Monday 14 August 2023

LONDON’S BUSINESS NEWSPAPER

LONDON STILL AHEAD OF UK GROWTHRATE

CAPITAL HAS AVOIDED WORST OF ECONOMIC PAIN –SO FAR

CHARLIE CONCHIE

LONDON’s economy has continued to outpace every other region in the country even as rising interest rates and recessionary fears drag on growth across the UK, a closely watched survey has revealed.

Growth in London slowed in July as the Bank of England’s rate cycle eats away at spending power but the capital remained well ahead of the UK in the speed of its economic growth, according to Natwest’s London PMI Business Activity Index released today.

London’s index reading came in at 52.3 for the month, putting it comfortably above the contraction that has gripped most of the UK. The West Midlands was the only other region to

notch an expansion last month.

London’s latest print did mark a third monthly slowdown, however, with growth falling from 56 the previous month. Analysts at Natwest warned that rapid rate hikes by the Bank of England were also likely to dent growth further in the months ahead.

“July data seems to have confirmed the trend that appeared during the second quarter, namely that the London economy has lost steam as rising interest rates take their toll on spending and activity,” said Catherine van Weenen, Natwest regional director for London and the South East.

The UK on the whole notched its first decline in new orders across the UK since January, and slowdowns in both London and the West Midlands could

signal they will “join the rest of the country in contraction territory soon”, she added.

Demand is expected to dampen again in August after Threadneedle Street moved to ramp up interest rates for a 14th straight time earlier this month to tame stubborn inflation.

UK borrowing costs now stand at 5.25 per cent, their highest since March 2008, extending the Bank’s toughest tightening cycle since the 1980s. City analysts are predicting that rates in the UK will peak at between 5.75 and six per cent.

Resilient growth in London in July also came despite businesses in the capital feeling the pinch of rising costs harder than any other region.

Natwest’s prices index ticked up to 69.5 during July, signalling a faster pace of cost inflation faced by firms in London.

Wage pressures appeared to be driving up costs fastest in the capital, Natwest said.

IT’S MURDER OF THE DANCEFLOOR

JAMES SILVER

THE UK’s largest nightclub operator has warned that Brits are cutting back on nights out as a tougher economic climate eats into budgets.

Peter Marks, chairman of Rekom UK which runs a host of nightclubs across the UK and northern Europe, told PA Media that whilst average spend was holding up, Brits were going ‘out out’ less regularly.

“We have people enjoying similar

nights out but going less often because they have had to take a second look at their budgets.”

He added: “You have to feel sorry in particular for students.

“Having had their studies disrupted by Covid-19, a return to normality should be what they were looking forward to.

“To then face a cost of living crisis and huge inflationary pressures when it’s ‘their time’ as young adults, is a real kick in the teeth.”

Fintechs go to war with big lenders over feet dragging on open banking

CHARLIE CONCHIE

FINTECH policy chiefs and entrepreneurs have called for the government to expand open banking provisions and unleash a financial data revolution, warning big banks will need to be compelled to open their books.

With stakeholders consulting on the next stages of open banking, many in the sector have suggested regulators need to be bold in expanding data sharing rules into new financial products.

Many products are currently outside the frameworks for data sharing, which has mainly focused

on current accounts.

Open banking allows consumers to ‘plug in’ their data to services which can use technology to find them a better deal.

“Unless we systematically expand open banking, our citizens and small businesses will miss out on opportunities to access and control

their financial data to improve financial health, productivity and sustainable growth,” Adam Jackson, director of policy at Innovate Finance –the fintech trade body –told City A.M.

“These banks are hiding information from their own customers – purely for profit. It’s

data protectionism on a colossal scale,” fintech firm Cardeo’s boss Gavin Shuker told City A.M.

Many lenders did not reply to a request for comment; however, Barclays said they “actively participate” in the open banking ecosystem and followed all regulatory requirements.

NO BLUES IN NASHVILLE TENNESSEE’S MUSICAL HUB IS HAVING ITS MOMENT P16-17

VOTE BLUE, GO GREEN? WHY ECO-TORIES WILL STRUGGLE TO BUILD SUPPORT IN 2023 P14

STANDING

Takeaway pints are cause for optimism that deregulation is still on the table

STREET drinkers of the world, unite, as Karl Marx almost said. In what may be his most popular move since becoming Prime Minister, Rishi Sunak has personally intervened to ensure that the takeaway pint –lockdown’s only obvious benefit –will remain an option for thirsty, and sun-starved punters. It’s a small measure, but it has a tangible benefit.

Britain has a problem with big policy areas, as we know: our infrastructure is creaking, obviously unfit services like the NHS are allowed to hobble on, and the entire political class appears completely ignorant of the implications of an ageing population. HS2, for instance, has turned into such a farce that last week a process to bury diggers –

THE CITY VIEW

genuinely –began, lest at some point in the future ministers decide that they do in fact want the line to run all the way into Euston, rather than ending at famed metropolitan terminus Old Oak Common.

But we have an issue with small things, too. Speak to individual industries across the country and they’ll all have a story about how government makes their life harder. Luxury retail and the hotel trade has the revocation of tax-free shopping. English wine producers have cellar door relief. Financial institutions, too, can point to

petrol tanks Filling

TAKING A PUNT Tourists in Cambridge enjoy a cruise down the River Cam

small own-goals that the government seems insistent on scoring, holding back British competitiveness. Whilst tax policy features highly on lists of these self-inflicted wounds, so too does the bureaucracy of regulation. In the immediate aftermath of Brexit, there was much talk of a bonfire of red tape –which, to be honest, wasn’t particularly desired by either small or large businesses. But there was an enthusiasm for tweaking, here and there, small victories adding up to a significant win for the UK economy. Such a push for regulatory improvements seems a distant memory, now; the mood music in Westminster is already dominated by a coming election. The business secretary, Kemi Badenoch, could do worse than re-energise that drive.

bp’s wider transformation is underway. Whilst today we’re mostly in oil & gas, we’ve increased global investment into our lower carbon & other transition businesses from around 3% in 2019 to around 30% last year.

A BOUT of good weather –at last –saw punters take to the River Cam in Cambridge over the weekend. And sunny climes are expected to stay, with temperatures set to hit 30C in parts of the UK this week.

Pay set to creep above inflation in new analysis

CHRIS DORRELL

CONFIRMATION that cost of living pressures are set to ease slightly will arrive this week, analysts reckon.

Official figures out tomorrow are tipped to show that wage growth hit 7.4 per cent in the three months to June on an annual basis, up from 7.3 per cent last month.

This would make it the fastest level of wage growth on record, as workers have demanded higher wages to compensate for soaring inflation.

A day later, July’s inflation data will be released with markets predicting the headline rate of inflation will fall to 6.7 per cent, from 7.9 per cent last month. The fall will primarily be driven thanks to a steep fall in energy

prices, following a 17 per cent cut to Ofgem’s energy price cap.

Core inflation is expected to remain more stubborn, with it falling ever so slightly to 6.8 per cent from 6.9 per cent last month.

Rising wage growth and falling inflation will mean workers are in line for the first increase in real wages for 18 months.

Capital Economics forecast that inflation will remain below wage growth until at least the end of 2025, although it warned that households will be feeling the pain for years to come.

While the data should be good news for households, the level of wage growth is likely to be far too strong for the Bank of England’s liking, encouraging further rate hikes.

Want a pay rise? Find an offer elsewhere

JAYNA RANA

MORE than half of London employers have made use of counteroffers in the past 12 months to try and keep staff as skills shortages persist, according to a new report.

Pubs were allowed to start selling takeaway pints under pandemic rules

Takeaway pint here to stay thanks to prime ministerial intervention

NINA LLOYD

PUBS IN England and Wales will be allowed to continue selling takeaway pints after the government decided to keep pandemic-era licensing rules. Under the relaxed regulations, businesses were able to serve customers through hatches when they

were forced to close in 2020.

The rules were due to expire in September but Rishi Sunak is said to have decided to enable them to continue, the Sun on Sunday reported.

The Prime Minister said: “I’ve heard the British pub industry loud and clear – takeaway pints are a boost for their businesses and our economy.”

According to the CIPD’s quarterly Labour Market Outlook, 40 per cent of UK employers have made a salary counteroffer to retain staff over the past year, with 38 per cent within that matching salary offers and 40 per cent beating them.

This is most prevalent in the capital, however, as 58 per cent of London-based employers have made counteroffers.

Many working in private sector legal and professional services firms have seen their salaries surge over recent years, amid a battle for talent between the City’s top firms. Labour shortages and a boom in demand for legal and professional services has seen demand far outstrip supply. PA

bp’s transformation is underway – and you can see it coming to life at our retail sites across the UK. We’re providing our quality fuels to keep drivers moving today, and rolling out bp pulse chargers where people need them – including at up to 180 forecourts by the end of the year – helping with the switch to electric vehicles. And whether our customers are filling up or charging up, they can enjoy a great tasting coffee from Wild Bean Cafe at many of our sites before getting back on the road.

Increasing investment in the transition to lower carbon energy and keeping oil and gas flowing where it’s needed. That’s our strategy.

