Wednesday 19 July 2023

LONDON’S BUSINESS NEWSPAPER

RORY FOR OPEN GLORY?

MCILROY AMONG FAVOURITES AT ROYAL LIVERPOOL P19

SOBER CURIOUS RUSSELL BRAND’S ‘LIFE-CHANGING’ FESTIVAL P16

IT’S BONUS TIME AT THE BANK

£25M PAID OUT TO THREADNEEDLE STREET STAFF DESPITE BAILEY’S PAY RESTRAINT CALL

THE BANK of England has dished out tens of millions of pounds in bonuses despite governor Andrew Bailey and other senior officials demanding workers accept realterms pay cuts.

Threadneedle Street rewarded staff with a total of £25m in one-off handouts over the last year, up from £23m in the previous year, according to a freedom of information request filed by openDemocracy.

Last year’s bonus bump comes after Bailey last month branded the current

prolonged fall in their living standards. Huw Pill, the Bank’s chief economist, also drew sharp criticism earlier this year when he said workers “need to accept” they are poorer as a result of increasing prices.

New figures out this morning from the Office for National Statistics (ONS) are expected to show the cost of living crisis is still gripping family finances.

Average pay at the Bank is £62,189, while Bailey is on about £500,000 a year. Bailey passed up a pay rise last year. Average household income after taxes and benefits in the UK is £38,100.

A Bank of England spokesperson said: “For this year, the Bank has given a 3.5 per cent pay award to its staff” which is below the UK average of 7.3 per cent, according to the latest ONS numbers.

Darktrace in the clear on figures: EY

JESS JONES

SHARES in Darktrace closed up 28 per cent yesterday after it revealed that a review of its accounts found a “number of areas” for improvement but were not “material” to its financial reporting.

The London-listed cybersecurity company hired EY in February to review its books after a short seller questioned its accounts.

New York-based hedge fund Quintessential Capital Management took a short position on the firm’s shares after it said “sales, margins, and growth rates may be overstated” and the company’s accounts contained “serious accounting red flags”.

But EY’s report seems to have eased investor concerns.

Darktrace’s chairman Gordon Hurst said the review “further reinforced the board’s confidence that management has set a tone and culture consistent with good governance”.

rewards is likely to attract scrutiny due to the Bank’s poor track record in taming inflation.

The last time the central bank reached its two per cent inflation target was July 2021. Inflation peaked at 11.1 per cent in October 2022.

“There is no question of the Bank unduly rewarding its staff,” the spokesperson added.

Oxford Street set for small shop revolution as council wages war on

OXFORD Street is set for a major revamp as Westminster City Council launches a new £10m scheme to transform London’s iconic high street.

The council will make shops vacated by illicit candy stores –

which have blighted the leading retail destination –available to small business owners rent free, and lower their business rates by 70 per cent.

For now, the scheme will offer nine units to businesses looking to launch their first store, with the first small firms expected to set up shop in August. The London Chamber of

Commerce and Industry (LCCI) said the programme would help increase footfall and provide tourists from across the UK and around the world with the “ultimate London shopping experience they are looking for”.

“We strongly back this great initiative by Westminster City Council to ensure that the capital’s

premier shopping thoroughfare continues to flourish with innovative and forward-looking brands,” James Watkins, head of policy at LCCI, told City A.M.

"During this cost of living crisis, it is critical that there are initiatives to help small businesses not just survive but thrive," Martin McTague,

Danni Hewson, head of financial analysis at AJ Bell, said the findings “essentially proved that the cybersecurity expert doesn’t have any skeletons in the closet.”

candy stores

head of the Federation of Small Businesses, told City A.M. “New brands will reinvigorate the West End… getting a chance to establish themselves in a space that would ordinarily be far outside their budget,” he said, adding it was a “great initiative” and that the model could be applied more widely.

TECH DARLING

LAURA MCGUIRE

JACK BARNETT

CEO Gustafsson hopes to move on

More needs to be done to revive London’s busy high streets

OXFORD Street is, despite the fact that most Londoners venture there only under the most extreme of Christmas present pressures, a literal shop window for the capital. That it has been recently taken over by garish American candy stores and knock-off vape shops is, therefore, less than ideal. The steps Westminster Council are taking, then, are welcome. Places matter. They matter for

STANDING UP FOR THE CITY THE CITY VIEW

the economy, and for the general health of an ecosystem. Walk through the City and, in certain areas where footfall was always lighter, it’s clear that more needs to be done to keep the Square Mile vibrant. Too many of Fleet Street’s shops are

vacant. There are, mercifully, things that can be done. The City Corporation is going out of its way to bring people in at nontraditional hours. Commercial landlords, too, need to take an innovative approach; it’s no doubt tempting to claw back any pandemic losses, and interest rates being as they are it mightn’t feel like the time to be thinking medium or long term about their sites, when cash through the door is the priority.

But placemaking creates value in the long run.

To see the proof, one can hop up to King’s Cross. Yesterday saw the 50th building on the oncedecrepit site given the green light by the council. In the meantime, this particular space has been used as everything from an estate agent showcase to an English sparkling wine bar. More could be done across the capital. Soho, for instance, was a delight in the first months after

SCRUBS UP VERY NICELY The plaque at the northern side of London Bridge gets its wash and clean up by a team of specialists from the Rupert Harris Conservation

Pay growth stays at three-decade high but inflation still stripping away wages

JACK BARNETT

PAY GROWTH is running at its fastest pace in over three decades and has remained unchanged for the second quarter in a row, in a sign the Bank of England may have to back a bigger interest rate hike again next month. New figures out from XpertHR reveal wages leapt six per cent in the three months to June, the same rate of increase as in the first three months of 2023.

It means XpertHR’s wage tracker has remained at its highest level since September 1991.

A five per cent wage settlement was the most common agreement in XpertHR’s survey. Nearly one in four workers received a pay rise of at least nine per cent over the second quarter. Only three per cent had their pay frozen.

The figures add to the growing body of evidence that indicate inflation is proving very sticky in the UK. Rising wages have been blamed for fuelling inflation, although ONS figures show pay growth has trailed price growth for more than a year and a half.

Sheila Attwood, XpertHR senior con-

tent manager, data and HR insights, said: “This month’s data serves as a stark reminder of how long employees have been struggling with the gulf between pay and the rising cost of living.”

“While pay awards are at their highest level since 1991, they continue to be outpaced by the UK’s high rate of inflation,” she added.

Wages tend to rise after inflation heats up due to workers responding to higher prices by demanding better pay to compensate for their loss of spending power. This can lead to inflation falling slowly due to businesses raising prices to offset higher fixed costs.

both lockdowns, with restaurants spilling onto the streets and a genuine cafe culture at play. Removing that has made London poorer.

Music venues need more help with licensing, not just for their own sake but for the pubs and restaurants nearby which benefit. Cities are ecosystems, and we need to constantly refresh them. London’s motto should very simply be more, more, more.

