Wednesday 19 April 2023

LONDON’S BUSINESS NEWSPAPER

BENNETT ON BUSINESS THE CBI CAN SURVIVE –IF IT CAN SHOW ITS VALUE P8

PACKAGED UP LIBBY BRODIE ON WHY BOXED WINE IS NOTHING TO BE SCARED OF P14

ROBOTS JOIN THE RAT RACE

CORPORATE LEADERS THINK AI LIKELY TO BE BETTER AT MANY JOBS THAN THEIR CURRENT STAFF –BUT MASS UNEMPLOYMENT UNLIKELY

BANK ROW

HSBC hit by further Ping

An complaint

CHRIS DORRELL

THE ONGOING row between HSBC and its largest shareholder Ping An stepped up a notch yesterday after the Chinese insurer said the bank was exaggerating the costs of spinning off its Asian division.

Ping An has long pushed for a restructuring of the lender, calls which have been repeatedly rebuffed by HSBC’s leadership who argue it would impose significant costs.

In a rare statement, Ping An said they had been “extremely disappointed by HSBC management’s consistent closed-minded attitude to all solutions” and said the firm was refusing to “countenance any benefits” of a break-up.

Anger among Asian shareholders increased when HSBC was barred from issuing dividends during the Covid-19 pandemic as a result of its London listing.

NEARLY half of business leaders reckon AI could replace humans, new data out today shows, but experts think job losses caused by mass adoption of tools such as ChatGPT would be limited.

Some 44 per cent of C-suite executives think AI could perform tasks to a similar or better quality than humans, according to a poll of more than 1,000 business decisionmakers by YouGov.

The numbers illustrate smart technology’s capacity to trigger a huge shake up in the global workforce, helping

workers palm off remedial tasks to computers to free up time to spend on tackling more complex problems.

Mundane legal chores have often been identified as an area which could be fobbed off to AI.

“The [legal] profession needs to develop new skills, for instance to make best use of legal technology, but solicitors will continue to need soft skills that AI will not be capable of automating,” Lubna Shuja, president of the Law Society, told City A.M.

Economists have argued stepping up usage of advanced technology could help

reverse a more than decade long trend of slowing productivity growth.

Britain, the US and much of Europe have suffered from poor GDP growth since the 2008 financial crisis, mainly due to output improvements stalling.

“We could see an overall productivity boost from [AI] technology of around 1.5 per cent based on our latest estimates,”

Yael Selfin, chief economist at KPMG UK, told City A.M.

Eleanor Lightbody, chief executive of Luminance, a company that makes legal AI tools, said one firm that uses its technology saved 40 per cent of the time

they would have spent on administrative tasks redeploying paralegals elsewhere.

While some are concerned about a raft of layoffs, others are more sanguine.

Jimmy McLoughlin, a former No 10 business advisor and now host of the podcast Jimmy’s Jobs of the Future, said that “while inevitably some jobs will go, hundreds of thousands if not millions of new roles will be created.

“It’s not all doom and gloom for the human worker –particularly if you work in an SME or a small start-up, where the value of a real person is less likely to be replaced by a machine,” he continued.

Most of the bank’s profits come from the eastern continent.

An HSBC spokesperson said: “It is our judgment, supported by [third-party advice], that alternative structural options will not deliver increased value for shareholders.”

Ping An will support a motion at the bank’s forthcoming AGM on 5 May, which would require it to give regular updates on the possibility of restructuring, including the mooted spin-off.

Credit Suisse in High Court in case linked to crisis-era mortgage-backed securities

BEN LUCAS

CREDIT Suisse is set to appear at the High Court in London tomorrow to defend itself against a $160m (£129m) claim over allegations the Swiss bank made “fraudulent misrepresentations” related to the sale of residential mortgage-

backed securities. The claim, brought by Loreley Financing, a subsidiary of German bank IKB, argues it was misled by Credit Suisse when it made a $100m investment back in 2007, which eventually collapsed in value.

The trial is set to last eight weeks, and is expected to hear evidence

from several former Credit Suisse staff involved at the time.

The sale of residential mortgagebacked securities by Credit Suisse and other banks is regarded as one of the main causes of the 2008 global financial crisis, resulting in billions in losses for investors and a global economic slump.

Credit Suisse was forced to pay $5.28bn to the US Department of Justice (DoJ) in 2017 to settle its investigation into the bank.

“Credit Suisse claimed its mortgage-backed securities were sound, but in the settlement announced today the bank concedes that it knew it was peddling

investments containing loans that were likely to fail,” the DoJ said then.

Loreley said in a statement that the bank “now seeks to distance itself from the DoJ's comments”.

Credit Suisse has paid out hundreds of millions of dollars to settle similar claims since then. It declined to comment on the case.

JACK BARNETT AND ABBY WALLACE

STANDING UP FOR THE CITY

Will AI change the City? Sure, but it might not be for the worst

IN THE finest spirit of innovation, in putting together our front page today on the rise of AI in the City, we asked ChatGPT to concoct some headlines for us. They weren’t bad. “AI revolution hits London: Robotic workforce threatens to replace human jobs” was one.

“The rise of the machines: Artificial intelligence set to disrupt London’s workforce” was another. But we’d still take our night editor Anna Moloney’s

THE CITY VIEW

“robots join the rat race” over either of those, and we trust our chief designer Billy Breton’s graphics raised a smile. Really, in our small exercise, we’ve demonstrated both the potential of artificial intelligence in the workplace – and the

advantage that humans still have, and in that nugget we find cause for optimism. There is no point being a Luddite about this; artificial intelligence is well on its way, and the firms that work out how best to harness it early on will have an almighty competitive advantage. Datadriven intelligence is already around us – ask the traders who lost their jobs to algorithms. The bright side is that the rise of artificial intelligence can at least

for now highlight the human qualities of intuition, flair, and creativity, too. Innovation has been the driving force behind the City of London for centuries. We have created new technologies and new products that have displaced some jobs and created many more. In a way, artificial intelligence feels a little like working from home five days a week: you might be able to do the job, but you’ll lack a little

FIT FOR A KING Preparations on The Mall are well underway, with London donning its best gladrags as King Charles III’s coronation rapidly approaches on 6 May

‘Worst volatility behind us’ after March’s mini-crisis, says Goldman Sachs chief

CHRIS DORRELL

GOLDMAN chair and chief executive David Solomon yesterday said the worst of March’s banking difficulties had passed, but stressed there were still dangers ahead.

On an investor call following first quarter results, Solomon said “it appears the worst volatility is behind us thanks to regulators’ prompt action”.

Solomon said the quarter was “certainly volatile”, highlighting the market movements in interest rates as “staggering”. Whenever you have volatility of that size it flows down to

the capital market,” Solomon said, referring to the tremors felt after SVB’s collapse. This meant Goldman’s investment banking division recorded a “pretty muted” quarter.

While Solomon was hopeful, he warned that the effect of March’s mini-crisis would “lower growth expectations and higher risk of credit contraction”.

On the whole Solomon said Goldman “continue to be cautious on the economic environment”.

Solomon also provided updates on the bank’s ‘platform solutions’ division, which includes its payments and

consumer banking businesses.

The division has seen heavy criticism as a result of the costs incurred over the past few years. Since its initial launch in 2016, Solomon has tried to narrow Goldman’s ambition in the consumer space to payments.

It recorded a $470m (£378m) hit from the partial sale of the Marcus loans portfolio as well as the transfer of the remainder of the portfolio to held for sale.

The call came after Goldman’s first quarter results. Its profit fell 18 per cent year on year as investment banking activity remained subdued.

something that can make the difference between a satisfactory result and an excellent one, or the insight that comes from a quiet chat in the kitchen with somebody in another team. Just like hybrid working, the odds are that we’ll eventually find the balance between this new, slightly terrifying tech and the value of human interaction and ingenuity. And no, we didn’t ask ChatGPT to write this column.

WHAT THE OTHER PAPERS SAY THIS MORNING

THE GUARDIAN

THE UK SHOULD NOT ‘PULL THE SHUTTERS’ ON CHINA

Britain should take a nuanced approach on China or risk harming our national interest, foreign secretary James Cleverly has said. It comes as the government attempts to navigate China’s growing political reach.

THE TIMES

30,000 XR PROTESTORS COULD CAUSE LONDON MARATHON DISRUPTION

There are fears that Extinction Rebellion protestors could cause disruption on Marathon weekend. Race organisers have advised spectators to avoid Parliament Square demonstration

THE FINANCIAL TIMES

JOHNSON&JOHNSON TAKES

BLOW FROM LEGAL FIGHT

Johnson & Johnson have reported a loss after paying a $6.9bn litigation charge. The healthcare giant is fighting to resolve tens of thousands of lawsuits that accuse its baby powder and other talc-based products of causing cancer.

Meanwhile, Bank of America lifted by higher interest rates

CHRIS DORRELL

BANK of America’s first quarter results came in significantly stronger than market expectations yesterday.

Revenue climbed to $26.3bn

(£21.1bn) from $23.2bn last year, helping its net income to climb to $8.2bn with a diluted EPS of $0.94, higher than market expectations.

Both of Bank of America’s largest divisions, consumer banking and global banking, saw the benefits of higher interest rates. Profit in consumer banking climbed four per cent while global banking saw a 48

per cent increase despite falling investment banking fees.

Finance chief Alastair Borthwick said the results reflected “strong net interest income improvement coupled with one of our best quarters of sales and trading”.

However, average deposits at Bank of America slipped to $1.89bn from $1.93bn at the end of last year.

Deposits are in focus across US lenders as 2023 has seen a flood of funds coming into higher-yielding money market funds, a trend only accelerated by the collapse of Silicon Valley Bank last month.

Coinbase chief says firm could move to London

CHARLIE CONCHIE

THE CHIEF executive of cryptocurrency exchange platform Coinbase yesterday said that switching its headquarters to the UK was “on the table” if the regulatory regime does not improve in the US.

Asked if a London move was possible, chief executive Brian Armstrong said “anything is on the table”.

“We were founded in the US, [and] I think the US has the potential to be an important market in crypto, but right now we are not seeing the regulatory clarity that we need,” Armstrong said.

“I think if a number of years go by where we don’t see regulatory clarity emerge in the US, we may have to consider investing more in other re-

POWER HUB Survey reveals London’s economy beats rest of UK’s

gions. Anything’s on the table, including relocating,” he added.

Coinbase is listed on the Nasdaq in New York with its HQ in San Francisco, but it’s second largest market is the UK. The suggestion of a move marks a major warning shot to US regulators after a bruising period and series of high profile run-ins with US regulators.

The US Securities and Exchange Commission last month threatened to sue Coinbase over some of the crypto exchange’s products. In a separate BBC Radio 4 interview, Armstrong said if he could relist his company, he would consider the London Stock Exchange. Armstrong’s remarks come in sharp contrast to an ongoing trend of UK firms snubbing London listings in favour of a New York float.

LONDON’s economy is firing on all cylinders and has raced ahead of every other region in the UK as spending in the capital climbs to the highest level in a year, a new survey shows. According to Natwest and S&P Global’s regional purchasing managers’ index, businesses in London are performing better than any other UK area.