Discover

Nearly 4m working days lost to strikes in past year, says think tank

GUY TAYLOR

TALKS between government and unions to resolve ongoing industrial disputes have repeatedly faltered, despite the UK losing nearly 4m working days to strikes over the past year.

According to new research from the Resolution Foundation think tank, 3.9m working days have been lost to industrial action, higher than at any point since the 1980s. Highly unionised sectors accounted

Legal & General in the spotlight after rule change

CHARLIE CONCHIE

LEGAL & General is set to report a dent in its profit this week as a host of top insurance firms reveal the scale of a financial hit delivered by new accounting rules ushered in this year.

The London insurance giant will report its first half results tomorrow and is hoping to convince investors it can arrest a slump in its share price and refresh the buzz around its long term capital generation plan.

City analysts will also have eyes trained on the key metric of operating profit as L&G reveals the impact of new accounting rules on insurance firms. New rules introduced from January this year are expected to hamper reported profits for insurance firms in the short term.

L&G made £1.4bn in the first six months of 2022, on its way to £2.9bn for the full year. However, analysts are pricing in operating profit across the group to come in at £834m for the first six months, according to a company-

compiled consensus.

Hargreaves Lansdown analysts said this week that L&G would be among the firms “most affected” by the changes and profits would fall in the short term. “Management have been clear that the cash generated by the business will remain unchanged, as will the... priorities,” said Matt Britzman, analyst at Hargreaves Lansdown. “The key difference is that profits from the insurance business are stored in the balance sheet and released over time, causing a hit to reported profits in the short term compared to the old regime.”

The profits dent will come after a tumble in L&G’s share price over the past year, with shares trading down 18.92 per cent.

Veteran chief Sir Nigel Wilson is also set to hand over the reins. Tomorrow’s numbers will be judged in the context of his long-term plans for 20202024, in which L&G said it was targeting capital generation of £8bn to £9bn, dividend per share growth of three per cent to six per cent and earnings growth per share to outpace the dividend.

for the lion’s share of strikes, with workers in health, education, rail and the postal service responsible for 96 per cent of all walkouts.

According to the think tank, high inflation resulted in workers' average real terms pay dipping by 4.1 per cent across the board in the quarter to May, when compared with 2021. But for public sector workers, real terms pay fell as high as 9.2 per cent, with an even steeper 9.8 per cent drop for staff in health and social care.

Nye Cominetti, senior economist

NOT THE 2023 L&G INVESTORS WANTED

at the Resolution Foundation, said “the government will need to balance fiscal caution with the need to provide a level of pay for public sector workers that reflects the very real difficulties faced by workers in these sectors”.

The news follows news of further rail strikes, with the RMT on Friday announcing a wave of fresh action to hit the last week of August, with 20,000 members set to walk out. The government was approached for comment.

Aviva hoping to impress with half year update

BEN LUCAS

INVESTORS will be hoping for more progress in Aviva’s half-year report this week as the insurer’s share price continues to struggle.

This is despite a strong start to the year, with its first quarter results boosted by a 25 per cent increase in private healthcare sales to £33m as the NHS struggles with growing waiting lists and strike action.

But a 15 per cent drop in wealth net flows and unchanged full-year guidance left investors "underwhelmed", Michael Hewson, chief market analyst at CMC Markets, said.

SHARES in Legal & General dropped when Sir Nigel Wilson, the highly respected City grandee, announced his plan to transition out of executive life. Such is the power of leadership, and such is Wilson’s reputation. But even with Wilson at the helm, L&G’s share price has fallen by around a fifth this year.

Aviva, too, has a boss widely believed by the City to know what they’re doing. Since taking the top job at Aviva, Amanda Blanc has done exactly what she said she would do: focus the business on core markets and deliver shareholder value. Despite objective success, though, Aviva’s share price has also been given a bit of a tonking this year.

Boss of Volkwagen’s Seat blasts UK’s ‘dogmatic’ 2030 petrol car ban

GUY TAYLOR

THE BRITISH boss of the Volkswagenowned automakers Seat and Cupra has blasted the UK government’s 2030 ban on the sale of new petrol and diesel vehicles as inflexible “dogma”.

“I don’t think the solution is prohibition,” William Griffith, who serves as CEO of both European

marques, told the Sunday Times. “I don’t think that’s the right way to change societies.”

Griffith argued that the government would do better by convincing and motivating people to “purchase electric cars before you start to prohibit combustion [engine] cars”.

The proposed petrol and diesel car sales ban has fallen well into the UK’s

political limelight in recent weeks, after a shock Tory victory at the Uxbridge-by election was put down to Sadiq Khan’s plans to expand the ULEZ scheme across all of London.

“We shouldn’t be dogmatic about technological solutions… We should be dogmatic on the objective, that we don’t want to create emissions that damage the planet,” Griffith said.

A fair amount of this can be put down to the vagaries of this year’s economic picture. Nobody with exposure to the insurance industry has enjoyed a period of runaway cost inflation and a cost of living crisis. Most analysts believe stock market troubles this year are likely to correct in due course –Berenberg has a hold rating on L&G and a buy on Aviva, for instance.

Wilson’s successor António Simões, Santander’s European head, has some mighty shoes to fill in Wilson’s, and some impressive rivals in Blanc and Phoenix’s Andy Briggs, too.

It's share price is down 14 per cent since the start of the year. Operating profit is expected to be flat when it reports its half-year results on Wednesday.

But Aviva is expected to increase its dividend, which already yields eight per cent, Richard Hunter, head of markets at Interactive Investor, told City A.M., adding that this was a “clear invitation to income-seeking investors”.

Matt Britzman, an equity analyst at Hargreaves Lansdown, told City A.M. to expect private healthcare sales to “very much remain a hot topic given the ongoing disruptions we’re seeing in the NHS”.

“The market’s hot right now and Aviva’s been snapping up business at good margins,” he said.

Griffith said prohibition, as favoured by the likes of Just Stop Oil, was not the right course

The RMT has announced fresh industrial action for the end of August

Sir Nigel Wilson will step away soon

Victorians not to blame for water industry woes

NICHOLAS EARL

GOVERNMENT and industry claims that the UK’s problems with sewage leaks across the country are caused by the Victorian’s legacy in the water network have been challenged in a new report from anti-pollution campaigners.

Windrush Against Sewage Pollution (WASP), with the support of data analysed by consultancy group Arup, has revealed new findings that show only 12 per cent of the sewage network in England and Wales was built in the 19th century.

Instead, the majority of the network was built in the years before privatisation, with approximately a fifth constructed during the 1960s and 1970s.

It comes after environment secretary Therese Coffey, when unveiling the turnaround plan for the water industry in April earlier this year, argued that “sewage overflows stem from our principally Victorian infrastructure”. Two months later, Stuart Colville, director of

policy for trade association Water UK, told City A.M. that storm overflows were a “legacy of Victorian infrastructure”.

However, Professor Peter Hammond, data researcher for WASP, argued the new findings debunk claims that issues with outflows of raw effluent and storm water are a result of antiquated Victorian infrastructure.

“For overflows on sewage networks, there appears to be no obvious correlation between average spill rate and the proportion of Victorian sewers,” he said, with spillages more likely caused by a lack of maintenance and investment.

Water UK told City A.M. that storm overflows were occurring in the country’s older ‘combined sewers’, first designed by the Victorians, and that the report mistakenly factors in the secondary network of 450,000km of ‘separated sewers’, which are larger and newer.

A government spokesperson said: “We have launched the most ambitious plan to reduce sewage discharges in water company history.

World oil demand has reached an all-time high

Oil records seven weeks of gains amid output cuts

NICHOLAS EARL

OIL WILL begin trading today with both major benchmarks recording seven consecutive weekly gains amid growing expectations of tightening supplies following output cuts from OPEC.

Brent Crude ended last week up 0.47 per cent at $86.81 per barrel, while WTI Crude rose 0.45 per cent to

British Land in talks over offloading assets to US real estate giant: reports

JAYNA RANA

PROPERTY developer British Land is considering selling a number of its assets to US real estate group Realty Income, reports say.

The potential £300m deal would involve selling a portfolio of six London-based data centres and offices, currently leased to Vodafone, and three shopping centres,

according to the Sunday Times. Both British Land and Realty declined to comment when contacted by the paper.

Realty first entered the UK market when it entered a joint ownership with British Land of 12 Sainsbury’s supermarkets for £429m in 2019.

Since then, it has aggressively expanded its portfolio with more supermarkets, DIY stores and over 30

retail parks, totalling to more than £2bn worth of investment.

The US company, which is led by former investment banker Sumit Roy, has said previously to investors that the UK’s dense, growing population and constraints on new development make it a long-term hotspot. British Land’s data centre and office portfolio has been given a £100m price tag with bids due in this week.

$83.19 per barrel – consolidating the longest rising price streak this year.

Earlier in the week, Brent Crude prices climbed as high as $88 per barrel – their highest level since January – before easing slightly.

The International Energy Agency (IEA) has predicted a sharp decline in global inventories over the second half of 2023, with unilateral output cuts from leading OPEC member Saudi

Arabia and ally Russia totalling a further 1.5m barrels per day. This would drive prices even higher, with the IEA estimating global oil demand could scale another peak this month.