WHAT THE OTHER PAPERS SAY THIS MORNING

FRENCH UBER INQUIRY FINDS LOOPHOLES IN RULES

A French parliamentary investigation into Uber has concluded there are “serious flaws” in France’s system of governing the gig economy, with “gaping loopholes” in rules around transparency still in place.

THE TELEGRAPH DUTCH ‘TESLA OF E-BIKES’ GOES BANKRUPT

A Dutch electric bike manufacturer dubbed the “Tesla of e-bikes” has been declared bankrupt as the wheels come off the cycling boom. Amsterdamheadquartered Vanmoof has run out of road two years after raising funding.

THE TIMES

LOTUS LOSSES ACCELERATE AFTER SUPPLY PROBLEMS

Supply problems have put the skids under Lotus Cars, with pretax losses rising to £141.1m following a slump in the number of cars it could deliver. The Norfolk based sports carmaker sold only 576 cars in 2022.

Uplift in number of UK firms reaching ‘danger zone’

ANNA WISE

THE PROPORTION of UK-listed companies that issued profit warnings in the past year was higher than any year since 2008, outside of the pandemic, new analysis reveals.

It comes as higher borrowing costs and a tougher sales environment have weighed heavily on businesses.

Companies listed on the London Stock Exchange issued 66 profit warnings between April and June, EY-Parthenon has reported.

The figure marks the highest second-quarter total in three years,

when warnings hit 166 in 2020.

Moreover 17.9 per cent of all UKlisted firms have lowered their profit expectations in the past year, the highest proportion (bar the Covid years) since 2008’s financial crisis.

Businesses are coming up against high levels of inflation and rising interest rates, which has made it more expensive to borrow.

There was also an uplift in listed companies issuing multiple profit warnings, with 36 companies entering the three-warning “danger zone” in the last year, EY-Parthenon said.

THE GUARDIAN

Liontrust locked in GAM takeover battle with rival

CHARLIE CONCHIE

A TAKEOVER battle has erupted over ailing Swiss fund manager GAM yesterday as a consortium backed by telecoms mogul Xavier Niel launched a counter bid to London-listed Liontrust.

Liontrust struck a £96m deal to buy the Swiss firm earlier this year but the consortium NewGAMe, which controls approximately 9.5 per cent of the issued share capital of GAM, has pushed back on the proposal aggressively.

The firm has formally tabled a bid to snap up some 28m GAM shares, representing around 17.5 per cent of the firm’s issued share capital, at 49p per share.

The offer marks a 29.1 per cent premium on the value of the Liontrust offer and a premium of 31.9 per cent on the closing price of the GAM

shares on 17 July.

“The announced offer gives a partial exit to shareholders who are concerned by the absence of an alternative to Liontrust’s inadequate offer,” Albert Saporta, director of NewGAMe, said.

“As GAM’s second-largest shareholder, we are convinced there is a significant upside associated with the successful restructuring of the company and are confident that GAM shareholders are better off remaining invested in the company,” he added.

NewGAMe slammed Liontrust for “grossly” undervaluing GAM and said its offer was “subject to execution contingencies, which make it highly unattractive”. GAM has been on the ropes and has seen its assets more than halve since 2018 to CHF68bn. Liontrust declined to comment.

Zurich-based GAM was founded in 1983.

The committee behind the initiative hopes it will make the City greener

Back to black? City of London adopts new guidance on lights

LUCY KENNINGHAM

THE CITY of London yesterday adopted a new initiative to cut back on light pollution in the Square Mile. The City’s Planning and Transportation Committee agreed to ‘The Lighting SPD’ which will require developers to include light pollution alleviation plans in the early stage of a planning application.

THAMES WATER INVESTOR SLASHES STAKE BY £300M

Thames Water’s biggest investor slashed the size of its stake, renewing concerns over the financial stability of the utilities giant as it scrambles to raise equity from shareholders.

The Ontario Municipal Employees Retirement System (OMERS), one of Canada’s largest public sector pension funds, slashed the value of its stake in Britain’s largest water supplier by almost £300m last year, according to the Financial Times. The pension giant owns a 31 per cent stake in Thames Water via parent company Kemble Water. This was held through multiple investment vehicles including a Singapore-registered entity, Omers Farmoor Singapore PTE, which owns about a fifth of the company.

UK JAGUAR LAND ROVER PLANT TO BE ANNOUNCED

The committee’s chairman Shravan Joshi said: “The Lighting SPD will make the City more characterful and a more attractive place to visit at night, celebrating its heritage.” He added it would also deliver “a sustainable response to urban lighting that takes into account energy efficiency [and] carbon reduction, making the City safer for all communities”.

The government is reportedly on the cusp of securing a long-term commitment from Tata Group to build a new battery plant in Somerset that would supply a new range of electric Jaguar and Land Rover models. Tata could outline its decision as soon as this week, according to Bloomberg, which would be seen as a significant win for Downing Street as it looks to boost its electric vehicle ambitions.

This follows media reports from the BBC earlier this year that the UK had won the race for the factory against European rivals.

Hargreaves Lansdown chair to step down after run in with founder

CHARLIE CONCHIE

THE CHAIR of retail investment platform Hargreaves Lansdown is set to step down after a bruising series of run-ins with the firm’s founder.

In a statement the Bristol-based DIY investing outfit said that it had begun scouting out “successor chair candidates” for Deanna Oppenheimer, who has overseen the firm since 2018.

News of the impending exit

comes after a series of spats between Hargreaves Lansdown’s founder Peter Hargreaves, who still owns some 20 per cent of the firm, and the current management over the direction of the company.

Hargreaves has labelled Oppenheimer’s time at the top a “disaster” and has slammed the strategy pursued by chief Chris Hill.

Shares in the DIY investment outfit have cratered some 60 per cent in the past five years.

The firm said that as it prepares

Ocado’s share price leaps up despite losses

LAURA MCGUIRE

PRE-TAX losses at Ocado have widened to £289m in the first half of the year, but the tech firm’s share price shot up on signs of progress in its retail arm.

The supermarket technology business said its retail arm — which is a joint venture with M&S — grew five per cent to £1.17bn as it returned to profitability during the quarter.

The middle class favourite introduced a series of Tesco price matching schemes which attracted customers amid the cost of living crisis.

Its technology division, which licences supermarket warehouse technology to other retailers also made a profit with revenues rising 58.9 per cent to £1.98bn.

Those signs of progress lifted the share price by more than 15 per cent, despite some analysts balking at the first half losses.

Chief Tim Steiner said: “At a group level, I am pleased to see the operational and financial discipline delivered by all our teams as we focus on driving cost efficiencies and cash flow improvement. “For these rea-

sons, we look forward to delivering the full potential of the business and continuing to create lasting value for all our stakeholders.” Its share price also rocketed last month when it was rumoured that Amazon was eyeing a takeover of the brand.