US fund management group moves towards UK

CHARLIE CONCHIE

A MAJOR US fund management body has announced a push into the UK today as its members come “under attack” in the US and look to capitalise on a more friendly regulatory environment.

The Washington-headquartered

Managed Funds Association (MFA), which represents 170 firms managing some £1.8 trillion in assets, said overtures from regulators in the UK had led the firm to expand its presence in London and open up a first UK office, based in Mayfair.

MFA chief Bryan Corbett, a former senior adviser to George W Bush, said

an impending regulatory overhaul in the UK had been seen as an opportunity by the body’s members. The FCA launched a consultation in February to overhaul the rules governing the asset management sector and the Treasury has just closed a consultation on tweaks to short-selling regulation.

Brian Armstrong heads up the crypto platform

Wise shares drop after overseas transfers stalled by market volatility

CHARLIE CONCHIE

MONEY transfer fintech Wise reported a slump in the amount of cash sent on its platform for a second consecutive quarter yesterday as a cost of living squeeze and currency fluctuations unsettled customers.

The London-listed fintech missed analyst estimates as the volume of money transferred per customer fell four per cent on the previous quarter, led by a sharp eight per cent fall in volume among its personal customers.

“We believe payments amongst these cohorts, such as for property purchases and investments, to be more discretionary in nature and more influenced by macroeconomic conditions,” Wise said.

The slowdown led to a one per cent contraction in revenues for the final quarter to £223.5m. The update sent shares plunging beyond seven per cent by close yesterday.

Wise’s account product has allowed it to rake in cash on the money on the back of rising interest rates over the

Post-SVB reform to UK banking divides sector

FIGURES in the banking sector remain divided over suggested reform over deposits, with regulators reported to be mulling raising the deposit insurance threshold in the wake of the collapse of Silicon Valley Bank (SVB) last month.

According to a report in the Financial Times, regulators are now considering updating the Financial Services Compensation Scheme (FSCS) in order to shore the system up with tighter liquidity rules and greater deposit protection.

According to the report, regulators worry the current £85,000 threshold for deposit insurance is too low and the lack of pre-funding for the FSCS means there are delays for customers to regain access to their cash.

However, sources in the banking sector were divided about the impact this would have, with deposits under the current system insured through levies on banks, meaning lenders could face greater costs under the proposed reforms.

One bank source suggested it might improve bank resilience and consumer protection, particularly for smaller banks, while another said that an increase to the deposit ceiling would

strengthen consumer confidence in the banking sector.

However, others suggested that higher levies would simply add another cost to a sector already struggling to develop a convincing investment story.

They also suggested that the particular concentration risks at SVB were relatively unusual and so did not merit a rush to regulation in the UK context.

Thanks to technological advances, SVB saw $42bn in outflows in a single day –the largest bank run in history.

Lee Doyle, partner at Ashurst, said: “Digitalisation and increased [social] media coverage means a ‘run’ on a bank is both more likely and swifter to occur. Anything to control or delay such a tidal wave effect of concern must be seen positively.

“Clearly such a step will come with a cost to the sector in some form, but it would be a small price to pay to avoid a run such as occurred on SVB.”

Meanwhile, John Vickers, who is one of the architects of the UK’s regulatory framework, suggested that an increase in deposit protection should be seen as a “quid pro quo” for holding more capital and that shielding more money from bank failures would expose taxpayers to risk.

last year.

Revenues for the year jumped 73 per cent up to £964.3m. In a statement yesterday, chief Kristo Kaarmann was staunchly positive, claiming the results show “great progress”.

“Over 6m people and businesses used Wise for moving and managing their money internationally during the [final] quarter; a 33 per increase year-on-year,” he said. “Customers moved nearly £27bn.”

Wise has lost a third of its value since its market debut two years ago.

Wise boss Kristo Kaarmann remained optimistic yesterday despite the slowdown

TOUCHDOWN Entain celebrates record customer numbers thanks to Super Bowl

COVID LOAN FRAUD: MORE THAN 450 COMPANY DIRECTORS DISQUALIFIED IN CRACKDOWN

The Insolvency Service announced that 459 of the 932 disqualifications it had announced for fraud were related to the coronavirus financial support scheme,which was introduced during the pandemic to help businesses in lockdown.

This comes after the organisation published its monthly figures for March yesterday, showing more companies in England and Wales entered insolvency during the month than at any point since records started three years ago.

When it comes to Covid financial support, the insolvency service took enforcement action bringing criminal prosecutions against six directors at companies, all of which led to convictions, and even imprisonment.

LADBROKES-OWNER Entain yesterday welcomed a “strong start” to the year as the firm reported a 15 per cent rise in first quarter net gaming revenues thanks to a surge in betting on the Super Bowl. Shares in the London-listed firm closed up seven per cent.

COULD OFGEM’S PREPAYMENT METER CRACKDOWN END UP FUELLING ‘BAD DEBT’?

GSK coughs up £1.6bn

for

Bellus in bid to boost medicine cabinet

momentum going into the next decade with expected loss of patent protection of one of its key compounds.

GSK PLANS to buy Canada-based drug developer Bellus Health in an all-cash deal for £1.6bn as the British drugmaker expands its bet on respiratory therapies.

The move to replenish its pipeline comes as GSK investors fret about whether there is enough in the medicine cabinet to keep the

At the heart of the deal – announced by both companies yesterday – is the experimental drug camlipixant, which is in late-stage development for refractory chronic cough.

GSK’s offer of £11.86 per share is more than double Bellus’ closing price of £5.84 per share on the Nasdaq on Monday.

Ofgem stopped short of banning forced prepayment meter installations yesterday – instead bringing in a code of practice which toughens the circumstances in which they can be used. This has led to criticism from anti-poverty charities such as National Energy Action and End Fuel Poverty Coalition, who are concerned many vulnerable groups remained exposed to pre-payment meters. Not only does this put millions of Brits at risk of fuel poverty if gas prices spike again, but it leaves energy suppliers highly vulnerable to market shocks –which could drive up prices again for every households.The collapse of 30 suppliers across the energy sector added around £94 onto record energy bills last year.

Ovo warns over net zero as it unveils new tariff to fight greenwashing

NICHOLAS EARL

THE UK will miss its net zero goals without bolder action from the government and energy industry to make homes greener and more efficient, the boss of big six supplier Ovo Energy has warned.

Raman Bhatia, chief executive of Ovo, has argued suppliers need to

encourage customers to improve the energy efficiency of their home, reduce energy usage, and embrace the shift from gas to electricity.

As it stands, 85 per cent of UK households are heated by gas – with the country’s housing stock among the least energy efficient in Europe.

Ovo has also pledged to fight industry greenwashing, and has

announced plans to scrap 100 per cent electricity tariffs backed by certificates from next month.

Speaking at an event at the Tate Modern in London yesterday, Bhatia said: “Greenwashing is a luxury no one can afford. By making this change we’ll save consumers money and reinvest in true green energy, and we hope others will follow our lead.”

CHRIS DORRELL

NATALIE GROVER AND ABY JOSE KOILPARAMBIL

Cineworld halts sale of overseas cinema business

ABBY WALLACE

SHARES IN Cineworld skyrocketed almost 50 per cent yesterday after it announced it would keep hold of its businesses outside of the UK, US and Ireland.

The London-listed firm – which filed for bankruptcy in the US last August – said it had fielded offers for its “Rest of World” business but they “did not meet the value level required by the group’s lenders.”

The news comes after the embattled cinema chain previously revealed that it would launch a new debt-restructuring plan which would wipe out shareholders in a bid to reduce its $4.53bn (£3.68bn) debt pile and to exit Chapter 11 insolvency in the first half of 2023.

The company was also forced to halt the sale process of its US, UK and Ire-

land businesses earlier this month.

The cinema operator announced it would be taken over by its creditors in a bid to restructure its debts and keep the struggling company afloat.

Cineworld, which has 127 UK branches and over 700 globally, was badly hit during the pandemic as theatres were shuttered and competition from streamers increased. Shares, even with their rally yesterday,

Cineworld has become a poster-child for postCovid business casualties

are still trading down over 95 per cent on the year.

“This is a disappointing move for shareholders but the raising of much-needed funds to preserve the brand to the point it can rebuild is the best course of action,” Jason Freedman, insolvency partner at Gowling WLG, said.

EASYJET’S SHARE PRICE STILL SUFFERING FROM LONG COVID

Easyjet turning a corner as demand soars

GUY TAYLOR

EASYJET yesterday announced a £120m improvement in its first half performance year on year, as the lowcost airline continued to turn around its business.

Headline losses before tax for the first half are expected to land in between £405m and £425m, in spite of economic challenges including inflation and rising fuel costs. Most airlines make most of their profits in the summer.

The airline reported an especially

Halfords’ motoring shift starting to pay off as retailer’s shares kicked up a gear

LAURA MCGUIRE

HALFORDS’ share price soared over eight per cent yesterday as the motoring and cycling giant revealed its sales could top £1.9bn this year.

The Birmingham-headquartered retailer, which has seen its shares slide 30 per cent in the last year, said it expected pre-tax profits to come in at around £90m to £110m, up from £50m

to 60m the previous year.

Halfords also outlined its mid- to long-term growth strategy, saying it was eyeing a greater expansion of its motoring services, including a ‘onestop-shop’ for motoring ownership.

The retailer also said it would look to invest in colleague training so as to establish a “market leading position” in the servicing of all forms of electric cars, vans, scooters and bikes.

Halfords’s boss Graham Stapleton praised the performance and said the business saw “significant potential for future growth, both in [its] existing business and in adjacent markets”.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said the group’s shift to a more servicesfocused group “may just pay off”, with the retailer in need of rebuilding investor confidence.

strong Easter, with 1,600 flights operating each day and capacity around pre-pandemic levels. Easyjet said 99.8 per cent of planned flights jetted off despite disruption from French strikes over pension reforms.

It continued to increase its capacity throughout the quarter, growing 40 per cent from January to March, and is expecting to hit prepandemic capacity by summer.

Easyjet boss Johan Lundgren said: “Demand for our flights and holidays has continued to grow, resulting in more than a £120m pound

improvement in our performance as well as a billion pound revenue improvement year on year.”

As a result, Easyjet expects to outperform market expectations of pre-tax profits of £260m for FY23, he said.

John Moore, senior investment manager at RBC Brewin Dolphin, put the airline’s success down to it “taking more of a ‘Ryanair approach’ to routes [and] baggage allowances”, which helped protect margins.

“There are real signs the airline is beginning to turn a corner” he added.

Halfords is aiming to become a market leader in the servicing of all forms of vehicles

Brits still feeling the squeeze with the Bank left in the rate rise pickle

JACK BARNETT

UK WORKERS are still being squeezed by a historic inflation crunch despite wage increases smashing expectations, official figures released yesterday morning revealed. The average pay increase including bonuses hit 5.9 per cent over the three months to February, up from the previous period and above the City’s expectations of a 5.1 per cent increase, according to the Office for National Statistics (ONS).

However, despite the overshoots, inflation, which has raced to a 40year high, is still eroding workers’ living standards.

The ONS said real wages – which measures cash pay growth minus the rate of price increases – fell 4.1 per cent over the three months to February when accounting for the consumer price index, Britain’s official inflation measure.

