lift to the Flaine Forêt level, where Chamois goats roam the hillsides and intermediary skiers enjoy scenic blue and red slopes. There’s also good off-piste action for the most advanced skiers, who can follow trails to surrounding villages.

OTHER THINGS TO DO:

Besides skiing and snowboarding, Flaine offers snow activities including quad biking and ice driving school. While a paraglider hovers above, I try my hand at snowshoe hiking on the upper sections, which are turned into golf courses during the summer months. From the top, the slopes converge in a bowl shape towards the resort centre, where restaurants such as Le Michet serve tasty tartiflette. The après-ski scene is on the quieter side. However, my hotel, the new Rocky Pop, carries strong party vibes. Its décor is quirky and playful (dinosaur heads on the walls and retro video game motifs on the carpets). There’s free karaoke and a buzzing atmosphere in public spaces. Down in the basement spa my aching muscles get a joyous rubdown. Afterwards I rest in the sauna before taking a dip in the swimming pool. Rocky Pop has a Japanese sushi restaurant and a global buffet, but it’s their raclette – a delectable Alpine dish involving melting Haute Savoie cheeses onto potatoes and vegetables – that truly hits the spot. Reaching the airport is as quick as my arrival, and before I know it I’m touching down in England, wondering if the last few days were just a sweet dream.

Rugby referees must get the big calls right

LET’S be clear, no game of rugby is ever decided by a singular refereeing decision; there are ample opportunities within a match to convert chances and clinch a victory.

But sometimes a game is overshadowed by a refereeing decision, one which could have ramifications for a number of individuals and groups –and that’s simply unacceptable.

On Friday night Owen Farrell executed a sublime drop goal to hand his Saracens outfit a 19-16 victory over Gloucester Rugby in the Premiership.

It was a great game of rugby, a battle of grit and determination, but the No10 shouldn’t have been on the field.

Because in the 76th minute he made what appeared to be direct contact with the head of Gloucester second row Jack Clement.

It was raised by the TMO Claire Hod-

FOOTBALL

nett to the referee Karl Dickson but, in an apparent miscommunication, it was not reviewed officially and therefore discarded.

The laws of the game dictate that foul play can be reviewed until the game restarts. On that basis, between the incident, the next natural stoppage and the subsequent restart, an incident can be checked.

Dickson asked whether it had happened within that “phase” – one assumes he meant that period of play rather than the particular phase – and that’s the key to the miscommunication. Nigel Owens, the former referee who officiated over 100 Tests, later confirmed that there was no limit of time

on a referee going back to review an incident, so long as the game hadn’t restarted. It hadn’t, and the mistake had been made.

Thereafter, Dickson liked a tweet appearing to suggest the TMO was at fault. He has since unliked the post.

“To be fair I think when Karl Dickson asked ‘is it in the same phase of play’ he was inferring whether the game had restarted which if it had they couldn’t go back,” the tweet read. “The TMO said she didn’t know which is where the error lies.”

But these errors simply cannot happen. People make mistakes but there are results and the safety of players on the line. If rugby doesn’t stamp out the high tackle by punishing it in real time, where’s the deterrent?

Earlier in the match a try was correctly disallowed for a minor infringement. It took time but the right call was made – that must be the standard for all decisions.

The following day, on Saturday, Tom Foley

took his time, communicated with his fellow officials and ensured his match between Newcastle and Leicester didn’t restart until he had checked a potential dangerous tackle. He dished out a yellow card for Tommy Reffell’s facial contact on Newcastle’s Tom Penny; a considered call.

So the referee got it wrong on Friday night and social media jumped on it.

In a world of trial by Twitter, I’d rather referees take an extra few minutes to communicate – albeit irritating the paying crowd in the process – and get the big calls right than dismiss them without thorough consultation.

Eyes now turn to the Rugby Football Union’s disciplinary committee. Will Farrell be cited and banned? If so, will he somehow be able to return in time for the Six Nations, given he’s had seven weeks of bans for high contact. We will wait and see.

BEFORE Bukayo Saka and Emile Smith Rowe there was Marcus McGuane. Like Saka, McGuane joined Arsenal’s Hale End academy shortly after starting primary school and, as he developed into a classy central midfielder, became tipped for the very top. He captained an under-18 side featuring current Arsenal firstteam players Eddie Nketiah and Reiss Nelson and impressed Arsene Wenger sufficiently to be handed minutes in the Europa League.

Andries Jonker, the Dutchman then in charge of Arsenal’s academy, predicted McGuane would go on to play for England. He was not alone in admiring the Greenwich-born prospect; word reached Barcelona of his prodigious talents and the Spanish giants swooped to sign McGuane in January 2018, just four months after his Arsenal debut and shortly before he turned 19. In an indication of how highly they rated him, Barca set the buyout clause in his contract to €25m.