Richard Hunter, Head of Markets at interactive investor, said: “Ocado continues to make somewhat laboured progress, with increasing revenues unable to prevent another loss for the period.”

Depreciation and exceptional items were the main culprits in widening the pre-tax loss for the half year to £289 million from a previous £211 million, a deterioration of 37 per cent.

Ocado has had a long and bumpy ride as a listed entity. It was founded in 2000 by a trio of ex-Goldman Sachs bankers, starting life as part of a partnership with Waitrose.

It listed in 2010 in an IPO that raised over £200m. Its shares soared in value during the pandemic but have since fallen back in value.

Chris Beckett, head of equity research at Quilter Cheviot, said “ultimately, Ocado is akin to an early stage tech company.”

to welcome new chief executive Dan Olley from Tesco it was right to explore a change for the chair role.

“Recognising that the AGM on 8 December 2023 will be her sixth as chair of the board, and with the CEO transition successfully underway, aligned with good governance and succession planning practices, the board has commenced an exercise to determine the attributes of any successor chair candidates,” Hargreaves Lansdown said.

OCADO SHARE PRICE: WHAT GOES UP...

McDonald’s UK apologises for harassment

AUGUST GRAHAM

THE BOSS of McDonald’s in the UK has apologised after more than 100 workers at the fast food chain, past and present, alleged they had been sexually harassed or assaulted or subjected to racism or bullying.

Alistair Macrow told the BBC the company had “fallen short” in some cases after the corporation spoke to dozens of workers.

Source: LSEG

Tech whizzkid with unlimited potential or loss-making grocer? Nobody is quite sure which online basket to put Ocado in, more than two decades after the firm was founded. There were signs in the results that the firm is, genuinely, on the way to profitability. But losing more than a quarter of a billion quid in one quarter, no matter how much of that you put down to depreciation and one-off events, is still an unusual way to progress towards breaking even.

The bull case is thus: Ocado’s technology and distribution centre

model could, in theory, be rolled out across a host of other sectors, underpinning a global grocery industry and plenty else besides. The bear case is that we’re not exactly on the cusp of an online shopping revolution –it’s been here for a few years, and actually turning a profit seems to be beyond Ocado despite the most helpful of tailwinds. Ocado has always been a jam tomorrow stock, but at some point even jam stops tasting sweet. AS

It comes four years after 1,000 women reported they had been subjected to sexual harassment and abuse while working at McDonald’s restaurants, according to the Bakers, Food and Allied Workers’ Union. The claims published by the BBC on Tuesday bear a close resemblance to what the union reported in 2019. Both say that managers failed to act on some complaints, and that predatory employees were moved to different McDonald’s sites rather than being fired.

In a story which follows months of investigations by the BBC, the corporation revealed on Tuesday that a worker in his late 30s had called a 17-year-old colleague a racial slur and asked to show her his penis.

Another 17-year-old girl said a senior manager had choked her and grabbed her bottom. These are just some of the claims from dozens of people to whom the broadcaster has spoken since February when McDonald’s signed an agreement with the equality watchdog. PA

Network Rail fell to £1.1bn loss after a ‘deeply bruising’ year of strikes

HENRY SAKER-CLARK

NETWORK RAIL tumbled to a £1.1bn loss for the past year as it was impacted by strike action and higher interest payments on its debts.

The body, which owns and manages the infrastructure of most of the UK’s railway network, saw losses grow for the year to 31 March

from a £324m profit in the previous year.

It said this was primarily linked to increases in the value of inflationlinked bonds previously issued to fund the railway. Higher inflation levels meant significant increased interest payments on these debts.

It came as the body also reported that revenues grew to £10.01bn for

the year from £9.55bn a year earlier. This comes after Greater Manchester mayor Andy Burnham and four other regional mayors said they planned legal action over the closure of almost 1,000 ticket offices.

Andrew Haines, chief executive of Network Rail, said: “For our railway the last year will be remembered for one issue almost exclusively, strikes.”

Network Rail manages and owns the infrastructure of most of the railway network

Shares in the company have slumped in the last five years

Revolution chief and chair quit in Boohoo deal

LAURA MCGUIRE

THE ROWbetween Revolution Beauty and Boohoo may finally be nearing an end, with a settlement reached including the departure of the former’s chief exec and chair.

Revolution’s boss Bob Holt and chair Derek Zissman will leave, but Holt will remain as interim boss until the end of August 2023.

Revolution’s share price spiked seven per cent on the news due to the prospect of a more stable situation.

As part of the agreement, Boohoo has withdrawn its demand for a general meeting, which it had previously threatened.

Boohoo, which has a

7.7%

26.6 per cent stake in Revolution, kicked out Revolution’s CEO, CFO and chairman with a majority vote in June only for them to be reinstated almost instantly by an independent director. The general meeting on 7 August this year will still take go ahead, the board intends to indefinitely adjourn the meeting pending the approval of shareholders. This decision is expected to pass, considering Boohoo’s sizeable stake in Revolution. The compromise depends on the completion of the BH Agreement between Bob Holt and the company, expected to happen in the coming days. Revolution will soon start hunting for a new chief executive with extensive experience in the beauty, retail, and consumer brands sectors.

Budget supermarkets pump up market shares

LUCY KENNINGHAM

COMPETITION for market share amongst the UK’s supermarkets remains hot as budget operators increase their slice of the pie. According to new data released by Kantar, Aldi was the fastest-growing grocer, reporting sales figures up 24 per cent last month. It now holds 10.2 per cent of the market share, up from 9.1 per cent a year ago.

Likewise fellow budget supermarket Lidl increased its market share up 0.7 per cent to 7.7 per cent, with sales up 22.3 per cent.

Sainsbury’s market share rests at 14.9 per cent, behind Tesco at 27 per cent and ahead of Asda, which came in third at 13.6 per cent. The figures come as price inflation amongst grocery items sees its biggest monthly drop since the peak — although it still remains

“incredibly high”, said Fraser McKevitt, head of retail and consumer insight at Kantar,. “The boost to promotional spending has contributed to bringing inflation down but this isn’t all that’s driving the change. Prices were rising quickly last summer so this latest slowdown is partially down to current figures being compared with those higher rates one year ago”, he continued.

BENNETT ON BUSINESS

Deal leaks are part of the City’s plumbing

AFEW DAYS ago my firm, H/Advisors, published a survey about leaks, the financial information kind rather than plumbing mishaps. We analysed every deal in the world over $2bn last year, all 267 of them, and looked at which ones had been leaked into the media before they were officially announced.

The results are a testament to the tenacity of journalists (especially that one-man scoop machine Sky News City editor and City A.M. columnist Mark Kleinman) as well as the chatty habits of the deal community. In all, 35 per cent of all deals in the world leaked before their time, despite all the work done by regulators over the years to crack down on this. Some regions were leakier than others –notably Europe and the UK, where almost half of all the 60 deals in 2022 hit the media before they graced the RNS ticker. What are we to make of all this?