Stronger than expected pay growth has raised the risk of Bank Governor Andrew Bailey and co backing a

THG shrugs off losses as it mulls Apollo buyout

LAURA MCGUIRE

A NEAR HALF-A-BILLION operating loss in 2022 wasn’t enough to stop embattled THG boss Matt Moulding (pictured) hailing “good progress” at the retailer, with the possibility of a buyout bid still the talk of the Square Mile.

THG, which owns brands including Lookfantastic and Myprotein, revealed an operating loss of £495.6m as the ecommerce platform admitted having to fork out for soaring international delivery costs and a stock review.

The news came a day after THG revealed it had received a preliminary buyout proposal from private equity firm Apollo Global Management, sending shares up almost 40 per cent.

Yesterday’s results saw some of those gains lost, however, with the group’s share price closing down 19 per cent. That came despite a significant uptick in revenues last year.

THG said the decision to nix non-core products and deflation in whey prices –vital to the firm’s protein powder business – would help

WHAT THE EXPERTS SAY

twelfth straight interest rate rise at their next meeting on 11 May.

The central bank’s economists are worried future inflation could stay above their two per cent target due to bumper pay growth that isn’t offset by productivity gains strengthening incentives for businesses to raise prices.

Inflation numbers will be released this morning, and most City analysts expect a higher than expected readout would lead to a hike up to 4.5 per cent at the MPC meeting.

That upgrade has “raised the chances of the MPC hiking Bank Rate again next month; a further 25 basis points now looks like a toss-up

with the cost base moving into 2023.

“The challenging macro and inflationary environment required decisive action across the business with around £100 million of efficiency savings delivered,” Moulding said, citing optimism about the near future.

The firm surprised investors yesterday by confirming a non-binding proposal from Apollo yesterday, which it said was in response to press speculation –although Apollo itself was not mentioned in a small report over the weekend. The announcement came around a year after THG previously floated the idea of a buyout via the regulatory news service.

Victoria Scholar, head of investment at Interactive Investor, said: “THG shareholders have had an extremely tough time with this stock which is down around 90 per cent since floating on the London Stock Exchange in September 2020. Investors are hoping that a PE buyout could put an end to this bad chapter.”

Apollo must announce a firm intention to make an offer by 15 May.

UK

LOSING ITS SHINE? Sales fall at Londonlisted gemstone maker Petra Diamonds

SAMUEL TOMBS, CHIEF UK ECONOMIST AT CONSULTANCY PANTHEON MACROECONOMICS

IN BRIEF

BARGAIN HUNTERS LIFT MONEYSUPERMARKET

A boom in consumers shopping around for better savings accounts has boosted sales for comparison site Moneysupermarket. The platform saw revenues across its money division, which compares current and savings accounts, credit cards and loans, jump by 37 per cent over the year. Its adjusted earnings were up by 15 per cent, from £101m in 2021 to £116m last year. Peter Duffy, the chief executive, said: “I’m pleased to report a strong return to revenue and profit growth as we build strategic momentum.”

LIONTRUST IN TALKS TO BUY SWISS RIVAL GAM

London-listed gemstone maker Petra Diamonds saw shares fall around three per cent yesterday. Revenues for the third quarter came in at $67.8m (£54.6m), down from $107.8m in the second quarter, though diamond production jumped.

Shell restarts operations at Pierce Field in North Sea after upgrades

SHELL has restarted operations at the Pierce field in the Central North Sea, following an upgrade to allow gas to be produced at the location after years of it producing only oil.

Pierce is a joint venture between Shell, which owns 92.5 per cent of the venture, and Ithaca Energy which owns the rest.

Peak production at the field is expected to reach 30,000 barrels of oil

equivalent per day, the energy major said in a statement, which is more than twice the production prior to redevelopment, with more gas being produced than oil.

London-listed asset manager Liontrust is in talks to snap up its Swiss rival GAM Holding, the firms confirmed yesterday. The FTSE 250 firm said it had “made an approach” to the board of Zurich-listed GAM to acquire the firm. The firm said there could “be no certainty that this will lead to a formal offer” and that a further announcement would be made “as and when appropriate”. The discussions comes after a turbulent period for GAM in which it has been rocked by its ties to nowcollapsed supply chain finance firm Greensill Capital.

MITIE SHARES SOAR AFTER £50M BUYBACK

Substantial modifications were made to the floating production, storage and offloading vessel (FPSO) Haewene Brim, which is used to produce hydrocarbons at the Pierce field, Shell said. The FPSO had stopped production in October 2021 to enable the field’s upgrade.

Reuters

News of a £50m buyback from Mitie saw shares in the firm lifted over 13 per cent yesterday as the outsourcer reported that it expected to beat profit expectations. The firm, which helped deliver Covid-19 testing services during the pandemic, said it had now replaced all Covid-19 related work with new contracts, including a £40m agreement with Eurostar along with other big ticket public sector projects.

M&C Saatchi shares dip after pre-tax profits hit by rebuffing takeover bids

REPORTER

CITY A.M.

SHARES in M&C Saatchi closed down nearly 11 per cent yesterday after the advertising giant reported that its statutory pre-tax profits had been hit by costs associated with fending off multiple takeover bids.

The company said that its statutory profit before tax for 2022 was £5.4m,

down from £21.6m in 2021, which was “adversely affected predominantly by £10.8m of one-off defence costs relating to the failed takeover bids for the company”.

Businesswoman Vin Murria and her investment vehicle AdvancedAdvt, a major shareholder in M&C Saatchi, along with rival Next Fifteen were locked in a drawn out bidding war for

the firm last year. But neither party was ultimately able to secure enough backing for their offers.

Despite the hit, it reported a jump in net revenue for 2022, up 8.7 per cent for the year.

Chief executive Moray MacLennan said it was “another year of record results, in a year not without challenges”.

MUHAMMED HUSAIN

A DROP in sales at

Pay growth picked up again to rates not previously seen outside of the pandemic. This reflects general inflation spilling into pay demands as employees seek to mitigate the cost of living squeeze

YAEL SELFIN, CHIEF ECONOMIST AT KPMG

THE NOTE BOOK

The CBI can save itself, if it wants to

WHEN it was founded in 1965, the Confederation of British Industry (CBI) was intended to disrupt the cosy dialogue between the Wilson government and the trade unions. Back then, the unions called the shots – they were invited into Number 10 to discuss industrial and economic policy, leaving assorted company leaders out in the cold.

As a result, it quickly became known as “the bosses’ union”. It is not a moniker that has been in use recently – since if it was indeed a union, it has not been doing a very good job for its members. At all.

In my experience, business leaders really only want two things from government: lower taxes and less regulation. A grant or two would be nice but, on the whole, businesses would prefer to keep their money, rather than hand it to a government which drip feeds it back and expects gratitude to boot.

On these two measures, the CBI has resolutely failed. Businesses are groaning under a mountain of regulation, which grows higher every year, and the main rate of corporation tax has risen to 25 per

cent, up by a third – the largest single increase in living memory.

By contrast, the trade unions have been performing very well for their members – witness the number of large pay deals both Unite and Unison have secured for them in the past year.

Several hundred barrels of ink have already been consumed predicting the imminent demise of the CBI, following the sacking of its director-general Tony Danker. The BBC has even been asking its largest members whether they are thinking of quitting.

I don’t buy into that – most CBI members will give it the benefit of the doubt for now.

But the new director-general, Rain Newton-Smith, urgently needs to return the organisation to its core purpose. She should significantly reduce its bloated 250strong staff, lower membership fees, abolish many of its committees and focus on holding the government to account on the twin key issues of regulation and business tax policy. In short, she needs to give her members value for money, which is something they should all understand.

Neil Bennett is global co-CEO of H/Advisors, the global comms and advisory firm, and a former City editor

ANOTHER WEST END TRIUMPH ON THE CARDS

BERMUDA SHORT

I spent a few days last week in Bermuda, visiting insurance clients. Hamilton, the capital, is a boom town. While much of the City of London is languishing, Bermuda’s insurance and reinsurance sectors are sunning themselves in one of the best markets they’ve seen in decades – with premiums up 20 or even 30 per cent.

The Bermudian authorities have been clever by not being content to be a mere brass plate destination. Instead, they have built a fully fledged insurance industry there, which has brought wealth and stability to the island. Britain either ignores its remaining Crown Dependencies or takes them for granted. As an alternative, we could learn a few things from Bermuda’s success in building one of the world’s largest insurance markets on a foundation of sound regulation and low tax.

£ More cheerfully, the current Lord Mayor has been doing his bit for the City of London, even when others won’t or can’t. Too often in the past the Lord Mayor (chosen by some arcane system amongst the Guilds) has been an anonymous greengrocer from Enfield or somesuch, who has done little or nothing to further the Square Mile’s interests. By contrast Nicholas Lyons came to the job last November with real gravitas, and had to take a sabbatical as chairman of Phoenix Group to take on the role. True to form he has tackled the job with real energy, banging the drum for all that we have to offer to the world. Too bad that he only has a one-year term that expires in November. Perhaps like Dick Whittington he can be persuaded to do it again.

SNP in ‘total meltdown’ as Beattie arrested

KATRINE BUSSEY AND CRAIG PATON

FIRST Minister Humza Yousaf yesterday said he had not spoken to his predecessor Nicola Sturgeon “in the last couple of weeks”, as he rejected calls to suspend both her and her husband from the SNP amid the ongoing police probe into the party’s finances.

Yousaf’s comments came as the police investigation saw SNP treasurer Colin Beattie arrested yesterday morning.

The arrest of Beattie, 71, who served as the SNP’s national treasurer between 2004 and 2020, and again in 2021, comes less than two weeks after Sturgeon’s husband was arrested as part of the same investigation.

Peter Murrell, the former SNP chief executive, was questioned by officers on Wednesday 5 April as officers searched the home the couple share. He was later released without charge, pending further inquiries.

Police Scotland have been looking into how more than £600,000 in donations to the party, earmarked for an independence referendum, had been used –but Yousaf said yesterday he would not be speaking to his predecessor about the investigation.

The First Minister told journalists at Holyrood: “I haven’t spoken to Nicola in the last couple of weeks, but I will get to speak to Nicola, I am certain I

will. But one thing Nicola and I will not be talking about is the police investigation. That would be wholly inappropriate.”

Scottish Tory deputy leader Meghan Gallacher however said Mr Yousaf should “tackle this scandal head-on and prove he is his own man” by suspending both the former first minister and her husband.

Speaking in Holyrood, Gallacher said:

“The SNP is in total meltdown.”

“Its former chief executive and now its current treasurer have been arrested amid a police investigation into the party’s finances.

“And leaked footage has shown Nicola Sturgeon trying to shut down scrutiny.”

Her comments came after Scottish Conservative chairman Craig Hoy called for Beattie, Murrell and Sturgeon to be suspended from the SNP.

Hoy said: “This extremely serious matter is escalating by the day and everyone in the SNP has a duty to be as transparent as possible about what they knew and when.”

But Yousaf said it was a “really important point of natural law that people are presumed innocent until guilty”.