McGuane enjoyed a whirlwind start to life in Catalonia. Six weeks after signing, he made his first-team debut, becoming the first Englishman to represent Barcelona since Gary Lineker in the 1980s. Suddenly, the south Londoner was training with some of football’s biggest stars, taking part in rondos with Barcelona’s legendary MSN forward line: Lionel Messi, Luis Suarez and Neymar. “There have been some oncein-a-lifetime opportunities,” McGuane has said.

But his adventure soon turned sour. A change of manager at Barcelona’s reserve team, where McGuane was mainly playing, saw him sidelined and then shipped out on loan to Dutch second division outfit Telstar.

Bigger clubs had wanted him, but he chose Telstar in order to reunite with former mentor Jonker, who was manager there. “I told him this level is too low, he’s too good for this. But he decided he wanted to come back to me and enjoy football again,” Jonker said. It proved to be the first step in kickstarting a career that, three years on,

THE ONE THAT GOT AWAY

has brought him back to English football at Oxford United who, in a twist of fate, host Arsenal in the FA Cup third round on Monday night. From seeming destined to lead the Gunners back to the top, McGuane, now 23, will instead be plotting their downfall and the latest upset in this year’s competition in his first meeting with his former team.

MASSIVE GAME

Arsenal and McGuane have both had a turbulent time since he swapped north London for northern Spain. While Arsenal have reversed years of decline to emerge as Premier League title challengers under Mikel Arteta, McGuane has found regular firstteam football in League One via mixed spells at Telstar and then Not-

tingham Forest. No player has made more appearances this season for Karl Robinson’s men than the midfielder.

In another quirk of fortune, Arteta’s Arsenal are built around young talents, a few of whom, like McGuane, graduated from Hale End. Nketiah is likely to lead the visitors’ attack in the FA Cup tie, while Smith Rowe is expected to make his return from injury. Nelson would probably have played too, were he not currently injured. Had things worked out a little differently, McGuane might have been putting on a red shirt instead of a yellow one.

No one would have blamed McGuane for enjoying the spotlight returning to him ahead of the FA Cup showdown, but he has preferred to keep a low profile. “He doesn’t buy

into the industry, he just loves playing football,” said Robinson. Teammate Lewis Bate added: “He doesn’t want to make too much of a fuss about it, but I know it’ll be a massive game for him. At the same time, he won’t treat it any differently to any other, and he’ll play how he usually he does.”

Premier League pacesetters Arsenal have won 19 of 24 games this season, so Oxford, who sit 15th in the third tier, are firm underdogs. But the Gunners have lost twice, to PSV Eindhoven and Brighton, when Arteta has chosen to rest his first XI this term and have never won at Oxford, albeit that their last visit was in 1988. If McGuane can extend their record and upset his old colleagues he will surely find himself in the headlines again.

Marcus McGuane is set for a reunion with Arsenal –via Barcelona, writes Frank Dalleres

Karl Dickson’s error is an example of how communication is vital to rugby becoming safer for players, argues Matt Hardy

Farrell could miss some of the Six Nations if cited

McGuane in his Arsenal days (above) and now with Oxford United (main image)

Potter’s Chelsea booed by fans in Man City cup capitulation

DALLERES

UNDER-FIRE Chelsea manager Graham Potter played down boos from the travelling Blues fanbase after his side suffered a chastening 4-0 FA Cup defeat at Manchester City yesterday.

Chelsea supporters chanted the name of Potter’s predecessor Thomas Tuchel during the drubbing and booed their team off at half time and full time.

“We can’t do anything but do our jobs better and work harder,” said the former Brighton boss. “We understand the supporters’ frustration but our job is to do our job. There are always other opinions, criticism and negativity, but that’s part of the challenge.”

Chelsea mustered just one shot on target as they slipped to a sixth defeat in their last nine matches – form which Potter conceded was unsustainable. “The results in a small space of time aren’t positive,” he said.

“You can make excuses and look for reasons, or you can say that it isn’t good enough and both of those answers are correct. Clearly we’re suffering and it’s not nice, but it’s where we are at the moment.”

City raced into a three-goal lead before the break through Riyad Mahrez’s free kick, a Julian Alvarez penalty and

a fine team goal finished by Phil Foden. Mahrez completed the scoring with another spot-kick five minutes from time to set up a potential fourth round tie against Premier League title rivals Arsenal, who face Oxford United tonight.

Chelsea lacked cohesion without several first-team players available but still looked worryingly passive against opponents who also rested key figures including Erling Haaland, Kevin De Bruyne and

Ilkay Gundogan.

Potter insisted last week that he retained the support of co-owner chairman Todd Boehly, who lured him from Brighton soon after leading a takeover of the club last summer.