“Deepening OPEC+ supply cuts have collided with improved macroeconomic sentiment and alltime high world oil demand,” the IEA said in its latest monthly oil market report.

British Land’s Broadgate Circle development has been a runaway success

Turkish currency troubles have one clear winner: last-minute tourists

NEIL LANCEFIELD

UK HOLIDAYMAKERS are flocking to Turkey and Egypt to take advantage of favourable currency exchange rates, according to a travel company.

On The Beach said the number of bookings it has received for summer trips to those destinations is more than double the level from

John Lewis boss: Bailey wants you to be gloomier

LUKE THOMAS

THE NEW chief executive of John Lewis has given a stark warning to the Bank of England, cautioning against higher interest rates that could “tip [the UK] into recession”.

Speaking to the Mail on Sunday, Nish Kankiwala, who was appointed as the Partnership’s first chief executive in March, said: “The Bank of England wants to make people feel a bit gloomier, so they spend less, and it is working,” Kankiwala told the Mail on Sunday.

“If you look at previous booms and busts sometimes it goes too far, and we tip into recession. The trick is to avoid that. But that is for the bank. I just run shops,” he added.

Kankiwala’s comments come at a difficult time for John Lewis, which has been hit hard by the pandemic and inflationary pressures. The retailer rung up losses of £234m last year and has not awarded partners bonuses since 2019.

Kankiwala is hoping to turn around the flailing firm through the ‘Partnership Plan’ – a revival strategy devised three years ago by group chairman

Sharon White.

Kankiwala said the company was midway through the strategy, but more steps needed to be taken due to additional pressures from the cost of living crisis and rising utility bills.

He said targets, which include profits of £400m by 2025, alongside the reinstallation of partner bonuses, “will be achieved by taking out more costs.”

John Lewis has already made over 2,000 post-pandemic redundancies, with 16 shops closed. Nine Waitrose shops have also shut, with 500 job losses. However, Kankiwala said there were no more closures planned.

He said: “When the previous team did the work, their assumption on inflation was about three per cent. We have taken out £300m of costs already. This year we will probably take out £100m. In procurement, we can do better. But we want to do it sustainably, not just slash.”

The new boss also said he was predicting a significant growth in buy-now, pay-later options, which the retailer hoped to capitalise on.

“I think we will develop a buy-now-paylater product. Especially in the younger generation, people expect it,” he said.

Starmer parks nationwide Ulez plans in attempt to woo voters

GUY TAYLOR

KEIR STARMER has ditched Labour’s commitment to introduce Ulez-style clean air zones across the country, in a loss for Mayor Sadiq Khan.

According to reports, a statement supporting the rollout of clean air zones, which charge drivers whose vehicles fail to meet emissions standards, has been scrapped from the party’s policy programme.

It follows Labour’s surprise Uxbridge

by-election defeat in July, which was widely blamed on Khan’s plans to expand the controversial Ulez scheme.

However, The Telegraph reported that Labour’s statement on clear air zones had been stripped from the party’s draft policy handbook, with a Labour source subsequently confirming the policy had been officially dropped and would not feature in any future revisions.

The source said Labour was “not in favour of extra burdens on drivers during a Tory-made cost of living crisis”.

2019, before the Covid-19 pandemic and associated lockdowns.

It partly attributed this to the fall in the value of the Turkish lira and Egyptian pound against sterling over that period.

The number of lira that can be bought for a UK pound has quadrupled from around eight in 2019 to 34 currently.

Holidaymakers visiting Egypt are

receiving approximately twice as much local currency for sterling than they were before the virus crisis.

On The Beach said a sharp rise in flight capacity has also driven the rise in demand for holidays in Turkey.

Turkey was the company’s third most-booked overall destination for summer holidays.

The Canary Islands took the top spot, followed by mainland Spain.

PA

Nish Kankiwala became John Lewis’s first ever CEO in March

Video streaming market primed for more mergers

JESS JONES

MORE STREAMING mergers are “inevitable” amid an increasingly crowded market, according to experts.

With over 200 streaming services now operating globally, video on-demand providers are keen to secure their footing in a competitive market, triggering a surge in mergers and acquisitions.

Ben Barringer, equity research analyst at Quilter Cheviot, said “consolidation was always inevitable”.

“Ultimately traditional TV and film is struggling, so this will likely result in further disruption,” Barringer said.

It comes after a wave of recent consolidation activity in the industry, with the merger of HBO Max and Discovery+ in April and Paramount+’s acquisition of Showtime in June, while Disney+ plans to

spend $9bn buying out Comcast’s minority stake in Hulu in 2024.

Oscar Wall, general manager EMEA at Recurly, a subscription billing service, said the “abundance” of choice available to consumers made it “inevitable that we’ll continue to see consolidation of streaming services in the future”, as smaller streamers struggle to keep up with industry giants like Netflix, Disney+ and Amazon Prime Video.

Experts also suggested a shift in consumer behaviour could encourage consolidation, as people drop subscriptions amid the cost of living crisis. Cash-conscious consumers will be searching for “flexible subscription models to tailor to their needs, and a single package buy as opposed to utilising multiple subscriptions”, Liz Duff, head of commercial and operations at Total Media, said.

ALL EYES ON LIONESSES Over 7m tune in to watch England’s World Cup quarter-final

Daily Mail in talks with investors over potential bid for Telegraph

KANJYIK GHOSH

THE DAILY MAIL and General Trust (DMGT) has registered its interest with Lloyds for a potential bid for The Telegraph, a spokesperson told Reuters on Saturday.

However, while it has been engaging with several parties, DMGT does not yet have any formal plans and there is no consortium, the spokesperson added.

Sky News earlier reported that DMGT chairman Lord Rothermere is courting financial investors including

funds based in the Middle East to support a bid for the Telegraph newspapers.

Individual external investors would be unlikely to own more than 20 per cent of the Telegraph titles if they formed part of a consortium with the Daily Mail proprietor, the report added. Lloyds in June seized control of the parent company of the Daily Telegraph after a long-running dispute with their former owners, the Barclay family, over debts secured against the businesses.

ENGLAND’s Women’s World Cup quarter-final win was ITV’s most watched women’s football match ever, bringing in a peak of 7.2m viewers on the channel on Saturday. The match was ITV’s second biggest peak audience this year, beaten only by the Grand National.

St James’s Place slammed for ‘dog’ funds by industry-wide survey

CHARLIE CONCHIE

MONEY MANAGER St James’s Place has been slammed by an industry-wide survey over a host of poorly performing funds

The London-based firm, which manages some £157.5bn for investors, has seen four of its funds labelled as the biggest ‘dogs’ in the industry and currently manages £29.3bn in laggard funds, according to a survey compiled by investment firm Bestinvest.

Bestinvest said market turbulence had dragged more funds globally into underperformance over the past 12 months but a host of firms had consistently lagged on their peers.

Fund managers need “to perform exceedingly well just to be average,” said Jason Hollands, managing director of Bestinvest.

St James’s Place told the Telegraph it regularly monitored performance and some of the funds mentioned had new management.

Entain looks at bonus clawbacks over Turkey fine

JAYNA RANA

GAMBLING giant Entain is seeking to retrieve tens of millions in bonuses paid to former bosses after announcing it faces a more than half a billion pound fine over corruption allegations in its Turkish business.

The company, which owns Ladbrokes, Coral and Sportingbet, plans to find out if it can recoup bonuses paid to former board members, according to The Sunday Times.

Ex-CEO Kenny Alexander (pictured) was one of many who enjoyed incentives totalling £82m between 2011 and 2017, during which time the group was called GVC and operated a division in Turkey. The group said it will launch an internal review into the feasibility of taking back the bonuses once the ongoing HMRC bribery investigation and criminal prosecution is finalised, according to a source.

Entain revealed on Thursday that it had set aside £585m for a potential settlement with British authorities regarding bribery offences in the Turkish arm, which was sold

in 2017.

It is currently in negotiations for a deferred prosecution agreement with the Crown Prosecution Service following the HMRC investigation, which looked into GVC’s use of third-party suppliers processing payments allowing the company to offer online gambling services in Turkey.

Entain chair Barry Gibson said the events in question were well in the past and that today, the business is nothing like the one it was in 2017.

He said: “We have been working closely with the CPS throughout this process, and they have recognised our extensive co-operation. Following a complete overhaul of our business model, strategy and culture in the last few years, the Entain of today bears no resemblance to the GVC of yes-

Allies of Alexander suggested he would not be implicated when the details of the case are published.

Entain told The Sunday Times: “Like any other business, Entain’s board has a duty to act in the best interests of the company and its shareholders.”

The gambling firm owns recognised brands including British bookie Ladbrokes

THE NOTE BOOK

Could Coutts row signal the end of ESG’s honeymoon?

Over a lunch last week a City contact and I were discussing the ever-growing use of the word ‘purpose’ in business. No firm appears to be without one, and the phrase “profit with purpose” has become part of the lexicon. “The problem,” my companion offered, “is that a load of companies think their purpose is completely different to how they make any money.” It’s a fair point, and one that legendary fund manager Terry Smith –who suggested that Unilever’s attempt to find a purpose for Hellmann’s mayonnaise indicated a firm which had misplaced its marbles –would no doubt agree with.