Let’s be clear, this is no accident –accidental deal leaks almost never happen (although I did once, only once, read all about an interesting merger upside down in a train carriage weeks before it was

REAL REFORM NEEDED

announced, because the CFO was silly enough to read the papers in plain sight). In 99 per cent of cases people leak because they want the information to get out.

In the report we identified a number of categories of leak. These include, the Negotiation Leak, where one side wants to put the target ‘in play’ or a target wants to conjure up an auction. Then there is the Malicious Leak where a competitor might leak to scupper a deal. There is also the Relationship Leak, when someone wants to do a favour for an influential journalist. There is finally the Announcement Leak, a ‘day-before’ leak with the hope of favourable coverage.

Of course, the other question people asked is ‘who leaked’? Most times we will never know since both journalists and their sources are good at covering their tracks. The real lesson is that all companies should prepare for when, not if, a deal they are working on might leak. And that we should all pay close attention to the financial media since it still has the ability to disrupt even the smoothest corporate plans.

Pity poor our Chancellor Jeremy Hunt, forever trying to balance competing interests with very few resources. Last week’s grandly-titled Mansion House Reforms were a case in point. On the one hand he wants to boost pension returns; on the other he wants to stimulate the somnolent London Stock Exchange; on the other other hand he needs to ensure that the government still has ready buyers for the vast swathes of gilts it keeps issuing. The result was an

£ If the Chancellor really wants to make himself popular, he could consult with the Corporation of London on something that really does need reform –the Mansion House dinner itself.

Every year the Corporation corrals the good and the great into a black-tie dinner to listen to long speeches that have already been leaked and trailed in the media. And it’s held on a Monday evening. The whole thing feels distinctly 19th century

Our regular columnist Neil Bennett, global co-CEO of H/Advisors, on the latest in the City

announcement that pension funds can henceforth invest up to five per cent in private assets. Two problems. One, the code is voluntary. Two, most well-run pension funds should be looking at that level of asset diversification anyway. So it appears to be another large announcement with rather less substance to it. The clue was in the press release –why did the Chancellor feel he had to quote no fewer than 17(!) financial and business luminaries supporting the proposal?

when we are already almost a quarter of the way through the 21st.

If the City is really a modern financial centre, it should rethink the whole thing. Live stream it perhaps from a more relevant venue? Introduce an element of interactivity and make it less screamingly elitist? Nicholas Lyons, the current Lord mayor, is smart enough to recognise the dreary anachronism of it all. Perhaps he will take action before his term ends.

CAN I QUOTE YOU ON THAT?

up for a cage fight if he is, lol

Elon Musk challenges Mark Zuckerberg to a scrap. Who needs Tyson Fury?

Most business podcasts are cringeworthy and should be subtitled ‘why I am so successful’. David Senra’s Founders is different –the narrator gleans business lessons from an eclectic mix of historic and modern-day figures, from Napoleon to Walt Disney to Michael Jordan and James Cameron. It is like Forrest Gump’s box of chocolates –you never know what you are going to get.

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Pret A Manger back to profit after five years

LAURA MCGUIRE AND STAFF

PRET A MANGER has announced an annual profit for the first time since 2018 thanks to a successful international push and its revamped coffee subscription service.

The high-street favourite recorded revenues of £429.9m, growing by 20.2 per cent  compared to the same period in 2022 when it reported a loss of £226m. Its last profitable year in 2018 made the hospitality chain profits of £19.6m.

Part of Pret's success is due to international growth. With 600 outlets worldwide, just 25 per cent of these are UK based. It now operates shops in 15 markets from Ireland to Hong Kong.

The franchise has expanded into new markets like India, where it opened its first site in the financial district of Mumbai in April.

A revamped subscription service has proved more popular than the original. Earlier this year, the cafe said that it would increase the price of its loyalty

Countdown on for Microsoft and Activision to extend deal deadline

JESS JONES

scheme ‘Club Pret’ by five pounds to £30, but fans would get a 10 per cent discount on food — on top of five ‘free’ coffees a day.  Pret A Manger also said digital transactions accounted for 42 per cent of transactions during the first half of the year, up from 40 per cent in December, as some 650,000 punters downloaded the loyalty app.

In response to the cost of living crisis, Pret also hiked its team's salaries, saying it would raise pay for its worst-paid staff from £10.30 an hour to £10.60 an hour. It has given its UK staff three pay rises in 12 months.

“It’s been three years of transformation at Pret, in which we’ve evolved into a truly global, multi-channel brand, and emerged as a stronger business than we were in 2019,” Pano Christou, Pret’s chief executive officer, said.

“We’re focused on continuing to grow, while constantly innovating to bring Pret’s freshly made food and organic coffee to brand new places, from Bishop’s Stortford to Bradford and from Italy to India,” he continued.

TIME IS ticking for Microsoft and Activision Blizzard, which are reportedly in discussions to extend the deadline for their proposed multi-billion pound tie up. Originally set to be closed yesterday, the deal may now require more time as the two tech companies work to address

Picture is ‘bleak’ for business as insolvencies rise again in June

CHRIS DORRELL

INSOLVENCIES increased again in June as businesses continued to struggle under the weight of rising costs and falling customer demand.

According to new figures from the Insolvency Service, there were 2,163 insolvencies in June. This was down on last month’s record figure of over 2,500, it was still 27 per cent higher than last year and above pre-pandemic levels. The bulk of insolvencies were

creditors’ voluntary liquidations, up 21 per cent year on year to 1,759.

There was also a 77 per cent surge in compulsory liquidations year on year, bringing the monthly total to 260.

Jeremy Whiteson, partner at UK law firm Fladgate, said this increase was a “worrying trend”.

Inga West, counsel at law firm Ashurst, said: “Businesses that levered up on low interest rates will need to adjust their business models to cope with a period of higher interest rates.”

regulatory concerns, according to sources close to Reuters.

Microsoft may need to pay a $3bn (£2.3bn) fee to Activision and renegotiate the terms of the deal.

Microsoft and Activision did not immediately respond to City A.M.‘s request for confirmation of the news.

The deal has already been approved by watchdogs in the EU and the US.

But the UK’s Competition and

Markets Authority is seeking modifications to ensure that competition in the cloud gaming market remains unharmed. It agreed last week to give Microsoft and Activision more time to restructure their deal before the regulator reaches its final decision. It comes after Sony signed a decadelong deal with Microsoft to keep Call of Duty on their Playstation console.

IT’S TIME TO UPDATE THE SYSTEM

1. European financial institutions are an essential part of the traditional financial system, but many rely on aging technology invented before the internet that isn't best serving them or their customers. Crypto can help make the system faster, safer, more transparent, and more equitable –for everyone.

3. 66% of crypto users live in the developing world, often in places where the current system fails to meet their needs. Here in the UK, 1.3 million people are unbanked and can face high fees to use their own money. Crypto can offer people a cheaper, more efficient way to participate in the economy.