The First Minister stated: “Of course if they are guilty I would take the appropriate action, whether that is suspension or going further than that.

“But it is really important that due process takes place.”

Following the recent success of The Lehman Trilogy, another business/political drama is coming back to the West End, this time after starting in the Almeida in Islington. Patriots is the story of the rise and fall of Boris Berezovsky, original oligarch and Putin’s kingmaker. It stars Tom Hollander, who is brilliant in everything he does and I for one will be queueing up for an early ticket.

CAN I QUOTE YOU ON THAT?

Sir, you don’t know what you’re talking about. You can’t even give me a single example.

Elon Musk rips into an ill-prepared BBC reporter in one of the most entertaining business interviews in years

Whatsapp: UK online bill puts privacy at risk

ABBY WALLACE

ENCRYPTED messaging apps, including Whatsapp, Signal and Viber, have warned that the Online Safety Bill could lead to “indiscriminate surveillance” of people’s personal messages and have called for end-to-end encryption to be protected at all costs. The bill is intended to protect underage users on the internet by clamping down on illegal material and placing a legal responsibility on companies to monitor and remove it.

But tech companies have warned that the bill could grant the UK communications regulator Ofcom broad powers to access people’s encrypted messaging apps.

Scully said London’s need for change had motivated him to consider running

Minister Paul Scully ‘considering’ run for London mayor in 2024

JESSICA FRANK-KEYES

MINISTER for London Paul Scully yesterday said he is “considering” running against Sadiq Khan to be the next London mayor in 2024.

Speaking at a Centre for London event yesterday, Scully, Conservative MP for Sutton and Cheam, said: “Let me tackle this head on, am I considering running for London mayor in 2024? Yes, I am considering it. I haven’t made a decision yet.”

“When you’ve got the Met Police in special measures, the fire brigade in special measures, Transport for London in dire financial straits and not enough housing being built, you need a change, and that’s what’s driving me to look at this.”

It comes as the Conservatives are preparing to take on Khan in a bid to regain control of the capital next year, with insiders suggesting the unpopularity of the ULEZ expansion has played into their hands.

“As currently drafted, the bill could break end-to-end encryption, opening the door to routine, general and indiscriminate surveillance of personal messages of friends, family members, employees, executives, journalists, human rights activists and even politicians themselves,” the companies said in an open letter to the UK government.

The Home Office, however, said the bill “in no way represents a ban on end-to-end encryption”.

“We support strong encryption, but this cannot come at the cost of public safety. Tech companies have a moral duty to ensure they are not blinding themselves and law enforcement to the unprecedented levels of child sexual abuse on their platforms,” a spokesperson for the Home Office said in a statement.

Pub boss thanks Thirsty Thursday for sales boost

LAURA MCGUIRE

THE FOUNDER and chairman of City Pub Group said the capital had been the “key driver” to the group’s recovery as it recorded a return to pre-pandemic sales levels.

Clive Watson, who oversees a portfolio of popular pubs including The Phene in Chelsea, told City A.M. that London was “doing best” compared to its sites in regions such as Cambridge.

Watson credited the growing trend of professionals in the City heading out for post-work drinks on a Thursday for the sales boost, noting that the end of the ‘in-person’ work week for many in the capital is the busiest day for pub trade – though he noted that Friday trade is also now picking up.

“Thursday tends to be office workers having

end-of-week celebrations, and then Friday you are seeing people coming into London who aren’t necessarily working [in the office], for a big Friday night out,” Watson said.

The freehold pub operator, which has 43 pubs across southern England and Wales, welcomed a 63 per cent jump in revenues to £57.8m for the year.

With the group set to snap up the remaining shares it does not own in Mosaic Pub & Dining Group, Watson said City Pub Group has the “platform and balance sheet” to take its portfolio to up to 70 pubs over the coming

“The key thing is quality. [City Pub Group] is a premium pub operator. There are a lot of acquisition opportunities. We’ve got growth in place for the next 18 months,” he said. “But if the right asset comes at the right price, we will be there to take advantage of the situation.”

250,000 tourists set to serve up multimillion pound boost to London’s trade

LAURA MCGUIRE

LONDON’s retail and pub businesses are gearing up for a multi-million pound boost in trade over the weekend of the King’s coronation in May as tourists will send sales in drinks and shopping to new highs.

Sarah Willingham, owner of pub group Nightcap PLC, told City A.M. that the celebration is a welcomed

“injection boost for the sector”.

Figures by the Centre for Retail Research said the pub’s extra two hours of trade from 11pm to 1am over the Bank Holiday weekend should help boost spending in the hospitality sector by £194m.

Bamfield has predicted spending on souvenirs and memorabilia to generate spending of £19.8m.

Moreover, as some 250,000 foreign

tourists are predicted to flock to the capital to experience the coronation, visitor spend is expected to reach £323m as the tourists splash out on hotels, restaurants, retail shopping and visiting attractions in London. It comes as footfall and spending in the capital has been hit by a number of factors including a flurry of rail strikes and high inflation which have limited consumer spending.

IN DEFENCE OF CAPITALISM

IN HIS 2015 encyclical ‘Laudato Si’, a blazing indictment of capitalism, Pope Francis proclaimed: “Since the market tends to promote extreme consumerism in an effort to sell its products, people can easily get caught up in a whirlwind of needless buying and spending. Compulsive consumerism is one example of how the techno-economic paradigm affects individuals”. In a similar vein, the Swiss sociologist Jean Ziegler wrote: “Consumer society is based on a few simple principles: its members are customers who are seduced into buying, consuming, and throwing away goods in everincreasing numbers, and enticed into acquiring new goods even when they don’t really need them”.

Such criticism of consumerism is nothing new. When the thesis that capitalism leads to the impoverishment of the broad masses of the working class was refuted by developments in the United States and Western Europe after the Second World War, the “New Left” virtually turned the argument around: Not too little, but too much consumption was the true evil of capitalism, they claimed. There was even talk of “the terror of consumption”. This involved capitalist companies first artificially creating “needs” among consumers through advertising, then partly satisfying them with cheap, inferior goods, in the epitome of the “throwaway society”.

The British philosopher Roger Scruton characterised the critique of “overabundance” and “consumer society” when he wrote: “This story turns the proof of our freedom – namely, that we can obtain what we want – into the proof of our enslavement, since our wants are not really ours.”

For intellectuals – whether on the left or the right of the political spectrum – criticising consumerism was and is a means of distinguishing themselves from both the economic elite and the broad masses. Intellectuals, the bearers of the critique of capitalistdriven consumerism, fundamentally despise everyone who is not like them: the masses, who indulge in superficial consumption, and the capitalists, who also lack the right education and culture. Both the masses and the capitalists, these critics posit, are united by disdainful materialism, which stands in complete contrast to the idealism of true values and elevated culture that characterise the educated bourgeoisie. Criticism of consumer capitalism continues to be formulated by intellectuals right up to the present day, and it is becoming increasingly strident and relentless. In 2009, the British author Neal Lawson published an article in The Guardian under the headline “Do we want to shop or to be free? We’d better choose fast”. His critique:

ALL TOO MUCH?

“We consume to buy identity, gain respect and recognition, and secure status. Shopping is the predominant way in which we know ourselves and each other, and it is at the point of ruling out other ways of being, knowing and living… The market competes like a shark; it has no morality but feeds incessantly on us to get us to buy more because sales and profits must go up and up.”

Lawson’s critique culminates in equating the Gulag Archipelago, the network of forced labour and concentration camps in Stalin’s Soviet Union where millions met their deaths, with the Italian luxury brand Gucci, which he regards as the incarnation of consumer capitalism: “Totalitarianism, a society where alternatives are ruled out, was meant to arrive in the jack-

boots of the communist left or the fascist right. It now arrives with a smile on its face as it seduces us into yet another purchase. The jackboots are in this season’s colour and style. We are watched, recorded and ordered not by our political beliefs but by our shopping desires. The gulag is replaced by Gucci.”

Of course, capitalism creates a whole host of products that you or I would call useless and superfluous, simply because they are useless and superfluous to us personally. But capitalism is a free and democratic system in that it lets people decide for themselves what they need or don’t need (with the exception of products that are banned for good reason, such as child pornography). The alternative would be a government-run, command economy in

which politicians and civil servants decide what products people need or don’t need. Ludwig Erhard, who introduced the market economy in West Germany after the Second World War, once ironically observed of critics of the capitalist consumer society: “If the ladies want cuckoos on their hats, let them have cuckoos. I am certainly not about to ban the production of hats adorned with cuckoos”.

£ Dr Rainer Zitelmann’s new book, ‘In Defence of Capitalism’, has just been published and is widely available.

A welcome antidote to a growing anti-capitalist crusade

IMAGINE someone programmed a Twitter bot which, every time somebody describes a problem of some sort, responded with some variation of “I think you will find that the root cause of the problem is capitalism!”

That bot would easily get tens of thousands of likes, retweets and supportive replies every time. Anti-capitalist platitudes, no matter how lame and clichéd, almost always do. More, the bot would probably soon receive invitations to appear on Question Time and Good Morning Britain,

Book Review

Dr Kristian Niemietz

and to write for The Guardian and the Independent.

Anti-capitalism is extremely in vogue: it is the conventional wisdom of our age. This is

not limited to the social media bubble. A recent report by the Fraser Institute, ‘Perspectives on Capitalism and Socialism’, shows that one in three British millennials believe that “the ideal economic system for the United Kingdom is communism”. This makes Dr Rainer Zitelmann’s latest book ‘In Defence of Capitalism: Debunking the Myths’ all the more timely and relevant. Dr Zitelmann takes aim at ten of the trendiest anti-capitalist clichés, and rebuts them thoroughly. This includes some which are as old as capitalism itself (e.g.

“capitalism is responsible for hunger and poverty”), some recent additions (e.g. “capitalism is responsible for environmental destruction and climate change”), and some which have been added to the mix at various stages in between.

Dr Zitelmann is not preaching to the converted. He engages seriously with the arguments he is rebutting, and quotes their proponents at length, giving them a fair hearing. He neither misrepresents his opponents, nor does he pick on their weakest arguments.

You can read this book at more than one level. It is accessible enough for someone who is new to these arguments, since Dr Zitelmann does not expect extensive previous knowledge from his readers, and keeps economic and sociological jargon to a minimum. But a more advanced reader, who is already familiar with the basic arguments, will still find plenty of new information.

£ Dr Kristian Niemietz is head of political economy at the Institute of Economic Affairs

In the last of an eight-week series, German historian and sociologist Dr Rainer Zitelmann makes the case that capitalism is the answer to many of the world’s problems –not the cause. This week, he mythbusts the idea that free markets persuade us to want more than we need.

Capitalism is a free and democratic system in that it lets people decide for themselves what they need or don’t need

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FTSE 100 report: China growth spurt jolts London miners higher

LONDON’s FTSE 100 bumped upwards again today, boosted by stronger-than-expected Chinese economic growth boosting sentiment toward the capital’s biggest listed industrial giants.

The capital’s premier index climbed 0.38 per cent to 7,909.43 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, was broadly unchanged at 19,296.32 points.