There is a wider point, though. In the fallout from Natwest’s botched handling of Nigel Farage’s closed Coutts account was a growing sense that what had got the banks into trouble was nothing more complicated than forgetting that banks are supposed to be there to be banks, rather than moral arbiters. There is, in short, a gentle

REAL ACTION OFF THE PITCH

and perhaps quietly proffered backlash against the tyranny of ESG well on its way. Indeed in the States, ESG has been all but barred from the boardroom.

Perhaps what we might see is a return to the boring version of ‘profit with purpose’ –that is, making money, and with it growing and expanding. Capitalism has followed this model of ESG for decades and, since we’re all vastly richer than we used to be and life today is better than it ever has been, one can assume it wasn’t a terrible idea.

Perhaps, as my companion alluded to, it’s time for CEOs to remember that their purpose is to produce well-run, efficient companies, and that whilst they may be able to deliver societal goals alongside, tick-box ESG exercises are at best a distraction and at worst likely to send a company off in all sorts of wild directions.

The best ESG strategy, then? Sustainable growth. Who knew?

To Plough Lane over the weekend, to watch Wimbledon take on the Hollywood-funded Wrexham in League Two. It ended 1-1 in a hard-fought draw, but the real action in football today is happening off the pitch. American investment in lowerleague football –see Tom Brady in a Birmingham pub this weekend –is a rising force. There are clearly commercial opportunities lower down the pyramid, but I do hope these recent converts to the passion of the English game actually understand how much it matters to fans.

£ It is interesting to see the level of scrutiny towards Labour’s policies beginning to ramp up. Last week saw criticism of their energy policies for both not being green enough, and for moving too quickly towards net zero. The big question for Labour’s leadership is whether the attempt to be a rather inoffensive all things to all men operation can survive the cut and thrust of the year or so before an election. Starmer et al may be wise to listen to those calling on them to be more aggressive.

£ One of the more eye-catching corporate updates last week came from H&T Pawnbrokers. The listed short-term loan firm has enjoyed a boom thanks to the cost of living crisis –hardly surprising when even Gracechurch Street now boasts a ‘Posh Pawn’ premise. In tight times it’s no surprise that pawnbrokers are in fashion but it remains somewhat baffling that Wilko, a firm seemingly tailor made for a downturn, has tumbled into administration. With investment, there appears turnaround potential.

A TOUCH OF HISTORY AMID SOME MODERN MISTAKES

CAN I QUOTE YOU ON THAT?

They’re worried about the Baileyocerous

Economist Dr Roger Gewolb attempts to give the governor of the Bank of England a new moniker

Many of those profiled in our weekly Square Mile and Me feature, when asked what they love about the City, cite the glorious mix of new and old in this ancient spot. The ‘new’ hasn’t always worked: our office is on Lower Thames Street, a canyon of anonymous office blocks which few would expect to last the centuries. But, as usual, there’s a welcome surprise: St Magnus the Martyr chuch, a beautiful Christoper Wren creation, sits just to the east of the current London Bridge and holds within it a scale, 5m-long replica of the chaotic, rather fun looking 1800s version. A series of shrines, and a host of other London historical oddities, completes the quite exceptional interior. You could do worse than wander down to take a look inside one lunchtime.

WHY GRID REFORM MATTERS

THE GOVERNMENT’s fresh attempts to revive the UK’s North Sea oil and gas industry have fuelled debate across Westminster over the balance between energy security and climate commitments.

Politicians and industry leaders are again at loggerheads over continued fossil fuel production and the growing role of renewables in the country’s energy mix. Yet the most significant policy proposals currently on the table have little to do with how to develop energy –but how to move it around.

Days after the much-ballyhooed announcement of new North Sea oil and gas licences, Nick Winser, electricity networks commissioner and former chief executive of the National Grid, handed in his report on the state of the country’s electricity grid. His findings exposed the historical challenge ahead for the government and wider energy sector and urging serious grid reform.

‘Grid reform’ may sound dry. But it is a hugely significant factor in the clean energy race with practical consequences that will be felt by every household – affecting everything from cheaper bills to how many pylons people see out their window.

GRID CONNECTIONS STALL DEVELOPER’S DREAMS

Green energy goals are often defined by the

wind turbines and nuclear power stations that could power them, but the reality is they are part of a huge re-industrialisation project requiring vast cabling underground, massive overhead pylons that can fill the skyline and substations for transmitting power.

This requires hundreds of miles of digging, construction and, likely, severe disruption for communities across Britain as the country looks to hook up wind turbines from the North Sea and nuclear power from Somerset to the country’s energy grid.

However, such plans for reindustrialisation remain well behind schedule, with Winser highlighting that it currently takes on average 12 to 14 years for energy projects to shift from the initial conception stage to securing a grid connection.

For context, that is around double the sevenyear development and construction period for offshore wind projects.

This is a real complication for the government’s targets of 50GW of offshore wind by 2030, 70GW of solar generation by 2035 and 24GW of nuclear power over the next three decades – alongside ambitions to decarbonise the electricity grid by 2035. It means that, regardless of whatever private investment is unlocked and the scale of the ambitions the government set, cutting down carbon emissions with green energy projects is currently a near impassable objective for the country.

His plan is for the government to cut connection times to seven years – in line with the average development time for projects –to avoid demand being constrained by consistent logjams.

LOCAL OPPOSITION WILL NOT GO AWAY QUIETLY

To achieve this, Winser is calling for the planning to be streamlined with a carrot and stick approach of lump sum payments to households, in exchange for a quicker approval process with fewer hurdles for developers from local government. If this is accomplished, then connections would keep up with development times for projects – a fundamental factor for improving investor sentiment in the UK.

National Grid operates a queueing system for new projects seeking connections, which effectively operates on a first-come, first-serve basis.

It is extremely congested, with more than 230GW of energy generation awaiting hookups to the country’s electricity network, compared to 80GW of generation connected so far. Many renewable energy developers have received connection offers for the 2030s, putting plans for a green energy transition way behind schedule.

The group recognises the problem and has unveiled a five-point plan, including an amnesty for unviable projects in the queue so

they are no longer fined when they pull out, and launched a consultation on permitting developers to make their own connections to the grid.

But these moves will mean little if local opposition to new projects cannot be easily quelled.

The lump sums mooted are yet to be defined but the reality is that people’s dislike of pylons tends to extend beyond financial considerations, which could easily be construed by sceptical locals as de-facto bribes.

However, polling still from Survation shows that nearly two-thirds of people (64 per cent) support the development of new electricity grid infrastructure to boost energy security, while only five per cent oppose it.

With such intransigent opposition, the government will have to risk severe political capital and goodwill from constituencies across the UK to support the wider needs of people living in this country – who deserve cheaper, cleaner energy bills from a government not dependent on overseas fossil fuels to meet supply needs.

Net zero can only work if it is presented as a real upgrade in people’s living standards, and it will only be achieved if the government is prepared to make initially unpopular choices, such as reforming planning.

Otherwise, the country’s energy security and climate goals are little more than a fantasy.

THAMES DEBT DOWNGRADE

Thames Water’s financial future faces fresh doubts after credit rating agency Fitch labelled its turnaround plans as “high risk”. The UK’s largest water supplier is set to embark on an investment plan to upgrade its creaking infrastructure and tackle sewage spills. However, Fitch warns its recent efforts to raise £2.5bn by the end of the decade could be hampered by heavy fines and even nationalisation –with Ofwat holding contingency plans in case of its collapse. The company is still pressed under a £14bn debt pile, while funds coming its way are conditional on environmental turnaround alongside hopes of higher water bills –a matter of contention in the industry.

SECURITY FEARS OVER FRENCH ENERGY DEALS

£ Strings have been attached by the Cabinet Office to EDF’s takeover deal for two divisions of General Electric. This includes the option for a state takeover right if stipulations around protecting sensitive information are not fulfilled, along with a government-appointed observer at both companies. Downing Street fears the deal could be a risk due to critical national defence capabilities relating to General Electric’s naval propulsion systems –requiring EDF to maintain contracts with the Ministry of Defence. The intervention is permitted under the UK’s National Security and Investment Act signed two years ago –but it is surprising as previous decisions have related to Chinese and Russian lined acquisitions, rather than Western allies.

SEND US YOUR THOUGHTS

What can we do to improve energy security?

Email energy editor Nicholas Earl at nicholas.earl@cityam.com

Energy firms mount defence of heat pump transition as delay pondered

NICHOLAS EARL

ENERGY suppliers have given heat pumps a fresh vote of confidence despite calls from backbench Conservative MPs to slow down the shift from heating systems powered by fossil fuels.

The government has been consulting on the future of oil-

powered boilers, which heat 1.7m homes across the UK, and is considering beginning a phase-out of new sales from 2026.

New installations of gas boilers are also potentially set to be banned in all homes by 2035 as part of the push to net zero carbon emissions.

Senior figures at Octopus Energy and Good Energy told City A.M. that

recent reports the government could shift away from an outright ban would be misguided if delivered.