5. Crypto remittances in the UK reached $33 billion according to 2021 estimates from the World Bank, demonstrating the crucial importance of crypto technology and international transfers. Traditional financial services can be slow and expensive, while crypto transactions may offer a more efficient, transparent, and nearly instantaneous alternative.

2. A recent consumer survey suggests that the British people have made it clear they want an update. 22% of all adults in the UK hold some form of crypto, joining the ranks of over 400 million crypto users around the world. If crypto users were a country, they would be the third largest nation by population in the world.

4. Crypto makes money portable — and much more accessible. At the beginning of the war in Ukraine, banks shut down and ATMs ran out of cash. With few ways to access crucial funds, Ukrainians turned to crypto to take back control of their financial freedom. Crypto is 24/7 and always with you.

6. Crypto isn’t going anywhere. Widespread adoption has already begun, and the UK and the EU are quickly positioning themselves as industry leaders. Landmark regulations aim to create stable, healthy environments for important crypto innovation to flourish. This technology can help update aging financial infrastructure, giving customers more financial freedom and institutions new tools to drive innovation.

CITY WOWS The historic Bartholomew Fair returns to the City of London this autumn

THE CITY of London Corporation has announced that Bartholomew Fair, historically one of London's pre-eminent summer charter fairs, will launch in September. The event is set to include dance, music and aerial choreography.

Christou has praised Pret’s “sustainable” growth

Arbuthnot share price jumps after profits leap from £3.4m to £26.4m

CHRIS DORRELL

ARBUTHNOT Banking Group’s pretax profit soared in the first half of the year as rising interest rates helped it record a huge increase in profit.

Pretax profit multiplied to £26.4m in the six months to June, up significantly from the £3.4m it recorded last year.

On the back of this it upped its interim dividend to 19p compared to 17p last year. Shares rose 18 per cent higher on Tuesday to 1120p at the close of play.

The historic private and commercial

bank has benefitted significantly from the Bank of England’s interest rate hikes, which have increased revenue on both Arbuthnot’s lending and its excess liquidity.

But chief operating officer Andrew Salmon said “this isn’t just higher interest rates”. He argued that the bank was in a significantly stronger position from five years ago, when it sold its stake in Secure Trust Bank.

Since then it has deployed the capital from the sale to grow. “This business has grown substantially. It now deploys

Morgan Stanley slumps as Bank of America soars

THE CONTINUED lull in dealmaking hit Morgan Stanley’s profit despite a strong performance from its wealth management arm, while rising rates lifted Bank of America.

Income at Morgan Stanley, which specialises in investment banking, slipped to $2.2bn in the second quarter, down from $2.5bn the year before but in line with analyst expectations. This fall reflected the persistent lull in dealmaking due to the challenging economic backdrop as well as an increase in compensation costs relating to employee severance packages.

This caused revenue from the institutional securities arm, which houses Morgan Stanley’s investment banking and trading businesses, to fall eight per cent to $5.5bn.

Although investment banking revenue remained fairly consistent, its trading revenue slumped as a result of lower market volatility compared to last year. Equities revenue was down 14 per cent while fixed income was down 31 per cent.

Morgan Stanley’s wealth management arm performed strongly, increasing revenue 16 per cent to $6.7bn

largely thanks to rising interest rates. The bank has been attempting to enhance its wealth management offering to diversify its revenue streams.

Analysts at UBS said Morgan Stanley’s performance was “surprisingly solid in [a] challenging environment”.

Chair and chief executive James Gorman said: “The firm delivered solid results in a challenging market environment. The quarter started with macroeconomic uncertainties and subdued client activity, but ended with a more constructive tone.”

Bank of America also announced quarterly earnings on Tuesday, beating expectations to become the latest US bank to be lifted by rising interest rates.

Chair and CEO Brian Moynihan said: “We delivered one of the strongest quarters and first half net income periods in the company’s history.”

Profit climbed 19 per cent to $7.4bn, or $0.88 per share. This was higher than analysts had predicted. The increase came primarily thanks to a 14 per cent rise in net interest income.

But analysts at UBS warned that Bank of America’s interest margin might lead to worse performances over the rest of the year.

about five times more capital than it had six years ago. That’s a huge increase,” Salmon said.

In particular Arbuthnot has grown its offering to small businesses.

“We’re definitely the beneficiary of the bigger banks trying to industrialise how they deal with SMEs,” Salmon said. Arbuthnot saw a 16 per cent increase in customer deposits over the period, with chair Sir Henry Angest commenting “the strength of a bank should be measured against the quality of its deposit base”.

Income gap being checked by high taxes

JACK BARNETT

THE RICHEST households in Britain earn nearly four times as much as the poorest, although government tax and benefit spending has kept income inequality in check in the UK over the last year, according to official figures.

Top earners made £83,700 last year, 3.8 times higher than the £22,300 average final income of the least well off in the UK, according to the Office for National Statistics (ONS).

Income inequality between the highest and lowest earners in Britain has reduced over the last year. In 2021, top earners’ income was four times greater than the bottom earners.

Wealthier Brits paying more tax and receiving less in benefits helped narrow income inequality last year. Before taxes and benefits, top earners made on average £117,500, 14 times higher than the £8,200 booked by the poorest fifth in the country.

Government spending on things like the National Health Service, education, free childcare and transport relief helps poorer households pay for basic necessities. These categories are known as “benefits in kind” and give households an effective income boost by the state shouldering some of their potential expenditure. They are mainly funded from taxes.

Wise makes more interest rate hay as its income surges by 66 per cent

CHARLIE CONCHIE

WISE, the money transfer firm, said the amount of interest income it was raking in on customer balances has continued to rise after it made hay from rising rates last year.

In a trading update , Wise said balances in its customers’ accounts had grown to £11.5bn in the first three

months of its financial year while the gross interest income yield it was making on that money had topped 3.4 per cent, up from 2.8 per cent in the previous quarter.

Income for the firm rocketed 66 per cent in the period to £310.9m while revenues jumped by nearly a third to £239.5m. Wise has felt the lift of rapid rate hikes over the past 12 months as

the Bank of England has hiked rates to cool rampant inflation.

In its full year results at the end of June, the London-listed fintech firm said profits had surged from £43.9m in 2022 to £146.5m in 2023 on the back of an interest income surge.

Wise also said it had notched a 33 per cent uptick in customers to 6.7m in the first quarter of the year.

CHRIS DORRELL

Arbuthnot was founded in 1833

SOUND FAMILIAR? TNT Sports, the new name for BT Sport, launched yesterday

TNT SPORTS is to be streamed on Discovery+. The rebranding follows a deal last year between BT and Warner Bros –customers with access to the BT Sport app will be able to view TNT until the app shuts later this year.