Miners have been on a tear of late, mainly driven by investors pouring into the sector on intensifying expectations that China’s economic reopening from tough Covid-19 measures will

charge demand for commodities. Numbers out yesterday revealed the world’s second largest economy grew 4.5 per cent in the first quarter of this year, much better than analysts’ forecasts.

China is a huge consumer of commodities, so any economic over-performance should jack up the revenues of the largest industrial companies.

Miners Antofagasta, Anglo American, Glencore and Fresnillo all shot to the top of the premier index, notching gains of more than 1.9 per cent.

The pound notched strong gains against the US dollar, strengthening around 0.4 per cent.

Outsourcing firm Mitie expects improved revenue in 2023 as it increased its ebita guidance by seven per cent to £155m and announced a £50m share buyback. Peel Hunt analysts said they “confidently” maintained their buy rating at 92p per share.

M&C Saatchi reported net revenues of £271m for 2022, up 8.7 per cent on the same period in 2021 and expects profits of £37m in 2023, but Peel Hunt analysts expect growth of 14 per cent due to cost savings. Its buy stance remains at 260p per share.

As global demand for banknotes hits 20-year low, are Britons still using cash?

BANKNOTE manufacturer De La Rue recently announced that demand had hit a 20-year low, citing lower cash usage since the pandemic when central banks stocked up on currency. It’s a good excuse to look at where cash sits in the nation’s payment mix. Using YouGov Profiles, we can do just that. Our data shows when it comes to buying products in-store, contactless debit card payments are the most commonlyused method (63 per cent) among Britons, with cash coming in second (56 per cent).

Stephan Shakespeare

ments (40 per cent). The only age group where cash is still dominant is among the over-55s.

Cash is significantly less popular for in-store purchases among Britons aged 18-34 (40 per cent): it’s significantly less commonly used than contactless debit card payments (64 per cent) and roughly as used as chip-and-pin debit card pay-

So cash is still an important payment option, and reports of its death – which have been circulating for some time –remain exaggerated. But while its status among older consumers may be relatively assured, when De La Rue rolls out its new King Charles banknotes next year, most younger consumers – on the current evidence – won’t even use them.

Stephan Shakespeare is the co-founder and CEO of YouGov

CHINA SPLASHES OUT “Miners Fresnillo, Anglo American, Endeavour and Glencore were all amongst the day’s big forward movers thanks to stonking growth from China in the first three months of the year as Covid restrictions were lifted and the country splurged with a fresh bout of revenge shopping.”

DANNI HEWSON, AJ BELL

OPINION

EDITED BY SASCHA O’SULLIVAN

Can Britain find a way to stop being so squeamish about sex on OnlyFans?

towards being open and having those conversations about sex.”

Imade record labels so much money off my body,” said Iggy Azalea, the Australian rapper, last month, “(I only got) the smallest cut off my own f***ing body and my own work and my own ideas.”

Now she posts naked pictures online, and it’s not record labels taking a cut, it's OnlyFans, the subscription-only social media platform famous for, well, sex, or what its chief executive officer Amrapali Gan calls “spicy content”.

But let’s be honest: it’s sex. It is either scantily clad or completely naked women, with the occasional comedian or musician thrown in there.

Azalea joined the platform to own the money already being made off of her body. Unlike record labels, OnlyFans only takes 20 per cent commission.

The rapper was unabashed by her nudity: “I’m going to post pictures like that anyway because I like it and I think they’re beautiful, and I like my breasts. F***ing sorry!”

She knows sex sells, OnlyFans knows sex sells, the music industry and every other entertainment industry knows sex sells. But here in the UK, we still can’t quite admit it to ourselves.

When OnlyFans has conversations with politicians and other businesses in the US, the discussions are about the business model. Unlike other platforms, there’s no ads, there’s no algorithms, and, especially important to Americans, there’s no China.

In Britain, the dominant concern is

that it’s a platform packed full of sex. In December last year, Conservative MP Laura Farris accused the platform of wanting to dodge its obligations, and refusing to accept that “it exposes (children) to harm.”

She said: “It relies on the fallacy that the user is in control, and operates an exploitative business model predicated on that false promise.”

OnlyFans has been fierce in its rebuttal of the idea it doesn’t care about kids on the site. Keily Blair, the chief operating officer, who was previously a lawyer in charge of cyber and privacy, said there were more checks for kids getting onto OnlyFans than there were for them using a fake ID to get in a club. Speaking to City A.M., Blair said: “As well as your ID, we’re also checking your social media profile before you come in to see you are

the same person that you are on the rest of the internet, and we’re also checking in regularly, so if you’re in the club for three hours, once an hour, we’d be like, can I see your ID again, please?”

OnlyFans won’t say so, but children are ingenious. They will probably game the system to look at the pictures Iggy Azalea won’t post on Instagram. They would do the same if they were trying to watch porn elsewhere on the internet. Recently, there has been an outcry over the prevalence of choking during consensual sex among 20-something-yearolds. It was blamed on the porn industry and a generation who grew up with almost unencumbered access to it on the internet. They’re probably right; the writer Amia Srinivasan has written eloquently about the impact of porn on modern views about what is acceptable

or desirable during sex. But these were kids growing up long before OnlyFans.

In Grotte de Cussac, in the Dordogne river valley in France, there is a palaeolithic engraving of a woman dating back to around 25,000 years ago. She is depicted with a derriere that would make Kim Kardashian jealous. People have found ways to look at sex in whatever forms they have at their disposal. It just so happens that we’re not carving into rocks, we’re on this odd contraption known in common parlance as the World Wide Web.

As Blair says: “It is a part of our society, it is a part of our society that is for grown ups, not for kids, let’s be very clear, but if it is part of our society people deserve a safe platform, where they get paid to be in control.”

She added: “As a society, we are moving

Monopolies hire too many pointless managers and kill off productivity growth

THE need to increase productivity is of fundamental importance to the political economy of the Western democracies. As I’ve written, the causes for this slowdown in productivity eludes a consensus.

The big tech companies are often seen as hives of innovation. But they might be responsible for at least part of the productivity problem.

In the Western economies, small and medium sized companies (SMEs) contribute around 50 per cent – the number varies somewhat across countries –of total output. For the most part, they really are small. Most of them are sole traders who set up their businesses as a company. They literally have zero employees. The next most frequent number of employees in a company is one.

These very small SMEs exist in vast numbers. But they almost invariably have low productivity levels. The key word here is “almost”. A tiny percentage of them grow rapidly and become large. Google famously started with just two people in a garage.

Paul Ormerod

During the growth phase of such companies, productivity is high. But over the past decade or so, a small number of tech firms have grown so stupendously large that they effectively dominate their markets. Their rise has led to an increase in what economists call the degree of monopoly in the economy.

This is part of a general trend for output to become more concentrated in large firms in the 21st century. The American Office for Advocacy, for example, estimates that over a 15 year period the output of SMEs grew at an annual average of 1.4 per cent, while large firms grew at 2.5 per cent.

The market power which size confers

often breeds complacency, especially with monopolies. Readers of a certain age will recall the old British Rail, which almost makes the current set of train operators look like models of efficiency. If you wanted a telephone installed, there were only landlines available. The state-run outfit which morphed into British Telecom might deign to carry out the task after a wait of at least six months.

But near-monopoly positions in the private sector also lead to inefficiencies and waste. A very good example is provided by the current wave of redundancies in the tech giants.

The first bloodbath came after Elon Musk purchased Twitter. The company’s headcount is down by some 75 per cent. Others have followed suit. Mark Zuckerberg has laid off tens of thousands at Meta.

Astonishingly, when Zuckerberg commented on a recent wave of sackings, he said: “Since we reduced our workforce last year, one surprising result is that many things have gone faster.” In other words, the company had taken

on unnecessary layers of management which actually reduced productivity.

The anthropologist David Graeber wrote convincingly about purposeless jobs in his best seller Bullshit Jobs. His contention that over half of jobs were useless was probably overblown. As the tech giants are discovering, there is something in his description of“managerial feudalism”, where managers need underlings in order to feel important and maintain competitive status.

At last, the tech giants are themselves facing serious disruption from newcomers such as OpenAI, the developers of ChatGPT. They are being forced to look at their business models and, in doing so, realise they have lots of scope to increase productivity.

Competition is beneficial in so many ways. The emergence of serious new competition in the tech sector should help to start increasing productivity again.

£ Paul Ormerod is an author and economist at Volterra LLP

But in the UK, we’re still too squeamish to admit it. In an interview with The Times, Gan was accused of pretending OnlyFans wasn’t making money off of sex. But the main qualm the interviewer seemed to have was with the fact the posts with less nudity garnered less money - or “tips” as they’re called.

There are fair concerns about OnlyFans. Where there is sex, there is likely to be exploitation, there will be people trying to game the system for darker, illegal content. OnlyFans has a mountain to climb to keep that off of their platforms.

There was also a bizarre moment when OnlyFans wanted to stop being the sex platform, and kick off “adult only” content. They were quickly forced to capitulate after sex workers accused them of making money off of them, and then rejecting them to be more socially acceptable. Blair seems to have learnt that lesson. She now says they are “very proud to have adult content on our site”. OnlyFans revenues grew by 160 per cent last year. They’re the only tech company not currently in the midst of mass layoffs. We’ve been happy for the music industry to make money off of sex, ditto for TV and films. Succession, currently airing to much fanfare every Monday night is packed full of sex. As Blair says, there’s “more sex in Bridgerton” than on some of the content on OnlyFans. But the moment someone admits to actually doing the thing everyone was doing already, Brits giggle behindt heir hands and then grand stand against it. Azalea has 17 million followers on Instagram. In most of her pictures, she’s almost naked anyway. Why shouldn’t she be able to profit off of her own body?

COOKING UP A STORM

The iPhone has become a symbol of the ubiquity of tech in Western countries. But in India, Apple devices make up only 5 per cent of the smartphone market.

Tim Cook, CEO of tech giant, was in Mumbai yesterday to open India’s first Apple store, to try and oust Samsung

Iggy Azalea joined OnlyFans after accusing record labels of making money off of her body

Sascha O’Sullivan

Comment and features editor at City AM

WE WANT TO HEAR YOUR VIEWS

LETTERS TO THE EDITOR

Diversity isn’t just to look good

[Re: How can fintech close its gender pay gap? Top chiefs say regulation could April 17]

EY is right: to close the gender pay gap and ensure fair compensation, we need regulators to act. But this is not just a government problembusinesses must step up too.

Diversity in the workplace is more than hiring underrepresented groups for the sake of ticking a box.

A 2020 study showed that without inclusive practices, tokenising employees can lead to depression,

burnout, and attrition. To address the root issue of inclusion, businesses must invest in training programs that help employees appreciate different cultures and perspectives.

Employee resource groups and affinity networks can also provide support for underrepresented groups. Diversity is about inclusion. The goal is not just having a diverse workforce, but creating a place where everyone feels valued and empowered. Creating a truly inclusive workplace is a complex task that requires sustained effort from everyone: business leaders, employees, and regulators alike.

Bindu Upadhyay Lead Service Designer of Mendix

A MASTER PLAN Macron wants a deal with China to broker peace in Ukraine

As long as businesses want to keep their hands clean, we will need a body like the CBI

Simon Neville

THE Confederation of Business Industry is sick. The question now remains: can the illness be treated or is it terminal for the lobby group?