Octopus’ Clementine Cowton said oil boilers were “expensive and inconvenient” and Good Energy boss Nigel Pocklington said the government’s boiler upgrade scheme should be made more consumer friendly in order to increase uptake.

City A.M.’s energy editor Nicholas Earl delves into the sector’s challenges in his weekly column

CITY DASHBOARD

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LONDON REPORT BEST OF THE BROKERS

Brokers, email your research to notes@cityam.com

Week ahead: Latest inflation print set to dominate markets

THE CITYis braced for the UK’s latest inflation print this week as investors look to map out the scale and aggression of further rate rises from the Bank of England.

The Bank toned down its move last week with a 0.25 basis point hike to 5.25 per cent after July’s inflation read fell faster than expected to 7.9 per cent.

Analysts are betting on rates reaching a peak of around 5.75 per cent, but another faster than expected fall in inflation in Wednesday’s print could impact the speed of further rate rises.

Economists polled by Reuters expected the inflation rate fell to 6.7 per cent in July, lower than the Bank’s 6.8 per cent forecast, and well down from 7.9 per cent in June.

The print comes after stronger than

expected growth in the UK economy last week signalled that tightening monetary policy may not be having the desired effect.

Data out on Tuesday from China on retail sales and industrial output will also watched this week, following turmoil last week after the country fell into deflation.

Insurance giants are set to dominate corporate proceedings in the Square Mile as Aviva, L&G and Admiral all update investors on their performance.

The sector has been hit with an overhaul in accounting rules over the past six months so investors will be watching keenly to scope out the impact on reported profits.

Admiral will also be looking to win back some confidence after an underwhelming showing in March. Shares in the firm cratered when a dividend cut accompanied a sharp drop in profits.

Fewer termites due to cooler weather may be good news for most, but it has proven rather a pest for bug exterminators Rentokil, which has seen its share price drop after reporting a slowdown in activity. Analysts at Peel Hunt noted that a slowdown in home sales could further affect the firm’s termite division. They rated Rentokil shares a ‘hold’ with a target price of 629p.

Canadian consulting firm Stantec is having a good year, with significant demand across its growth solutions. The company reported a 24 per cent jump in revenue for the first half of the year, bolstered by a strong performance in energy, carbon regulation and air quality. Analysts at Peel Hunt rate the stock an ‘add’ with a target price of 594p.

FINGERS CROSSED FOR JUST RIGHT

“A lower than anticipated inflation number could build confidence in a Goldilocks scenario where the economy is blowing neither too hot or too cold and the Bank can start to dial back the pressure on rates and avoid inflicting much more pain without risking losing control of prices again.”

RUSS MOULD, AJ BELL

adding critical context

decisions that require consciousness, education and thought leadership.

OPINION

EDITED BY SASCHA O’SULLIVAN

Vote blue, go green? A climate takeover of the Conservatives is an unlikely feat

Eliot Wilson

IF YOU could look at any facet of Zac Goldsmith in isolation, he would fit easily into the Tory taxonomy. The multimillionaire Old Etonian; scion of a distinguished Anglo-Irish Ascendancy family; a clubman and gambler, who co-founded the Fitzdares Club to give the pseudo-venerable bookmakers a physical home in Mayfair. If you combine all of those in one lanky frame, however, with a distinctive core of passionate, angst-ridden and sometimes hectoring environmentalism, then you are left with the more inscrutable figure of Lord Goldsmith of Richmond Park.

In June, Goldsmith resigned from his expansively titled post of Minister of State (Overseas Territories, Commonwealth, Energy, Climate and Environment) at the Foreign Office. He had held a global climate-related brief since the beginning of Boris Johnson’s premiership in 2019, and no-one could accuse him of being late to the party: his childhood heroes were David Attenborough and Gerald Durrell, and when he returned from a drearily predictable voyage of South Asia in his early 20s, he was appointed reviews editor of The Ecologist, the radical but high-minded journal founded by his uncle Teddy Goldsmith in 1970. The cause of Goldsmith’s exit, which

made less impact than he must have hoped, was Rishi Sunak’s waning commitment to tackling climate change.

In a resignation letter which stinted neither on length nor on heroic language, Goldsmith detailed the UK’s environmental achievements and then declared himself “horrified” as “we have abandoned these commitments”.

He mourned that “the UK has visibly stepped off the world stage”, switching to an unconventional second-person for the intended coup de grâce: “The problem is not that the government is hostile to the environment, it is that you, our Prime Minister, are simply uninterested. That signal, or lack of it, has trickled down through

Whitehall and caused a kind of paralysis.”

This is savage stuff. In another time, from another pen, such a personal and explicit attack might have wounded Sunak. But it was written only three weeks before the narrow and surprising Conservative win in the Uxbridge and South Ruislip byelection, at which a rejection of the ULEZ scheme to control emissions was believed to be the decisive factor. It was written in an atmosphere in the Conservative Party of increasing scepticism about the cost and even the efficacy of some of the government’s existing commitments, like spending £20bn on carbon capture and storage

technology, phasing out new internal combustion engines in 2030 and achieving overall net-zero emissions by 2050.

Many in the Conservative Party believe these policies are, at best, aspirational poses which cannot survive cold financial reality. There is also a self-fulfilling prophecy that action to reduce emissions by the West is irrelevant if it is not matched by action by China and others. Since there is no prospect of China imposing such limits on itself, the West is let off guilt-free. Goldsmith is not completely isolated. While many MPs are now cherishing David Cameron’s 2013 instruction to aides to “get rid of all the green crap”,

Making the arts a staple part of our school system will boost London as a capital city

THE City of London is known worldwide as a leading hub for finance, but its identity spans much more, including being a global centre for the creative industries.

Arts are still, in some places, not regarded as a priority. The fact that they’re not included in the English baccalaureate group of subjects plays a role in this. Studying some subjects up until the end of school is symbolic as much as about skills; the renewed focus on maths proves we value it as an important subject. Excluding arts from the English baccalaureate sends the wrong message, and it’s a mistake, not only for our young people but for our economy too.

Creative skills – our arts, culture, design, and architecture scene – gives the City a competitive edge over our international rivals and makes us a magnet for talent. But these creative industries have faced significant challenges in recent years due to the effects of the pandemic and Brexit.

They also face the long-term chal-

Nicholas Lyons

lenge of ensuring a future pipeline of skills and talent, at a time when educational opportunities in the arts have been diminished for many young people.

Throughout our history, the Square Mile has been a place where commerce and creativity have thrived side by side. The City’s position as a centre of culture is important, but sometimes underplayed.

Yet the creative industries bring huge economic value to the UK economy. They contribute more than £115bn to our economy and export £36bn worldwide, accounting for almost 12 per cent of UK services exports, according to the Creative

Industries Federation. They also provide over two million jobs across the UK, including more than 600,000 in London.

The capital’s cultural offering also boosts its attractiveness as a location for businesses and investment. When international financial and professional services firms are looking at where to locate, having a city in which staff want to live is a huge competitive advantage. And people want to live in London for many reasons, its arts and culture scene being one of them. And finally, the skills and innovation nurtured by our creative industries filter through into other parts of the economy, supporting our financial services sector – such as consultancy, professional services, and fintech.

As UK Music points out, “lucky breaks” in the arts do not often happen by accident. They are the result of years of hard work, underpinned by an education system that supports creative skills, with the right infrastructure in place and targeted funding and investment.

There is a danger of opportunities in the arts being narrowed and becoming a preserve of the better-off who can afford private education. We would all be poorer as a result.

The City of London Corporation is determined to support the creative sector, and as its fourth largest UK funder, we invest more than £130m every year. It’s why we manage a range of worldclass cultural and heritage institutions, including the Barbican Centre, Tower Bridge, Guildhall School of Music & Drama, and Guildhall Art Gallery. All of these institutions depend on a skilled workforce.

Quality of life, and the richness and authenticity which culture brings, is a vital part of what makes London an economic powerhouse. If we want the UK’s creative industries to thrive and give our financial services sector a competitive edge, we need to invest in the young artists of the future. We must never become complacent to that fact.

£ Nicholas Lyons is the Lord Mayor of the City of London Corporation

Sir Alok Sharma, president of the UN COP26 from 2021 to 2022, wrote recently that “it would be self-defeating for any political party to seek to break the political consensus” on climate change. There is the Conservative Environment Network, chaired by Ben Goldsmith, Zac’s brother, but even its parliamentary champions, like Simon Clarke and Philip Dunne, are not exactly the type the Tory whips fear. There are a number of overlapping games being played here. The numbers simply do not exist for a Tory environmentalist insurgency at Westminster, and even if they did, Goldsmith is not its El Comandante. Instead, the strategy that Goldsmith, Sharma and others must adopt is an appeal to evidence, a high-wire act in British politics in 2023. A recent Opinium poll found that nearly twothirds of 2019 Conservative voters intending to switch to Labour thought Sunak had “not gone far enough” on climate change, not that he had gone too far. That said, cutting back on netzero and environmental pledges is about soothing an uneasy right, not broadening an electoral coalition, so these may prove to be the wrong facts. For the moment, it seems that the sceptical wing has the momentum. The Ulez lesson is being gripped with white-knuckled fingers. The prime minister can be forgiven for thinking he might have found a secret weapon—but the idea that it is on the scale of Oppenheimer’s achievement is, as things stand, an exercise in nuclear-powered optimism.