THE NOTE BOOK

Wall Street in focus –and it’s looking good

THIS WEEK US earnings season takes centre stage, shining a light on the strength of corporate America. It will help investors find clues about the outlook for the US economy and markets at a potentially pivotal moment for both.

It is no secret that as central banks battle to get to grips with the postCovid revival of inflation, higher interest rates are causing pain for mortgage holders, indebted businesses, pensioners and other pockets of the economy. And after a stellar first half, monetary tightening is prompting increased bearishness among market strategists.

But taking the financial sector in isolation, the story is very different.

The first half has been extremely tough with the unexpected banking crisis brought about by the collapse of three mid-sized US banks. But the clouds are starting to part, with the crisis under control and rising interest rates providing a tailwind to banks’ earnings potential.

This was laid bare by earnings released so far this week –JP Morgan reported a 67 per cent surge in second quarter net income to $14.47bn, outpacing analysts’ forecasts thanks to a 44 per cent jump

A LITTLE LUX WOBBLE

in net interest income, the fifth consecutive quarter of double-digit gains. It was a similar story from Bank of America with CEO Brian Moynihan saying “we delivered one of the strongest quarters and first half net income periods in the company’s history”. Bank of New York Mellon also enjoyed a 33 per cent surge in quarterly net interest revenue to $1.1bn. Rising yields have encouraged many investors to turn their attention back to bonds instead of equities. But banking stocks are preserving their allure, thanks to the ability to earn more from loans and other assets as dearer borrowing becomes the new norm.

Of course, the banking sector isn’t entirely shielded from the macroeconomic headwinds with the sluggish growth backdrop causing lenders to up their provisions against potential bad loans. Plus, there are concerns about a slowdown in consumer spending and weakness in commercial real estate. But the banks remain largely optimistic with Jamie Dimon, JP Morgan’s CEO saying “the US economy continues to be resilient” and the Dow Jones US Banks Index is up around five per cent already since the end of June.

Where interesting people say interesting things. Today, it’s Victoria Scholar, head of investment at interactive investor

SUMMER READ WITH A BIG HEART

Shares in Richemont, which owns brands like Cartier, slumped to a five-month low after the luxury conglomerate reported a drop in quarterly sales in the Americas region. There are also concerns about a slowdown in the world’s second largest economy China. Richemont’s disappointing sales sent other stocks in the sector like LVMH lower as well. The luxury sector had a strong start to the year pushing LVMH to a record high in April. However, it has since pared gains amid China’s bumpier-than-expected postCovid recovery.

£ The Resolution Foundation said rising interest rates have wiped £2.1trn away from household wealth in Britain. Total household wealth suffered the biggest fall in share of GDP since World War II. Older people have been hit harder with rising yields and falling bond prices reducing the value of pension assets. Meanwhile the report suggests younger people could stand to benefit from falling house prices by reducing the average number of years it takes to save for a 10 per cent deposit.

UK sure private investors will back Sizewell C

NICHOLAS EARL

BRITAIN’s nuclear ambitions will find support in the private sector, Grant Shapps said yesterday as he laid out plans for a new industry body.

The energy security secretary told reporters that he understood proposed nuclear power plant Sizewell C was receiving good feedback from potential investors.

“We said we would go out to the market and everything from our side is progressing nicely. I can tell you we are getting strong market interest as well. Those conversations are ongoing, and you will need to watch this space,” he said.

Shapps admitted there was little material change from the position outlined last November, when the government confirmed £700m in funding support for Sizewell C, which awaits a final investment decision from operator EDF before construction commences.

EDF and the government both currently hold 50 per cent stakes in the nuclear development and have been working in concert to coax private investors for funding to support the later development stages of the proposed project.

Earlier this year, there had been media reports Sizewell C had been struggling to attract domestic financial

backers such as pension funds and institutional investors.

Shapps’ comments follow him launching GB Nuclear (GBN) this morning, the government-backed group which will focus on shortlisting sites and sanctioning new projects.

He is eager to reverse the “colossal mistake” of failing to build new nuclear plants for nearly thirty years, and believes the UK can lead a “renaissance” on nuclear energy.

The government minister argued that the developer-led approach of the past had shown itself to be unsuccessful and that “arms-length” support from the government was now necessary to revive its flagging role in the country’s energy mix.

This comes with the government targeting a more than trebling of current nuclear generation from 7GW to 24GW over the next three decades, making up 25 per cent of the country’s energy mix — with 85 per cent of the incumbent fleet set for decommission by 2035.

“Having GBN is helpful as it is an organisation that wakes up every day to deliver this programme. We know we must both replace a descending amount of power through nuclear, but also the security we want through nuclear power, so there’s great incentive in the system which will give investors even greater confidence,” he said.

£ New home sales in London have slumped to an 11-year low.

According to Molior London data seen by Bloomberg, just 3,000 new homes were sold between April and June in the capital compared to a population of 8.9m. That represents the weakest quarter since 2012, even worse than the second quarter of 2020 at the height of the Covid-19 pandemic when 3,855 homes were sold. Rising mortgage rates have dented property demand when overseas sales from Hong Kong also declined.

CAN I QUOTE YOU ON THAT?

Mike Mayo, analyst at Wells Fargo

Everything’s Fine is a novel about a black, liberal, Ivy Leagueeducated girl called Jess who begins her career at Goldman Sachs in New York. She works alongside her former classmate Josh who is also an analyst but has completely opposite conservative political opinions. The book is ultimately a love story but documents the trials and tribulations of working in the world of finance, which Jess struggles to navigate, particularly with the additional challenges brought about by her race and gender with her experiences of subtle discrimination described so well throughout the book. Jess’s father is another key character in the book who is from a completely different world to the riches of Wall Street and is her guiding moral compass but not without his own major life complications.

The Rio Tinto boss said the West now had a “more positive attitude” towards mining

West is now awake to the critical minerals race, says Rio Tinto boss

NICHOLAS EARL GOVERNMENTS across the western world have woken up to the urgency of securing essential metals and minerals needed to reach net zero, Rio Tinto’s chief executive has said.

Jakob Stausholm told the Financial Times that China remains ahead of the UK and its allies in having integrated supply chains for many minerals, but that a more positive attitude in the West has been developing towards mining.

He said that China was in a good

position because “they have planned for it”.

“Mining ultimately comes down to societal choices... in a number of western countries it has been very difficult to get permits for mining. But there’s a lot of dialogue these days on how to shorten the permit processing,” Stausholm said.

“People realise there is a need for it. You will simply not be able to build a new-energy system and reduce the world’s CO2 emissions without getting sufficient access to a number of minerals,” Stausholm said.

NICHOLAS EARL

THE PRICE of silver has held steady in trading this week as investors believe that the US Federal Reserve’s inflation fight is coming to an end.

The precious metal was trading at $24.93 per ounce yesterday morning, dipping only slightly from the highs touched at the end of last week.