Reading the coverage of a culture that looks more akin to a comic strip in the men’s magazine FHM than a serious business outfit, it is clear the CBI has lots to do to recover – if it ever will.

This week the British Insurance Brokers’ Association became the first group to publicly say it had cancelled its membership and the President of the CBI, Brian McBride said a “handful” of others had quit.

It is noticeable that the only named member to quit is itself another trade body and I would be very surprised if any individual company puts its head above the parapet to say it has left.

The reputational risk to a business saying it has left for moral grounds is to open itself up to scrutiny over its own internal affairs.

Any disgruntled employee reading that their bosses have said they want to distance themselves from the CBI because it is not upholding proper standards of business will inevitably lead to a phone call or three to a newspaper. Stories about hypocrites is every media organisation’s stock in trade and unless there is a quiet exodus, I think the CBI will survive.

This is because the role the CBI plays in supporting businesses is craved more than ever before.

EXPLAINER-IN-BRIEF: IS THERE A PRICE WAR ON ELECTRIC CARS?

Did Tesla start a price war on electric cars? Elon Musk reassured us that no, they didn’t. But executives at Renault might disagree, after they too had to start considering lowering the price of their electric cars in the aftermath of Tesla’s cuts.

The chief executive of Renault, Fabrice Cambolive, had to admit the company would need to look again at pricing on a country-bycountry basis, after it initially refused to lower prices. Renault won’t be alone, with Ford having to slash prices only

weeks after the first Tesla announcement. The latter initially cut prices in the US, and then followed suit in Europe.

Renault can’t afford to come last in the game. Its sales fell by 9.4 per cent last year, repeating a downward trend that started four years ago. Remaining competitive is a priority, and the carmaker is betting on its electric cars division to boost profits.

Renault has already moderately discounted its Megane model, leading to a jump in sales last month.

Having written about businesses in the media and now advising companies on the media, it is clear we live in a time when firms are desperate to ensure they have full control of the spotlight and making sure it is primarily aimed elsewhere.

They will want the media to cover positive stories but approaches from journalists on broader topics that stray ever so slightly from the key messages they have developed will see them run a mile despite the importance of building relationships with the media in the good times and the bad.

That is where the CBI steps in. It has for years been the “voice” of business. Members pay their fees safe in the knowledge that if a pesky journalist calls them up, they can fob them off to a trade body.

“Oh, you want to discuss the price of eggs?” A supermarket could tell a journalist. “You need the poultry council or the eggs association,” they might say,

undecided on who to call first.

Associations are everywhere and businesses love them because it outsources tricky situations around policy.

If Brexit taught us anything, an individual business clashing with the Conservative governments of the past decade is just not worth the hassle. Covering the retail sector at the time, it was clear virtually all businesses were proRemain but when trying to get any of them to speak on the record, they all declined as they were worried about the backlash.

On the Brexit issue, the CBI played the fall guy. It was highly vocal in its opposition to Brexit – representing the vast majority of its members – and UK businesses generally – who thought Brexit would be a disaster for trade and jobs.

Businesses continue to rely on trade bodies because they have seen it is a helpful foil and worth the fee.

To give a recent example, you may have noticed none of the big energy companies have been quoted on the new Ofgem rules on force fitting pre-pay meters in homes struggling with their bills.

Instead, the trade body Energy UK is rolled out. The banking sector, retailers, hospitality, property, insurance – they all fall back on their trade bodies.

As a result, it is unlikely that individ-

ual firms will cut ties with the CBI and prefer to stay quiet and hope the saga is resolved quickly. Other trade bodies may quit, but individual businesses will probably stay put.

The CBI has made faults in its communication strategy along the way in this scandal.

Brian McBride, the CBI President waited far too long to put himself up for interview and face proper scrutiny, the selection process for a new chief executive should have been public and not done behind closed doors and losing access to ministers in Whitehall will definitely hurt.

But, ultimately, the organisation will survive because members will shrug their shoulders and do what businesses do more and more - keep their heads down and hope the media will get bored.

The outrage will continue - lots of Brexiteers have long memories and resent the pushback the CBI gave during the Brexit referendum.

But loud noise from a vocal minority won't be enough to make the CBI disappear whilst the subscriptions are still being paid.

£ Simon Neville is Media Strategy and Content Director at SEC Newgate, he was formerly City Editor at Press Association

Rishi Sunak speaking at a CBI conference

Emmanuel Macron is reported to be hatching a plan with China to try and put an end to the war in Ukraine, according to Bloomberg. The French President has upped his diplomatic mission as domestic politics turns on him.

WINE-DOWN WEDNESDAY

Wine without the snobbery, by

Libby Brodie

ECO FRIENDLY WINE FOR EARTH DAY

Boxed wine might remind you of your university days, but hear me out: it’s loads better for the environment and tastes pretty good, too.

We’re all becoming more aware of our environmental footprint and any wine producer not creating wines in an ecofriendly way is really falling behind the times. Gen Z in particular want to know where their wine comes from and how it’s made, and they’re proving it with their pounds. With Earth Day on Saturday I thought I would put together some ideas on how to drink more sustainably.

One way to drastically reduce your carbon footprint is to look at your wine’s packaging. Yes, a glass bottle is attractive, and alternative options don’t tend to work well for long term cellaring, but most wine is released when it is meant to be drunk so if you plan on sipping soon, consider wines in boxes or cans.

Bag-in-box wine has come a long way from the bargain basement booze of old. On a recent trip to France, I was surprised to see a restaurant serving only boxed wine, pouring it into a carafe for the table. If it’s good enough for the French, it’s certainly good enough for me, plus I do enjoy the convenience of a box.

I regularly pop out an attractive box from companies like Laylo or the BIB Wine Company at a play date or picnic and people can help themselves, pouring from the handy tap on the side,

WINE RECOMMENDATIONS

DOMAINE BOUSQUET GAIA ORGANIC MALBEC

2019 £16.99

WAITROSE

Fittingly named for the Greek Goddess of Earth, this B-corp Argentine producer has been organic since 2001 and is one of only four wineries in the world to have Regenerative Organic Certified status. A deliciously ripe classic Malbec.

LAYLO SAUVIGNON BLANC

£34.99

WWW.DRINKLAYLO.COM

100% recyclable and generating 90% less carbon than a bottle but containing the wine of three. This is not only one of the most beautiful boxes I have ever seen but the wine, a crisp fresh sophisticated French Sauvignon Blanc, is delicious too.

MIRABEAU PURE CÔTES DE PROVENCE ROSÉ

£15.99

WAITROSE

This elegant rosé just got a facelift with a stylish new bottle that has been purposely designed to be reused as a vase or water bottle for the table. It has already won an award for its look but luckily the wine itself is also lovely springtime sipping.

ROBERTO VOERZIO NEBBIOLO LANGHE  ‘DISANFRANCESCO’

2020 £23.17

JUSTERINI & BROOKS

I did a double-take at the price because this wine is exceptional quality. Silky fruit, refined tannins and an enveloping perfume of wildflowers. If you like your Barolo, do yourself a favour and try this wine. If you can wait this would age at least a decade.

which takes some pressure off as the host. Cans have also come a long way, and these are handy for the handbag or if you want a smaller serving. One can is two small glasses of wine.

I even have a friend who buys wines in cans so she can split them over dinner, enjoying a white with one course and a red with another, giving her options for wine pairing without opening multiple bottles. These formats are lighter to transport, take less energy to make and can be largely recycled. Look to fresh, zippy, fruit-forward styles of wine whether red, white or rosé if you’re looking to buy canned.

If only glass will do, opt for lighter weight bottles, or ones without foil at the top. Historically this foil was protective but now it’s more of a branding exercise, so it’s greener to go without.

There are other ways to drink wine and think about being good to the planet. Majestic have teamed up with the Portuguese Cork Association to host the UK’s first ever cork harvest for the Eden Project, so collect up all your natural corks and drop them off at any store near you.

Finally, the benefits of buying your produce locally are huge. By drinking more English and Welsh wine we are supporting smaller independents, the local community and we are also drastically reducing the negative impact associated with transport.

With so many excellent British producers, there has never been a tastier way to help the planet.

PIERRE GIMONNET ET FILS MILLESIME DE COLLECTION VIELLES VIGNES

DE CHARDONNAY 2008

£220

THE FINEST BUBBLE

One of the most exquisite grower champagnes I have drunk for a long time. A generous bottle of real depth and class with a beautiful balance and long nutty finish. It also only comes in magnum, perfect for slow thoughtful aging – and it shows.

AGLASS OF WINE WITH: Surfer and Small Things wine-in-a-can creator Ian Batt

One day surfing at the beach, Australian winemaker Ian Batt realised wine wasn’t reflecting his lifestyle or ethos. He is now on a mission to upgrade canned wine’s image with his range of well-crafted, first-class wines launching in the UK next month.

WHAT INSPIRED YOU CREATE SMALL THINGS WINE?

I created a premium wine in can so it would better fit in with our outdoors lifestyle

and adventures, at the same time contributing to looking after our unique part of the planet, beautiful Margaret River, by using infinitely recyclable, sustainable packaging.

WHAT ARE THE PROS OF WINE IN A CAN?

It’s convenient. If you want a glass and not to open a bottle, and it’s better for the

environment. Cans reduce your CO2 footprint by 80 per cent compared to wine in glass. Cans use less energy to manufacture, transport, chill and recycle.

ANY CONS?

You’d be surprised how easy it is to drink more than one!

WHICH IS YOUR FAVOURITE FROM THE RANGE?

The Chardonnay. Margaret river is well known for producing premium wine and Chardonnay is incredibly well made there. I think ours is pretty good too.

WHICH WINE ARE YOU DRINKING RIGHT NOW?

In general, I’m loving wines from Etna Rosso but for most of summer in Oz it’s been Pinot Noir and aromatic whites like Riesling from Frankland River in Western Australia``````.

WHICH IS YOUR FAVOURITE WINE BAR IN LONDON?

From the unassuming front door, you wouldn’t expect The Black Book in Soho was once an exclusive members club. The basement feel is perfect for when you want to escape the rush of Soho. Ask to see the famous black book for an amazing array of wines.

WHICH IS YOUR FAVOURITE RESTAURANT IN LONDON?

10 Greek Street in Soho. It’s a small and intimate, deli style kitchen. It’s authentic, with great service and great food. Owner Luke Wilson has nailed it all, from the vibe to the menu and the wine list.

WHICH IS YOUR FAVOURITE PLACE FOR A LATE-NIGHT DRINK IN LONDON?

Soho House. I was taken there by a friend and was blown away by the multiple levels where you can chill, order food and drink late into the night! It’s a destination in itself.

From bringing out a box to drinking local, there are plenty of options for the environmentally conscious wine connoisseur

PLAT DU JOUR: SEABASS AGUACHILE BY YAHIR GONZALEZ

£ A quarter of a cucumber

£ 2 small eggs, beaten

TO GARNISH

£ Bronze fennel and sea fennel

£ Sea salt flakes

£ Extra virgin olive oil

METHOD

Aguachile – literally ‘chilli water’ – comes from the north-west region of Mexico. Traditionally made with shrimp, it works equally well with fish such as seabass.