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

HOLIDAY WARS

August is in full swing and it’s our favourite time of the year as politicians flaunt their stuff on beaches across the world. Already so far we’ve had Rishi Sunak at a Taylor Swift SoulCycle, last week was Macron on a jetski in the French Riviera. What next? Giorgia Meloni on a hydrofoil in Sicily?

Conservatives like Alok Sharma and Zac Goldsmith have struggled to make climate policies mainstream party goals

WE WANT TO HEAR YOUR VIEWS

LETTERS TO THE EDITOR A supermarket solution

[Re: People aren’t lying to claim welfare, we really do have a systemic crisis of ill health, August 8]

I have been a welfare rights caseworker for over 22 years now and Ben Ramanauskas is quite right. It is people in poverty, on a low or no income, that are suffering the most in this cost of living crisis. Most all are just trying to eak out an existence on benefits that does not meet their everyday needs in the first place. This won't come as a surprise to any of your readers. But there are approximately £19bn of unclaimed benefits each year. Universal Credit isn't quite as 'universal' as it claims.

At Social Security Tribunals, my clients don't squirrel the backdated benefit they have won (and they win most of these Tribunals) into PEP's, ISA's or offshore bank accounts. They spend it in local retail outlets. A win-win for appellants, retailers and the local economy. When there was a one-off financial debacle in the City (one of many such 'one-off' financial debacles) this relating to PPI; this threw up a claims management industry all of its own. The annual figure of unclaimed benefit dwarfs the one-off PPI figure and yet there is no equivalent industry facilitating people in poverty to claim all that they are entitled to.

I am not suggesting people in poverty should pay a fee merely to claim the benefits they have a right to. But there is a coalescence of mutual interest here for retailers and supermarkets to help facilitate people in poverty to claim this £19bn of unclaimed benefit. Charitable

advice agencies don't have the capacity, resources or expertise to organise and practically facilitate such a benefit take up scheme. Supermarkets do and if it is based on £19bn of additional sales, it is in their interests.

Supermarkets could do so much more to alleviate poverty while increasing sales. They could provide regular customers with a supply of food and consumer goods, gratis free, to cover a period, only charging for subsequent top-up shopping so families would always have a store of food when they experience a domestic financial crisis such as a redundancy or accident and a delay in receiving a decision on a claim for Universal Credit.

This naturally enhances customer loyalty, instead of rejecting their previously loyal customers when a family experiences a financial crisis and is rejected and stigmatised as a previous customer who cannot pay for food. This would go some way to help reduce the demand for food banks over night, an outcome we all want.

The Not-for-Profit charitable advice sector cannot sort this and nor should they have to. The UK has one of the most sophisticated, advanced & efficient food production, supply, distribution and retail sectors in the world. It's ridiculous that community groups have had to cobble together as food bank suppliers, but thank God they have, in the absence of much needed innovation and utter total absence of any recognition of the needs of their (previous) customers when in crisis. The retail sector needs to step up to the plate and address their customers in a holistic way. It isn't about selling a one-off tin of beans but about looking after customers throughout their lives.

Vaughan Thomas

PRICE WAR Italy must justify a price cap on airlines from mainland

Keeping loss-making giants like WeWork flush with VC cash is killing competition

Jordan Greenaway

IAM certain I'm about to make some enemies in the venture capital community. But, here it goes: it is time to clamp down on start-ups raising billions, just so they can undercut competitors – and push them out of business.

WeWork is the latest example of this tragedy in action. The co-working giant is on the brink of bankruptcy, capping off a catastrophic yet, at times, amusing roller coaster ride: valued at $47bn at its peak, the business might soon be worth $0.

A lot has been written about its founder, Adam Neumann, who minted billions off this car crash. Much less attention has been focused on how the underlying VC system enabled this destruction of value – and likely deprived the workplace sector of genuine innovation from other start-ups.

WeWork raised $22bn from VCs and other investors, and yet never turned a profit. Awash with cash, WeWork seems to have pursued a business model of predatory pricing, offering tenants discounted rents and introductory deals that were never sustainable.

According to an investigation by Property Week in 2019, WeWork discounted their rents by as much as 50 per cent on 12-month contracts whilst also paying agents high fees to fill empty offices. At its height, WeWork was hemorrhaging money as a core business model. Between 2019 and 2021, WeWork lost more than $9.4bn. More than the GDP of Monaco.

It's inconceivable to me that this behaviour did not undermine competition in the workspace sector. If you operated an office business, how could you possibly have competed with this rate of burning money? If you were an ambitious entrepreneur, why would you choose to compete against such a well-funded, absurd competitor?

WeWork's deep pockets put it in a position to undermine competitors, push them out of business, and deter entrepreneurs from entering the sector. To my eyes, it looks like VCs wanted to capture the office market by weathering heavier losses, so that they could then hike prices once the competition had been decimated.

And this is not just conjecture. Leaks suggest this is exactly the intention of some VCs when they throw billions at high-growth start-ups.

Take the example of Uber. As first

highlighted by academics Matthew Wansley and Samuel Weinstein, during Uber's IPO roadshow, the company reassured potential investors that while it might be losing money hand over fist right now, it estimated profit margins of 25 per cent after "competitive pressures" subsided. This is, quite literally, predatory pricing as a business model. If this behaviour was being carried out by large corporations, I cannot help but think that regulators would have acted already.

But, historically, WeWork and similar players seem to have been given a free pass because they're 'disruptive' startups. That's understandable. Given these start-ups' positive associations with disruption, it is more difficult to see what actually may be going on: the bankrolling of unprofitable business models to destroy genuine innovation that could deliver better, cheaper services to customers.

We need to ensure this does not happen again, and the best solution is robust competition enforcement. While the details need to be ironed out, it

seems sensible to recommend that if a start-up raises a certain amount of collective funding, say $1bn, the competition regulator needs to take a look at how that money is being used, and ensure it is not being leveraged to undermine the market.

This review should be quick and proportionate. The regulator should rapidly determine what is going on, and whether the funding could create perverse incentives or distort the free market. At the moment, the regulator generally only gets involved if that fundraise gives an established corporation, such as Microsoft or Google, a certain stake in the business.

Taken together, it's astounding that we have no problem criticising the Chinese government for subsidies and protecting its domestic start-ups to the detriment of western competitors – yet turn a blind eye when large VCs seem to be doing the same for their own portfolio companies.

£ Jordan Greenaway is founder of communication agency Profile

Airlines flying between mainland Italy and islands like Sardinia have been told by Giorgia Meloni’s government they cannot charge more than 200 per cent of an average price. But the European Commission has said the practice could be banned under strict rules and have demanded ‘more detailed information.’

TRAVEL

Forget Jack Daniel’s, the real whiskey pioneer is the AfricanAmerican who taught him. Josh Barrie raised a dram to a Nashville legend

He’s in a cowboy hat and has a gun at his hip and he’s giving out swigs of moonshine liquor.

This is Dan Call Farm, Shelbyville, the birthplace of Tennessee whiskey. At least the Tennessee whiskey we know today.

Which is sweet and, well, kind of smooth; often entry level booze the most famous of which is found on every bar back home in Britain. As ubiquitous as a mention of Taylor Swift in Nashville, just up the road. Listen carefully way down here in Lincoln Country and you can still almost hear the thud of boots on beer-stained wood in one of its lustrous honky-tonks. I'll soon return to them.

Dan Call Farm, though. It’s where, sometime in the mid-1800s, Jack Daniel - a name instantly recognisable to all - was taught the craft of distilling by a preacher’s slave, Nathan “Nearest” Green, America’s first African-American master distiller. It won’t come as a surprise that Green was, until quite recently, a forgotten man. Yet he was a pioneer of the Lincoln County Process by which raw whiskey is filtered through - or steeped in - charcoal before being put in barrels for aging; he was the man who showed Daniel the way.

Uncle Nearest, as he was then and remains affectionately known, was for well over 100 years consigned to misplaced archives, mismatched documents, and crumpled photographs. This is the Deep South, after all. Only 50 miles away, in a town I won’t bother naming, is where the Ku Klux Klan was formed. Earlier, on the way out, driving south to the countryside toward the famous town of Lynchburg, I spotted a Confederate Flag. But I’m not visiting Tennessee to get caught up in racial tensions I know nothing about. What’s positive and restorative is that Uncle Nearest is remembered in the US today, mostly thanks to the work of Fawn Weaver, who in 2017 set up Uncle Nearest, a whiskey brand and one of the fastest growing companies in America. Weaver, an African-American author and investor, began educating people about Green’s existence and life’s work. Over dinner in Nashville, she talks about how she set about finding Green’s ancestors, all of whom were scattered across the United States; how she compiled the legacy of a slave - emancipated after the Civil Warwho lived and worked and near enough established a style of whiskey that fuels so many hangovers of the type I reel from each day I’m in Tennessee.

“I was determined to seek out the truth,” she says. “It was a journey - finding these ancestors, these photographs. There was all this history. And now it’s about honouring that legacy. It’s a positive story. I think we’re building something special.”