This comes after encouraging inflation data from the US raised hopes the central bank will only raise interest rates one more time this year, which is currently set at 5-5.25 per cent after chair Jerome Powell signed off on 10 interest rate hikes since March 2022 .

The easing of interest rate hikes, which typically weigh down precious metals as it makes stocks and government bonds more attractive to investors, has enabled prices to be powered by strong fundamentals.

“Assuming the rate hike is taken in silver’s stride, then the price can continue pushing on above $25 and achieve a fresh high for the year,” Rupert Rowling, market analyst at Kinesis Money, said.

Silver demand has outstripped supply since 2019, which has only been exacerbated by its role in future-facing technologies.

It is a significant material in solar panels, with companies turning silver into a paste which later is used for contact strips as an electrically conductive material, while electric car batteries also depend heavily on silver.

JP Morgan is like the LeBron James of banking. They’re good not only at defence, they’re good at offence

Silver price sits steady as rate hike fears ease

Conservatives heading for triple by-election loss, bookies predict

JESSICA

THE CONSERVATIVES are tipped for a triple by-election loss this week as they prepare to do battle in three Tory seats, bookies have predicted. Voters in Uxbridge and South Ruislip, Selby and Ainsty and Somerton and Frome will head to the polls this Thursday to select new MPs. Ballots are expected to be an electoral benchmark ahead of what could be a disastrous general election for the Conservatives next year.

Several betting firms have revealed Rishi Sunak’s party is heavily tipped to lose all three seats to Sir Keir Starmer’s Labour or Sir Ed Davey’s Liberal Democrats. Bookies William Hill has said the Tories are currently on 2/9 to see Somerton and Frome, Uxbridge and South Ruislip and Selby and Ainsty all fall to either Lib Dems or Labour.

Lee Phelps, spokesperson at William Hill, said: “It is anticipated to be a dreaded triple by-election for the Conservatives on Thursday, with

Sunak’s party expected to lose three further seats from their everdecreasing majority.”

The Conservative’s popularity has suffered amid public sector strikes, the cost of living crisis and the failure to stop illegal migration across the Channel. Starmer also secured 1/5 odds to be the next Prime Minister, with Sunak on 6/1.

The Conservatives and the Labour Party have been approached for comment.

GUEST OPINION

Evans CEO, King’s Cross

OVER 17 years, 8m square feet of built development and 12 hectares of public realm have been approved at King’s Cross. Receiving unanimous approval for the 50th and final building on the masterplan is a landmark moment for the estate and represents yet another vote of confidence in its success so far and its future ambitions.

Last piece of King’s Cross jigsaw approved by council

THE LAST of the 50 buildings that make up the King’s Cross redevelopment was approved by

Camden council yesterday. It comes 17 years after the project to renovate and redevelop the area behind King’s Cross and St Pancras station was first dreamt up by

architects and developers. In that time firms including Google and Universal Music have moved into the space, along with a host of retailers in Coal Drops Yard.

The last building to be green-lit, Building F1, will be a seven-storey building on the canal, replacing a temporary catering and sales space above Victorian railway tunnels.

What was an underused industrial site has been transformed and rejuvenated with new public spaces, homes, shops, offices, galleries, bars, restaurants, schools and a university. The location, the connections, the canal-side setting, the heritage, an eclectic cultural scene, a thriving business cluster and a strong sense of local community all come together to make King’s Cross truly special.

This final building will mark the completion of the estate. By 2024, it’s estimated that 42,000 people will be living, working and studying in King’s Cross, which is home to some of the most innovative global companies, 1,750 homes and 100 shops, bars and restaurants, all set around 10 world-class public spaces.

Bosses from Natwest, Shell and Sainsbury’s join PM’s new taskforce

JESSICA FRANK-KEYES

TOP BOSSES from firms including Barclays, Aviva and Shell have joined the government’s new business council for supercharging growth.

Prime Minister Rishi Sunak chaired the first business council meeting at No10 yesterday, followed by a glitzy reception for scores of industry

bigwigs to celebrate UK enterprise.

CEOs including Alison Rose of Natwest and Barclays boss CS Venkatakrishnan said they were “delighted” and “honoured” to be part of the project, which hosts a total of 14 major chief executives.

Top of their agenda will be action to boost investment, support innovation, encourage skills and talent

development and grow the economy, No10 said.

Sunak said: “The more businesses innovate and invest, the more we grow and create good jobs right across the country.

The committee is made up of bosses from across a range of sectors, from construction, life sciences and tech to financial services and energy.

JAMES SILVER

The government’s new business council met for the first time yesterday

FRANK-KEYES

Labour are campaigning hard in former PM Boris Johnson’s constituency of Uxbridge

Robert

Last building marks a real triumph for the capital

CITY DASHBOARD

YOUR ONE-STOP SHOP FOR BROKER VIEWS AND MARKET REPORTS

LONDON REPORT BEST OF THE BROKERS

To appear in Best of the Brokers, email your research to notes@cityam.com

LOST AND WITH NO DIRECTION

Ocado drags FTSE 100 into black as markets brace for inflation data

LONDON’SFTSE 100 squeezed out gains yesterday that have pushed it back into the black in 2023, propped up by shares in Ocado soaring after a solid set of results.

The capital’s premier index jumped 0.64 per cent to 7,453.68 points, while the domestically-focused mid-cap FTSE 250 index, which is more aligned with the health of the UK economy, leapt 1.16 per cent to 18,618.22 points.

The list of shares in Britain’s largest companies managed to just about keep its head above water in 2023 largely due to middle-class favourite Ocado kicking more than 12 per cent higher. So far this year, the FTSE 100 is up 0.03 per cent, a big climb down from February when it reached a record high of over 8,000 points.

Ocado said it has swung back to profit, with its underlying measure of

earnings hitting £16.6m, up from losses of £13.6m a year earlier.

The online supermarket’s share price is now up in 2023. It had been one of the worst performers on the FTSE 100.

FTSE 250-listed Marks and Spencer closed up four per cent in Ocado’s slip stream.

A reason Ocado’s shares underperformed over the last year was consistent failing to meet its potential.

Markets are gearing up for a crucial set of new inflation data from the Office for National Statistics.

The City thinks the rate of price increases trimmed to 8.2 per cent in June from 8.7 per cent.

Numbers yesterday showed food prices rose 14.9 per cent over the last year to July, down from an increase of 16.5 per cent in the previous month.

Pound sterling weakened 0.26 per cent against the US dollar. Oil prices leapt around two per cent.

Analysts at Peel Hunt rated Just Group a ‘Buy’ after the financial services company posted ‘stronger than expected’ new business in the first half of the year. The Surrey-based insurer reported new business premiums of £1.9bn during the term, as it was bolstered by a busy annuity market. Bulk purchase annuity sales grew to £1.4bn and individual annuities increased by 54 per cent to £470m. “Overall, this is better than we expected,” analysts said.