Before the advent of food processors, the sauce would have been made with a molcajete – the Mexican version of a pestle and mortar.

This dish uses fragrant bronze fennel and sea fennel, but if you can’t find these herbs you can substitute dill.

INGREDIENTS (SERVES 2)

£ 2 medium shallots

£ 4 green jalapeño chillies

£ 6 limes, juiced

£ 1 whole sea bass, to yield 400-600 grams of meat

£ Half a head of fennel

£ First make the aguachile by blending the shallots, jalapeño and lime juice in a food processor for one minute, then strain through a fine mesh.

£ Skin and fillet the sea bass and cut into 2cm pieces. For the garnish, slice the fennel thinly and keep in iced water until needed. Cut the cucumber in half, remove the seeds and dice in small cubes. Keep cold in iced water until needed.

£ To serve, marinate the sea bass with the aguachile and leave for a couple of minutes, then place the fish and a little of the juice on the plates. arrange the sliced fennel, cucumber and fresh herbs on top, and finish with the sea salt and olive oil to taste.

£ Serve with crispy tortilla chips

£ Yahir Gonzalez is chef patron at Zapote restaurant on Leonard Street –for more information go to zapote.co.uk

MAYFAIR’S SEXY FISH HAS A NEW LUNCH MENU

Sexy Fish is the restaurant that launched a thousand Sidebar of Shame articles. The Richard Caring outfit, decked out in Damien Hirst and Frank Gehry, launched in 2015 with the mission to become the place be spotted on a Friday evening before you tumble over to Annabel’s.

The sticky-glazed menu was the stuff of nouveau riche wet dreams, taking the Nobu template and zhuzhing it up to eleven. With a new ‘Kuikku’ –‘quick’ –lunch menu, it hopes to woo the Mayfair set on weekday afternoons as well as weekend nights.

The shortened menu lets you choose five dishes (including a dessert) for £38, with chef director Bjoern Weissgerber prioritising quick, healthy (ish), high protein options, such as green dragon maki or salmon nigiri. Veggie options include things like asparagus and aubergine, pumpkin tempura and crispy tofu, although there’s a “Pleasure Island” section should you wish to have lobster and shiso butter or wagyu steak.

Look past all the maximalist branding and you’ll find food that’s actually well sourced and well put together. So is this the new ‘it’ restaurant for the lunch crowd? Well, Patsy Kensit was lounging in a booth when we were there, so maybe?

LOADS OF LIQUEUR: THE MARKET FOR OLD BOOZE

Auctions for vintage wines and whiskies are nothing new, nor are record-breaking prices for rare bottles. But the ongoing interest in cocktails, which only grew as people mixed their own drinks during the lockdown, has boosted a burgeoning market for vintage liqueurs, and for the savvy buyer there are bargains to be had.

Home-mixologists and high-end bars alike are turning to auction sites to source decades-old bottles of everything from Amaretto to Zwack.

Aside from the novelty of “drinking history”, there are subtle differences between old and new liqueurs.

For some enthusiasts, vintage liqueurs offer an opportunity to sample cocktails as they may have tasted in the past. For instance, in the 2006 film Casino Royale, James Bond orders a martini specifying, “Three measures of Gordon’s, one of vodka, half a measure of Kina Lillet, shake it over ice, and then add a thin slice of lemon peel.”

Unfortunately for anyone wanting to recreate this drink, following pressure to reduce its quinine content, Kina Lillet was discontinued in 1986. Lillet

Blanc with a dash of bitters might be a reasonable substitute, but for those wanting to try the real thing, specialist auction sites offer the best hope of finding an elusive bottle of Kina.

The market for such products is dynamic, and there can be significant differences in prices from month-tomonth if, for example, a new cocktail bar is opening and looking to bulk-purchase old stock.

CLASSIC NEGRONI

The negroni’s simple recipe – equal parts gin, sweet red vermouth, and Campari –made it a favourite of amateur bartenders during the pandemic, and enthusiasm for the bittersweet cocktail remains strong.

Campari is the only component of the drink for which the International Bartenders Association specifies a particular brand, and it is of particular interest to people seeking old liqueurs, as the alcohol content has varied over time and between regions, and the ingredients have changed as well.

For instance, its vibrant red colour used to be achieved through the use of carmine, a dye derived from crushing cochineal, a parasitic scale insect that feeds on cacti. However, since 2006 this

has been replaced with colouring that isn’t derived from animals. Anyone who still wants to sample some carmine can simply eat a red M&M, but if they want to experience it in a heavier, richer Campari, they should seek out an old bottle online.

“Whether you’re looking to invest in an old bottle to keep, or to use in vintage classic cocktails, the best value comes from looking for unfashionable liqueurs that are not as popular as they were in our parents’ day,” says Isabel Graham-Yooll, auction director for online platform whisky.auction.

“Old kummel and kirsch for instance can currently sell for less than their modern-day equivalents. Famous brands such as Benedictine or Drambuie can also still be marvellously affordable at auction. You heard it here first. Their day will come again!”

£ For more information go to whisky.auction

When old liqueurs and spirits go out of production, prices can rocket. Simon Thomson dives right in.

Healthy and summery, this seabass dish is simple to make and full of flavour –a dinner party hit

The negroni’s simple recipe made it a favourite of amateur bartenders during the pandemic

THE PUNTER

Wally Pyrah previews today’s card from Happy Valley

Star should reward Lui’s patience with a Meaningful win

BANK on trainer Francis Lui to continue his welcome change of fortune when he saddles topweight MEANINGFUL STAR in the Yau Ma Tei Handicap (12.45pm), over the extended mile at Happy Valley today.

With legendry stable star Golden Sixty destined to line-up in the Champions Mile on FWD Champions Day at the end of the month, the 64-year-old trainer must have breathed a huge sigh of relief when a winning double at Sha Tin on Sunday snapped a sequence of 46 losers stretching back to the middle of March.

Lui’s stable have half-a-dozen runners

lined-up on the nine-race programme and will surely fancy their chances of adding to their already impressive tally of 22 wins – second only to Caspar Fownes in the winners’ list at the Valley – on the day.

Success for course and distance specialist Meaningful Star would be a huge feather in the cap for Lui, who has had his patience tested, following the sixyear-old’s leg injury after winning at the Valley back in February 2022.

The son of Pivotal was side-lined for nearly 10 months before appearing in trackwork last December, but since then his progress has been exemplary. A series of trials were all encouraging,

and it was only lack of condition that showed in the closing stages when a close-up seventh on his first run back in a competitive handicap last month. He has subsequently progressed again, when just losing out in a photo to useful handicapper Zone D under a fortnight ago, with principle rival Star Contact just behind in third.

Jockey Vincent Ho, who has enjoyed a fruitful partnership with Lui for many years and has already ridden 22 winners for the stable this season, is back on board again, having ridden Meaningful Star to victory back in 2021. Track-work watchers were purring with the condition of the chestnut geld-

ing when he did his final gallop on Monday, and it will be disappointing if he doesn’t go close to winning.

Later in the card, watch out for JUNE PLANET whose lack of experience cost him plenty when a disappointing fourth over seven furlongs at Sha Tin earlier this month.

Caspar Fownes’ son of Not A Single Doubt, who was an expensive purchase and is related to the stable’s Group One winning middle distance performer Southern Legend, was all over the place before running on strongly in the closing stages at Sha Tin, in what was only the third race of his Hong Kong career.

The step up in distance is a major

Meaningful Star was a winner at Happy Valley last season

boost to his chances when he lines up in the Hong Kong Rugby Union Cup Handicap (2.15pm) over the extended mile.

The opposition looks distinctly average, with last start winner Right As Rain probably better over further, while the likes of unpredictable Viva Popcorn and serial place-getter Happy Angel find it hard to get their heads in front.

POINTERS

Meaningful Star 12.45pm Happy Valley June Planet 2.45pm Happy Valley

Glory awaits Shum and Purton with well-drawn Bo Bo

IT WAS good to see trainer Danny Shum and jockey Zac Purton all smiles again when they greeted one another in the winners’ circle following Victor The Winner’s success at Sha Tin last Sunday.

Once upon a time, Shum and Purton were the go-to combination to follow for racegoers in Hong Kong, with plenty of success over the years. This season hasn’t been the same,

with the reigning champion jockey only teaming up with Shum on 32 occasions, although his record when doing so still reads pretty well with five wins and 12 places along the way.

Obviously, the Zac-Man has plenty of other options nowadays, but you have a feeling someone’s nose was put out of joint earlier in the season, and the relationship is just

finding its feet again. With Shum consistently firing in winners over the past six weeks, Purton has opted to ride a couple of the stable’s gallopers, Exuberant, who drops down to his last winning rating in division two of the Mong Kok Handicap (1.45pm) over six furlongs, and notably GLORY BO BO This son of prolific sire Deep Field has been hindered by a series of

double-figure or awkward draws in his first season of racing, but finally gets his chance to shine from the inside draw in division one of the Mong Kok Handcap (1.15pm) over six furlongs.

You can ignore his latest effort when drawn wide and impeded at the start over the five furlongs last month, but his previous form is encouraging.

He was placed behind King Eccellente over the course and distance in January, and previously chased home speedster Superb Capitalist at Sha Tin, which is form that reads well against this company, and he should be hard to beat.

POINTERS

Glory Bo Bo 1.15pm Happy Valley

Diamond ready to save Warriors if current buyers miss deadline

FORMER Worcester Warriors boss Steve Diamond stands ready to rescue the financially stricken rugby club amid growing uncertainty over whether the Atlas consortium will meet a looming deadline to complete their purchase.

Sources close to the situation told City A.M. that Diamond and previous Worcester Warriors sponsor Adam Hewitt maintain their interest in the club, which went into administration early this season, but that they would need a month to mobilise their plan to begin next season in the Championship.

Atlas, the group led by former Worcester chief executive Jim O’Toole and ex-pro James Sandford, exchanged contracts with Worcester’s administrators Begbies Traynor on 1 February that reportedly gave them a 90-day window for the purchase to be completed.

That would make Atlas’ deadline 2 May, just two weeks away. Sandford said in February that his group would complete the deal on time. However, Atlas remains at odds with the Rugby Football Union over what the future of the club looks like.

Atlas plans to merge Worcester with local side Stourbridge, who were recently relegated to the fifth tier of English rugby, and work their way back to elite level. The RFU, however, have said that proposal – which they are yet to

formally receive – would need to see the club start in the 10th tier of English rugby, with current rules in place to stop consortiums buying a place in a given league.

With the deadline fast approaching for the deal to be completed, the silence around the deal has led to growing uncertainty as to whether it will go through at all.

One source told City A.M. that at least one member of the Atlas consortium thinks the “RFU regulations should apply to everyone but Atlas” and that “the RFU keeps giving [them] more rope and [they] keep hanging [themselves]” in terms of their poor communication with fans.

The RFU is understood to be unaware of any deadline as it is a mat-

Steve Diamond is currently employed by Edinburgh

ter for the administrators and buyers but would need to approve any proposed merger between Stourbridge and Worcester should that be the path Atlas go down.