Ten minutes drive from the farm, on classically open American roads, sparse save for the odd wooden, white-slated house, wearied gas stations and smile-filled restaurants, is the culmination of all this work. Now the story of Uncle Nearest is out there, we arrive at what’s next: an enormous, sweeping distillery. On hundreds of acres are barns for bottling, stables full of horses, each surveying the land, a speakeasy in a purpose-built chapel commemorating women in America winning

NASHVILLE’S REAL HERO

THE TRAVEL HACK

There is still a way to get to Australia in time for the Women’s World Cup final if you’re looking for a spontaenous adventure. One Singapore Airlines flight leaving Wednesday night arrives in time for the final.

the vote - Tennessee politicians cast the final say - a “candy” store and a gift shop. This is a multi-billion dollar operation. No wonder Uncle Nearest is looking beyond America. And so here I am, a British journalist sipping Uncle Nearest whiskeys of various ages in a dizzying complex in Tennessee's historic backwater. In charge of distilling is Victoria Eady Butler, a master blender and the great-great granddaughter of Nearest.

The standard serve, Uncle Nearest 1884named after the year Nearest retiredbrings orchard fruits, baked apricots, and plenty of vanilla and nutmeg. It’s a solid whiskey. The 1856 variety - the year Nearest perfected the Lincoln County Processis more rounded still, with a complex aroma of sandalwood, caramelised nuts and mint leaves. Eady and her team also craft rye, small batch and single barrel whiskeys, each one smooth and deserving of much admiration. Uncontroversially,

the older they are, the more delicious they happen to be.

The day, highly enjoyable, also happens to be a little trying, because for many hours my only form of sustenance is a sodden quiche inside a circular croissant. I have no idea where it came from. But I guess the Americans have done weirder things. I couldn’t wait to get to Nashville. That’s the enticement, isn’t it?

Day one in Nashville and what do you expect? A trip out to many of its honky tonks, each a place of chaos and delirium. Frozen margaritas aren’t hard to find and in the bending cacophony of country music, blonde, cowboy-hatted hair and rhythm, hot sun-drenched days turn preposterously into dangerous nights. Everybody talks to you. Whether you’re in the mood or not. And everything is either a contest or a billowing proclamation. One man jumps towards me only to inform me that he simply loves smoking, despite the

fact his wife lambasts him for it, and will rue the day he gives up - because that will be the day he dies.

Another stops me in the street to ask me if I served in the Armed Forces. Seriously. I mean just how stereotypical can America be? One woman, a nurse, takes the time to remove herself from her vehicle having spotted complications with our order at White Castle, cult thanks to a movie about getting stoned. All the while, countless diners of varying sizes tell me just how hot Nashville fried chicken happens to be. And it is. It brings on the sweats. I wonder whether all this constant insistence is some sort of warped psychology, one that if you’re told about it enough, it’s the only thing on your mind, and you dumbly order the “XXXL hot chicken” thinking everything will be fine when in fact it most certainly will not. Between mouthfuls of fried thigh, I cannot see, and later comes searing, unadulterated pain. But it

BOOK THIS

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is impossible, just impossible not to love Nashville, not to love Tennessee. Because mottled throughout all this undulating blustering is a city and a state that is rightly proud.

First, fine whiskey, whatever it happens to be, ideal for washing down all that fried chicken and frickles. American gastronomy misses often, but in slicing pickles finely, battering and frying them, it has performed wonders.

And the music. Above it all is the music. Nashville is a circus, brightly lit, busy, fuelled by a resplendent form of joy apparently only achieved by way of hard liquor, country music and the stomping of cowboy boots.

NEED TO KNOW

British Airways flies direct to Nashville from London Heathrow; to learn more about the distillery and plan a visit go to unclenearest.com/distillery

THE LONG WEEKEND

THE HOTEL CLUB & SPA JERSEY

THE WEEKEND: Famed for its blue waters and creamy fudge, Jersey is the charming British island only an hour’s flight from London. It’s popular with families, foodies and anyone craving sun and sea on their staycation. Only being 14 miles away, your phone’s network will even welcome you to France when you land, which is a fun little novelty that makes you feel properly on holiday. The island’s capital, St Helier, lies on the South Coast encircled by highlands, protecting it from the worst of the sea winds. Hire a boat to charter the sparkling turquoise waters, build sandcastles on the surprisingly white sands and wander the winding streets of the pretty main town to discover the Maritime Museum, Arts Centre, market stalls and pubs, before settling into five-star luxury at The Hotel Club & Spa.

WHERE? It would be easy to stay at The Hotel Club & Spa and never actually see the island. Take advantage of the Southerly sunshine with cocktails served to the outdoor pool, and there is a large, warm salt-water pool in the spa downstairs. There is also a steam room, experience shower (press all the buttons if you dare) and a salt cave. Do not miss the massages, so good that when I visited they put more than one visitor to heavenly sleep. Night owls can breathe easy as the Honesty Gin Bar on site is open 24/7 for residents, each bottle displayed with useful tasting notes and the walls are lined with books and board games to while away a few hours. From twin rooms to family and deluxe suites, all are comfortably spacious and come with a mini bar that truly caters for everything. Alcohol, chocolate, and your morning

TOP TIP

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coffee. Earplugs? Check. Sewing kit? Check. Rennie and plasters? Check and check. And just in case you forgot to pack your own, some discrete sex toys. Feather tickler, intimate lube and a mini vibrator anyone? If you’re having too much fun in the room, breakfast can be delivered.

THE FOOD: Lunch is best served on the suntrap of a terrace, enclosed by green hedgerows and climbing roses, the wide white parasols and terracotta tiling making it feel like you could be in any of the chicest cities of Europe. The hotel also boasts the Michelin-starred Bohemia. Jersey used to have four, but Bohemia is the only restaurant to have retained their star on the island. It is clear why, with Head Chef Callum Graham touted as the UK’s rising star of fine dining. Graham combines locally sourced ingredients from Jersey and France and offers an eight-course tasting menu as well as a pescatarian and vegetarian option for £120, or an exciting six-course “Surprise” menu at the Chef’s discretion for £99.

Starting with bread and seaweed butter and ending with a cigar-box of dainty chocolates, the menu is expertly put together, and understandably given the proximity of the sea, the fish dishes sing the loudest. The wine list is impressive, showcasing some highly acclaimed English wine such as Sugrue’s ‘The Trouble With Dreams’ and vintage Champagne like a 1982 Salon. For those with fromage on their mind, a large cheese trolly is wheeled out.

NEED TO KNOW

Double rooms start from £160 with complimentary breakfast; theclubjersey.com

Jersey, an hour’s flight away, feels like a true escape, finds Libby Brodie

Sell up or come clean, frustrated Man Utd fans tell Glazer family

FRANK DALLERES

MANCHESTERUnited’s owners, the Glazer family, have been urged to stop dragging their heels over a sale of the club – or explain why they have not struck a deal yet.

It is almost nine months since the Glazers announced they would entertain offers for the 20-time English champions but the Americans remain in situ, despite receiving record-breaking offers from British billionaire Sir Jim Ratcliffe and Qatar’s Sheikh Jassim Bin Hamad Al Thani.

United fans have grown increasingly exasperated by the protracted process and plan to make their feelings known in a protest outside Old Trafford ahead of their first Premier League match of the season, against Wolves this evening.

“As time goes on this feels less like a sale process and more like the Glazer family is holding Manchester United and its fans hostage,” said a spokesperson for the Manchester United Supporters Trust (MUST).

“The united message of fans is clear – sell the club. And if they do not intend to do so, at least have the courage to say that and explain what the charade of the last nine months has been about.

“On the pitch, there is clear progress at United and the whole fan base is be-

hind Erik [ten Hag, manager] and the team. But off it, the discontent about the ownership and the sale process has not gone away and will only escalate now the new season has arrived.”

Both Ratcliffe, the boss of chemicals giant Ineos, and Sheikh Jassim are believed to have made offers valuing United at more than £5bn. The Glazers, who took over in a £790m takeover in 2005, own 69 per cent of shares in the New York-listed football club.

The offers are short of the £6bn valuation that the Glazers are said to have targeted, but nonetheless would represent a world record sum paid for a sports team. The NFL’s Washington Com-

Pochettino left wanting more after Chelsea begin managerial reign with spirited draw

FRANK DALLERES

manders, which changed hands this summer, set the current benchmark of $6bn (£4.7bn).

There has been no development since the end of last season, when the Glazers’ bankers, the Raine Group, concluded several rounds of bidding. The stalemate has led at least one party to conclude that a sale is now unlikely.

The Glazers fielded various propositions. While Sheikh Jassim wanted to buy the club outright, Ratcliffe was happy for the current owners to retain a minority stake. Other parties offered to buy small shareholdings or partner with other bidders.

Deja Vu for Hull as Brit comes second in 2023 major again

MATT HARDY

CHARLEY Hull suffered a second major heartache of 2023 as the Brit fell away on the final day of AIG Women’s Open to finish six shots behind winner Lilia Vu at Walton Heath yesterday.

Hull came second in a major for the second time this year after achieving the same finish at the US Women’s Open.