City manager Pep Guardiola, meanwhile, called for Chelsea to break from the hire-and-fire culture of the Roman Abramovich era and be patient with the English coach, despite his current struggles.

“I would say to Todd Boehly: give him time. I know at big clubs results are important but give him time,” said Guardiola.

“What he did at Brighton was outstanding. At Barcelona, I didn’t need two seasons because I had Messi.”

LEAGUE Two Stevenage produced the upset of the FA Cup third round as their two late goals handed them a 2-1 victory over Aston Villa yesterday. Villa enjoyed the larger share of territory and possession and looked to be in control when Morgan Sanson put the home side ahead in the 33rd minute. Some impressive one-touch football in the build-up handed Sanson the ball outside the box, and although his first touch was poor the Frenchman found the back of the net to resgister his first goal for the Midlands club. Despite

Adelaide win is shot in arm for Djokovic ahead of Australian Open - but Osaka out

MATT HARDY

NOVAK Djokovic survived a match point scare to beat Sebastian Korda and win the Adelaide International ahead of next week’s Australian Open.

The Serbian former world No1 beat the American 6-7 (8-10) 7-6 (7-3) 6-4 in South Australia to extend his winning run to 34 matches in Australia and secure his first title in the country since he was deported last year over his Covid-19 vaccination status.

“It’s been an amazing week, for me to be here is a gift,” Djokovic said. “The support that I’ve been getting in the past 10 days is something that I don’t

OXFORD, VIA BARCELONA

The former Arsenal prodigy set to face his old side in FA Cup

Boreham Wood in line for top flight FA Cup tie

NATIONAL League Boreham Wood could earn themselves a Premier League opponent in the FA Cup after the fourth round draw was completed yesterday.

The club – who are 13th in the National League – could host Leeds if they overcome Accrington Stanley in their reply and Leeds win their rematch against Cardiff.

Holders Liverpool – who limped to a 2-2 draw against Wolves on Saturday – will head to an in-form Brighton and Hove Albion should Jurgen Klopp’s men win their replay with the Wolverhampton side.

There were a number of London clubs who discovered their fourth round opponents yesterday, too.

Tottenham – fresh from a nervy 1-0 victory over Portsmouth on Saturday – head up the M40 to Preston North End while West Ham United will play Derby County.

Fulham earned a home tie and will host Sunderland at Craven Cottage.

The FA Cup fourth round will take place between 27 and 30 January.

think I’ve experienced too many times in my life, so thank you so much to everyone for coming out.”

If Djokovic were to go on a run in Melbourne and win the opening Grand Slam of the calendar year, he’d equal Rafael Nadal’s total of 22 major titles. The win in Adelaide is the world No5’s 92nd singles title on the ATP Tour which puts him level with Nadal – only Roger Federer, Ivan Lendl and Jimmy Connors top that number.

Elsewhere, four-time Grand Slam winner Naomi Osaka has withdrawn from the Australian Open.

The 25-year-old Japanese star did not give a reason for her withdrawal.

being just one goal ahead, Villa looked to be comfortable but that changed in the 88th minute when Jamie Reid equalised for Stevenage from the penalty spot after Leander Dendoncker was red carded for pulling and fouling Dean Campbell.

Campbell then drilled the winner in the 90th minute to hand Stevenage the result of round three.

Villa’s loss is their eighth in a row in the FA Cup, with the club last getting beyond the third round in the 20152016 season.

Stevenage will now head to Stoke City in the fourth round of the cup.

Crackdown on agents’ fees could spark deal stampede

TOUGHER rules for football agents come into force from Monday as part of a Fifa crackdown that will see agents’ fees capped at three per cent of a player’s salary.

Some of the world governing body’s new regulations take effect immediately, such as a mandatory licensing system for all agents, while others, such as the fee cap, apply from October – and that could spark a stampede to complete deals before it takes effect.

“Given that most agents charge more than three per cent, you could end up with a rather unseemly rush for agents

to complete deals before the new regulations are implemented domestically,” said Stephen Taylor Heath, head of sports law at JMW Solicitors.

Fifa approved the rules in December, heralding them as part of “a fairer and more transparent football transfer system”. It followed years of wrangling with agents, who opposed tighter regulation, and there could yet be legal challenges, for instance to the arbitrary $200,000-a-year salary threshold at which point the cap applies.

“These are laudable objectives but whether the regulations meet those objectives is the issue [agents] may seek to challenge,” added Taylor Heath.

FOOTBALL

TENNIS

FRANK DALLERES

Djokovic won his 92nd ATP Tour title

FRANK

MATT HARDY

MATT HARDY

Potter heard Chelsea fans sing the name of predecessor Tuchel