Questions remain over whether any group led by Diamond – now lead rugby consultant at Edinburgh – could realistically see Worcester return to the Championship in time for the 2023-24 season, given the deadline for that route officially passed weeks ago.

The club was placed into administration in the early part of the season, with fellow Premiership club Wasps.

CROWD FUNDING Man City submit plans for £300m Etihad upgrade

Premier League champions Manchester City have formally submitted a planning application for a £300m upgrade of their Etihad Stadium that would take capacity to more than 60,000. The improvements are centred on the North Stand, which is to get an enlarged upper tier and will connect to a new complex featuring a hotel, “sky bar” overlooking the pitch, club shop and museum. They come as Abu Dhabi-owned City prepare to mark 20 years at the stadium, originally built for the Manchester 2002 Commonwealth Games. An increase in capacity from its current 53,500 could see the Etihad Stadium overtake Arsenal’s 60,700seater Emirates Stadium as England’s fourth biggest football ground.

FOOTBALL

Guardiola: ‘City future remains undecided’

MATT HARDY

MANCHESTER City manager Pep Guardiola says his future with the Premier League champions remains undecided ahead of their Champions League quarter-final second leg against Bayern Munich this evening.

Guardiola’s side lead Bayern 3-0 having blown the German champions away when they visited the Etihad Stadium last week.

“There are talks in the background,” said the 52-year-old, who is in his seventh season at City.

“I think it’s normal. But without going into too much detail, there’s

NFL’s Hamlin returns to training after cardiac arrest in January

MATT HARDY

AMERICAN Football player Damar Hamlin has been cleared to return to the field less than four months after he suffered a cardiac arrest during an NFL game.

The 25-year-old Buffalo Bills safety suffered the heart issue during a match his team was playing against the Cincinnati Bengals in the first week of 2023.

He has returned to the franchise’s voluntary off-season workouts this week, just a couple of months after the cardiac arrest.

“He’s seen three additional specialists [in the off-season], most

recently on Friday, and they’re all in agreement, it’s not two to one or three to one or anything like that,” said Buffalo Bills’ general manager Brandon Beane.

“They’re all in lockstep of what this was and that he is cleared, resumed full activity, he is just like anyone else who is coming from an injury or whatever.

“So he is fully cleared, he’s here, and he is of the mindset, he’s in a great headspace to come back and make his return.”

The NFL season does not begin until September so there is ample time to ensure a gradual return to play for Hamlin.

nothing decided yet so the talks continue.”

Guardiola joined City ahead of the 2016-17 season from tonight’s opponents Bayern.

Since then he has led his side to four Premier League titles, an FA Cup, four League Cup titles and two Community Shields. He has failed, however, to win the Champions League despite getting to the final in 2021.

“It’s about finding the balance,” Guardiola added

when asked about approaching tonight’s second leg in Munich. “We want to play our style, we have to be clinical.

“Everything’s possible.

“This competition is special, we are taking it very seriously and know that we’re playing against one of the best teams in Europe.”

City can still achieve the treble of the Champions League, FA Cup and Premier League.

Snooker protestors should be jailed for theft, says Hearn

MATT HARDY

WORLD Snooker chairman Barry Hearn has accused protestors who disrupted the World Championships this week of committing a “form of theft”.

Two environmental activists caused chaos on Monday night in the first round of the championships at the Crucible Theatre in Sheffield, with one of them mounting the table before discharging orange powder – leaving the table needing to be reclothed.

“In my mind, it didn’t do their cause anything but harm,” Hearn said.

“They’re just disruptive and when protest is so disruptive that it stops

people getting value for money and having bought tickets, they are robbed of that opportunity. It is a form of theft.”

A 25-year-old man and 52-year-old woman were arrested on suspicion of criminal damage over the incident. They were released on bail yesterday.

Hearn added: “Sport’s an easy target. Aintree we saw on Saturday… How long before The Open or Wimbledon or whatever?

“We’re such a soft touch as a nation – smack their wrists, give them a small fine, maybe a bit of community hours, maybe a month in prison.

“Custodial sentences is my way. I’m a zero-tolerance type of guy.”

SNOOKER

MATT HARDY

HEARD the one about the historically European sports property turbo-charged by Middle Eastern sovereign wealth and now in the crosshairs of serial sports investors from the United States?

This isn’t football, though, but padel, the fast-growing racket sport now at the centre of a tug of war between rival competitions backed by the Qatari owners of Paris Saint-Germain, the New York Yankees, world famous former tennis stars and the makers of Estrella Damm beer.

Like the battle for supremacy between the PGA Tour and Saudibankrolled LIV Golf, the story of padel offers a snapshot of forces shaping the sports industry in 2023.

It also poses questions about whether multiple leagues – and, given the US craze for pickleball, sports – can coexist or will ultimately eat each other.

Since springing out of Mexico in the 1970s, padel has mostly been an amateur pursuit played in Spanish-speaking countries, while its main professional circuit, the World Padel Tour, started as a marketing exercise for the Damm brewery in Barcelona.

That all changed a year ago when Qatar Sports Investments launched Premier Padel, a high-profile new global tour offering much higher prize money to top pros, many of whom were keen to break their exclusive contracts with the WPT and jump ship.

QSI, which has grown PSG from a €100m business to one valued at €4bn (£3.5bn) in a decade, had spotted the potential of padel, which was growing quickly in Europe, not least among the football fraternity, where Zinedine Zidane and Pep Guardiola are among its devotees. Premier Padel began last year against a backdrop of legal wrangling between players and the WPT, but across the Atlantic other seasoned investors were drawing up their own plans to claim a piece of the sport.

NEW US ENTRANTS

One of those is Pro Padel League, a new team-based competition with outfits from Canada and Mexico as well as the US, whose inaugural season will feature British No1 Tia Norton and run from May to June.

Investors in the seven franchises include the Maloof family, who have owned teams in the NBA and NHL, and former tennis world No2 Tommy Haas. Fellow ex-player Juan Martin del Potro, meanwhile, is an advisor to the Miami team.

“The professional sports league is a North American phenomenon,” says co-founder Keith Stein. “It’s probably more prevalent in the US than in any other part of the world, and padel lends itself to a league.”

Business partner Marcos del Pilar says Pro Padel League is “an opportunity for big investors all over the world to be part of the next trend. If you put together the growth of padel worldwide with the franchise model which has proved to be very successful, we can start attracting investors and venture capital groups.”

The other prominent US-based project in the sport is A1 Padel, which is backed by the Steinbrenner family, owners of baseball’s New York Yankees.

Launched as the American Padel Tour in 2020 but curtailed by the pandemic, it has rebranded and relaunched for 2023 with 19 events

PADEL’S ARMS RACE

more appeal to spectators and broadcasters.

He warns that pickleball must not be allowed “to suck up all the oxygen in North America”, but business partner Del Pilar is more diplomatic, seeing it as a potential gateway to padel’s wider adoption: “Pickleball is opening up another opportunity for racket sports in the US to succeed.”

Another issue created by the US push is that padel has suddenly gone from having one pro circuit, the WPT, to four. That has already led to wrestling over top male players between the WPT and Premier Padel, and further tours only further muddy the waters.

For players, an influx of investment in the sport and increased earning opportunities are naturally welcome, but the trade-off is a fragmented ecosystem which makes it difficult to have a joined-up ranking system – or even remember where you’re playing next week, says Norton.

“At the moment there are lots of different group chats of players basically complaining about what’s happening,” the British No1 says. “We don’t want to worry about the politics.

“I think it should be done like tennis – all the tournaments they play go towards one world ranking. I’m hoping

30,000

running from February to December in Africa and Europe as well as the US.

A1’s strategy is to grow participation across America, thus ultimately creating more talent to play on its circuit in future.

“Everywhere I travel, I see padel courts being developed. You start to see the trend,” says Ike Franco, chairman of Infinity Global, shareholder in the Yankees and, since last year, partner of A1 Padel. “This is going to surpass tennis very quickly.”

It’s not just in the competitive arena where padel is seeing a flood of investment in the US. Last year, New York’s first dedicated club, Padel Haus, opened its doors in Williamsburg, Brooklyn.

The upmarket venue was set up by UBS banker-turned-restaurateur Santiago Gomez, who sold his award-winning eatery Cosme to set up the venture and has ambitions to spear-

head its growth in America.

Membership costs close to $2,000 a year before court fees, but it has proved such a hit that Padel Haus has already signed a lease for a 24,000 sq ft warehouse in the Dumbo district to become its next club by this summer. More venues are planned.

“We have witnessed in just nine months the popularity of padel to New Yorkers, with waiting lists and a surge in demand to play this distinctive racket sport,” said Gomez.

“There is tremendous room for padel to grow across what is the largest sports market in the world.”

Says A1 Padel partner Franco: “It’s interesting to see how the sport has evolved in Europe.

“Really the juggernaut is when it takes off in the States. There are 30,000 courts in Europe. There’s 100 in the US.

My prediction is that there will be 5,000-10,000 minimum.”

IN A PICKLE

The US padel explosion faces a number of challenges, however, not least from pickleball, another sibling of tennis played on a smaller court which has attracted investment from sporting superstars Tom Brady and Franco believes padel has more enduring appeal than its rival and will ultimately usurp it. “To me pickleball is ping pong on steroids,” he says.

“Padel is a real sport; pickleball is a game.”

Pro Padel boss Stein also argues that padel will prevail because it is “more high-octane, cooler, sexier” and has

in the end it’ll settle down to be, maybe not one circuit, but a couple instead of, like, five at the moment.”

TOP OF THE PYRAMID

There seems to be broad consensus that the current landscape is unsustainable, and a potential merger between Premier Padel and the WPT could be the first major streamlining step, with the warring parties confirming talks in January.

Last month, the Qatar-owned circuit also secured the participation of the world’s leading female players, after protracted negotiations. With worldwide TV contracts in place, the new tour is likely to be in a very strong position by the end of 2023.

Pro Padel League’s organisers say more tournaments are necessary to cater to the growing number of players but insist they are not in direct competition with Premier Padel for the elite.

“The WPT or Premier Padel will be the top of the pyramid and we are focusing on a different stage of the sport for different players,” says Del Pilar.

On a possible domestic rivalry with A1 Padel, Del Pilar adds: “Our vision is a joint vision. Instead of creating drama or division I think there is room for everyone to succeed.”

A1’s Franco argues that a rising tide will lift all boats but, drawing parallels with American football, concedes that in time only the strongest circuit may survive. “There is room for more than one league – all US sports had multiple leagues. Leagues merge after a while. Eventually, the NFL and [rival] AFL merged,” he says.

“I think right now there is a difference of opinion about how to build a league. Premier Padel is doing it the way they feel is best and Fabrice [Pastor, A1 founder] has his principled way of thinking. A1 Padel will be the next important league. Does that mean we don’t want others to succeed? No. We want them to succeed. In sport, eventually the best play each other.”

Qatar seemed to have sewn up the sport. Now the US wants in, writes Frank Dalleres

It’s interesting to see its evolution. The juggernaut is when it takes off in the States

British No1 Tia Norton

Number of padel courts in Europe. The US currently has around 100