The English golfer began the day on nine under par, in a share of the lead with Vu, but a one-over-par 73 on Sunday in Surrey ensured a comfortable round for the eventual 14-under-par American winner.

The win was the second major triumph for Vu in 2023, after she won the Chevron Championship, and only her third professional title overall. She was tied for 41st in last year’s Women’s Open but will bag £1.1m for her triumph.

“It sounds unreal, I had a tough run over the last couple of months so I came into this tournament and wanted to be in contention,” Vu said on the course after the win.

“I was not calm inside, trust me. I love playing with Charley, she’s so fun to watch. I was really wanting to play with her. She’s a really great golfer. This has been the best crowd I’ve ever played in front of.”

CHELSEA manager Mauricio

Pochettino insisted his team deserved all three points after beginning his tenure with a 1-1 draw at home to Liverpool.

Luis Diaz put the visitors in front when he stretched to convert a through-ball from Mohamed Salah as Liverpool threatened to overrun Chelsea in their opening Premier League fixture.

But new signing Axel Disasi, who arrived earlier this month from Monaco, swept home an equaliser before half-time, while both teams had goals disallowed for offside.

“I think we deserved a little bit

more overall,” said former Tottenham boss Pochettino, who took charge in July.

“We feel pleased, but at the same time disappointed because we wanted to win and we deserved to win, but it is only the beginning.

“It was difficult from the beginning but how we grew in the game, found the way to play and started to dominate and push Liverpool deeper.”

Liverpool thought they had gone two up when Salah beat Robert Sanchez only to be ruled offside, while the same fate befell Chelsea after Ben Chilwell rounded Alisson.

“The start was really good, offensively and defensively. We

scored a super first goal, scored a sensational second goal that was unfortunately offside,” said Reds boss Jurgen Klopp.

Klopp added there was no update on Moises Caicedo, the Brighton midfielder subject of a £110m transfer tug of war between Liverpool and Chelsea.

Elsewhere, new Tottenham manager Ange Postecoglou saw his side draw 2-2 at Brentford in their first game since selling Harry Kane to Bayern Munich.

Cristian Romero headed Spurs in front but Bryan Mbeumo’s penalty and Yoane Wissa’s deflected strike put the hosts ahead until Emerson Royal’s late first half equaliser.

Mbappe’s U-turn over PSG dashes Real Madrid hopes

KYLIAN Mbappe and Paris Saint-Germain have reached agreement for him to stay at the club this season, in a move that appears to rule out a summer transfer to Real Madrid.

Mbappe has been reintegrated into the PSG first team after peace talks over the weekend resolved a stand-off between the French champions and their star player. The 24-year-old had threatened to run down the remaining year of his contract and leave for free next year, prompting furious PSG chiefs to put him up for sale.

But Mbappe agreed to commit to the team in negotiations on Saturday and

there is optimism that he will extend his contract until 2025, ensuring a fee if he leaves in 12 months’ time.

“Following very constructive and positive discussions between Paris SaintGermain and Kylian Mbappe before the PSG –Lorient game, the player has been reinstated into the first team training squad,” the club said. Mbappe rejected a world record £259m transfer to Saudi Pro League team Al-Hilal last month, having set his heart on Real Madrid, who failed in a bid to sign him last year.

The Spanish capital remains his most likely next destination but that switch seems set to have to wait for another season following his U-turn.

GOLF

FRANK DALLERES

The Glazer family has been exploring a sale for almost nine months

FOOTBALL

Disasi, who arrived at the club from Monaco just two weeks ago, netted his first Chelsea goal in their 1-1 draw with Liverpool

FOOTBALL

Lionesses must shake off stupor to win cup

PRE-TOURNAMENT favourites in some circles, England received a wake-up call in their Women’s World Cup quarterfinal win over Colombia on Saturday. While fans at home went straight from bed to sofa for the morning kick-off, Sarina Wiegman’s Lionesses came dangerously close to sleepwalking out of the tournament. Only when they fell behind were they jolted into showing enough signs of life to earn a 2-1 win and a semi-final against co-hosts Australia.

Five games in, England are still to really get going Down Under. A scrappy opening win over Haiti could be put down to ring-rust, while another narrow victory, against Denmark, was excusable for the quality of the opposition. But a 6-1 thrashing of China proved to be a false dawn, Nigeria thoroughly frustrated the Euro-

Owner-manager Marc White tells Matt Hardy why investment from fans can take them to new heights

THE National League has long been the gateway to English football’s professional divisions and has recently been at the centre of an international portrayal of the beautiful game.

Wrexham’s promotion from the division – which this season spans Fylde to Southend, Gateshead to Eastleigh –was documented in a series commissioned by their celebrity owners Ryan Reynolds and Rob McElhenny, but they were not the only side to have cameras tracking their club.

Dorking Wanderers, in their second National League campaign, were founded in 1999 and have achieved 12 promotions in 23 years, from the 17th to the fifth tier of English football. They’ve done the same.

And with Wrexham showing the division how an influx of cash can be the difference between league safety and an FA Cup run, Dorking are getting in on the act.

Now the club are offering fans the

England

sleepwalking towards elimination until they

behind against Colombia, writes Frank Dalleres

pean champions and took them to penalties in the last 16, and an energetic Colombia used the same blueprint at the weekend. Sluggishness is starting to look like the default setting for the Lionesses.

These lacklustre displays are deepening concerns about England’s attacking output that surfaced on the eve of the tournament. Far and away the top scorers when winning the European Championship on home turf last summer, they have since lost attacking spearhead Ellen White to retirement and Golden Boot winner Beth Mead and the sparky Fran Kirby to injury. Between April’s Finalissima win over Brazil and Lauren James curling home

against the Danes, Wiegman’s side went more than seven hours without scoring in open play.

The encouraging aspect is that when England did wake from their slumber in first-half stoppage time against Colombia they dazzled. Stunned by Leicy Santos’s floated opening goal, white shirts suddenly flooded forward and English bodies swarmed into opposition penalty box. Less than 10 minutes after going behind, in the ensuing chaos Lauren Hemp stabbed in the equaliser.

MATILDAS ON THE MARCH

They took that urgency into the second half and just after that hour mark they

had turned the contest on its head.

Georgia Stanway’s probing pass found Alessia Russo’s run into the channel and a lucky ricochet set up the England striker to smash a low, unerring finish inside the far post. This was, at last, more like the confident Lionesses outfit which romped to historic glory at Wembley last summer.

Despite a shortage of fireworks, England have shown other qualities at this World Cup. Colombia’s

Russo netted the winner for England against Colombia

goal was just the second to get past Mary Earps, they have shown defensive robustness and mostly controlled their games. They have found ways to win, even when reduced to 10 against Nigeria – no less than we have come to expect from Wiegman, who is on course to reach the final of a fourth successive major tournament.

Australia will be England’s biggest test yet, however. Having taken the scalps of Canada, Denmark and now France, the Matildas are riding a wave of home support.

They are also the only team to have beaten the Lionesses in Wiegman’s 37-game reign. England will need to shake off their stupor and rouse themselves again to avoid a repeat.

Bunch Of Amateurs has over 75,000 subscribers while their TikTok channel outperforms many teams in divisions above them.

HEART OF THE COMMUNITY

“From a digital point of view, we’re probably bigger than Championship clubs,” White added.

“From our personal point of view, it’s just been a way that people can follow the story and because we’ve come from the very lowest level, we want to keep that story real.

“If I’m down the pub restaurant in the High Street, that's just me. Every manager does the same thing, they just don’t have a camera.”

Sheffield FC were founded in 1857 and are the oldest club in the United Kingdom, according to Fifa, and are now in the seventh tier. Dorking were founded 142 years later and are eyeing a place in the English Football League. But White is under no illusions as to where the club can be, and recognises

WANDERERS: WHAT YOU NEED TO KNOW

Founded: 1999 by disheartened Wimbledon fan Marc White

League: The Wanderers play in England’s fifth tier, the National League, having been promoted in 2021-22

chance to be part of the aspiring outfit, with up to 30 per cent of the club’s ownership up for grabs from 7pm this evening.

ADDED VALUE

“It was a bunch of friends who started a park team, a Sunday morning side, and in the last 23 years we’ve built a couple of grounds along the way,” Dorking Wanderers’ owner, chairman and manager Marc White told City A.M.

“We’re now in the National League with the TV money and the commercials that come with that. We’re just

INCREDIBLE RISE OF DORKING

Stadium: Dorking play their home games at the 3,000 capacity Meadowbank Stadium

Last season: Wanderers finished 16th in the 24-team National League, finishing nine points clear of the four relegation places and 14 points off the play-offs

that it will not always be his job to take Dorking forward.

“Football is at the heart of the community, and you are only ever a custodian of a football club. It will be there after me,” White, 49, said.

“We want to take the club as far as we can, League One or the Championship. We don’t want to convince anybody they’re going to retire out of being a shareholder but if there was one story to get involved in, it’s ours.

“I know what is going to happen, we will have an FA Cup run of sorts, we’re going to increase our profile and keep going forward. That’s the plan.”

were

went

You are only ever a custodian of a football club. It will be there long after me

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