Analysts at Peel Hunt rated Petra Diamonds a ‘Buy’ despite the group missing its diamond production target for fiscal 2023, which led to a fall in profits. Its full year sales revenues were also down 44 per cent year on year. “We do, however, expect to see the benefit of deferred sales on the FY24E balance sheet as postponed tender six is released into the market in August,” analysts said.

“After a decent showing on Wall Street last night, European markets were less enthusiastic with most of the major indices struggling to find direction. Strength in healthcare stocks was offset by weakness in financials and real estate.”

DANNI HEWSON HEAD OF FINANCIAL ANALYSIS AT AJ BELLL

thought

insights and news delivery mechanism fuelling

most up-to date reporting, adding critical context

decisions that require consciousness, education and thought

OPINION

EDITED BY SASCHA O’SULLIVAN

The competition watchdog is plagued with a knee-jerk belief that ‘big is bad’

Cento Veljanovski

THE COMPETITION and Markets Authority is on the back foot after a US court and the European Commission cleared Microsoft’s acquisition of game maker Activision. The CMA blocked the merger as part of a broader toughening up against Big Tech. Now, in an unusual step, it has reopened its investigation and looks set to reverse its previous decision.

The CMA offered no evidence or credible reasoning supporting its decision. This was a vertical merger, involving companies that are not directly competing with one another. For decades, such mergers were considered procompetion because they enable greater efficiencies. Now, or so it seems, any hypothetical threat to future competition by Big Tech, no matter how remote, is seen as sufficient to block the merger, should the CMA so desire. Microsoft president Brad Smith warned the initial decision to block the deal would send the signal that "the European Union is a more attractive place to start a business than the United Kingdom".

It’s worth revisiting the principles of F.A. Hayek, the nobel prize-winning economist, and his proposal for a liberal competition policy. For Hayek, the function of competition policy is to protect free competition and ensure

economic growth and, above all, individual liberty.

Hayek saw the economy as a complex, dynamic and evolving system that could not be directed by technocrats. Big and small tech companies are not like old-style big industrial monopolies which are static, sleepy, and over-price their products; they are dynamic, innovative, invest massive amounts in research and development, and generate huge consumer benefits. Their future is both unknown and unknowable. Yet accepting this has not humbled competition regulators but rather led to a scramble to ratchet up legal controls and questionable interventions.

The CMA, instead of using the opportunity presented by Brexit to become a

beacon of liberal antitrust based on facts, evidence, and adherence to the rule of law, has decided to become a world leader - together with the US Federal Trade Commission - in the interventionist regulation of big tech. The Microsoft/Activision case, which was cleared by the usually interventionist European Commission and 30 other competition authorities, is not an outlier. Just look at the blocked Meta/Giphy merger. The government’s Digital Markets, Competition, and Consumers Bill, which beefs up the CMA’s powers to intervene, risks even greater interventions.

Hayek did not live to see the digital age and the rise of Big Tech. But he did have a lot to say about the Big is Bad

mantra that now rules much of the debate over tech companies and the reform of competition laws. According to Hayek, there can be no general rule about the desirable size of a firm since this will depend on ever-changing technological and economic conditions – it was one of the unknowns to be discovered by the market process.

Hayek warned that the “concern about size and power of individual corporations more often than perhaps any other consideration produces essentially-antiliberal conclusions drawn from liberal premises”. As he aptly put it, size is often the “most effective antidote to the power of size” – something highly relevant to the competitive interaction in the tech sector where com-

In loving memory of the Office of Tax Simplification - but hopefully not its dream

LAST week tax luminary Bill Dodwell tweeted the sad passing of the governmental organisation of which he had been director, the Office of Tax Simplification. Were the hopes of those who would rip up and rewrite our Byzantine tax system buried that day too?

People have been hankering after tax simplification for as long as I can remember. Our tax statute looks complicated, with its reams of (now electronic) pages in miniature text, its patching of new rules over old and grumbling appendages of convoluted provisions. Large sections of the rules, particularly in business taxation, are a palimpsest: faded older clauses somehow hanging on in there after new ones have been inked on top. Few understand all of its inner workings. Perhaps we should radically reshape it, making the legislation a 20 page pamphlet, introducing a flat rate tax system and pushing all tax compliance through a simple app with a few basic questions. A nice idea, but it’s hard and

Tim Sarson

unlikely to happen anytime soon.

Some complexity is there for a reason. For one, there is a trade-off between simplicity and fairness. The simpler and more broad-based you make a tax, with fewer exceptions, the more people you’ll over-burden with it. That’s why we have lower rate income tax bands for the lower paid, a VAT registration threshold for small business (the level of which is itself a cause of controversy), and tax reliefs for working parents or charitable organisations.

It’s also what happens when government decides to incentivise certain behaviour, like investment in productive

assets or innovation. We get whole new tracts of legislation covering things like R&D credits and capital allowances. Get rid of those and plenty of taxpayers will be unhappy. Simplification tends to create losers. Take another topic that’s been making headlines recently: aligning the capital gains tax rate with income tax. There are strong simplification and behavioural reasons to do this: it could encourage entrepreneurs to invest in long term growth rather than cashing out on exit. But aligning rates immediately creates a vocal lobby of losers. In fiscal policy, the winners stay quiet while the losers shout loudly. Like other simplifications it also tends to trigger a “termination shock”, which means loads of asset realisations just before the new rate comes in.

There are other reasons where we taxpayers are at least partly to blame. Whole chapters of our legislation are given over to combating mischief. Simple rules can be open to abuse. So along comes the anti-avoidance legislation to

panies constantly encroach on one another’s territory. We saw this most recently with Meta taking on Twitter’s dominance in microblogging by launching Threads, and Microsoft’s development of an AI chatbot alternative to Google Search.

For Hayek, the issue was not “bigness” but “the ability of some monopolies to protect and preserve their position after the original cause of their superiority had disappeared”. These monopolies can seek to protect themselves by predatory and other exclusionary practices, which are legitimate concerns generally and among Big Tech.

In response, Hayek proposed positive pro-competition policies centred on removing government support for monopolies, restricting patent protection, and reforming company law and competition rules. Perhaps the modern-day equivalent of a Hayekian approach would be reforming cumbersome regulations, like the EU’s data protection laws, which act as barriers to entry. Hayek also believed in privatised enforcement through the courts fuelled by multiple compensatory damages and contingency fees - effectively replacing a regulator like the CMA. Hayek was sceptical of competition regulators because of the risk of illiberal outcomes, peppered by exemptions and exceptions.

The emergence of special rules and enforcement procedures for Big Tech, and the contradictory mess caused by the CMA with Microsoft and Activision are a powerful example of how his thinking still rings true today.

£ Cento Veljanovski is a fellow at the IEA and author of a report on competition law

‘ALL IS WELL’

patch up the holes, and hey presto a two page provision grows to 30 pages.

Perhaps complexity in our tax system is a symptom of complexity in our diversified economy. Perhaps it’s not so big a deal, as we have technology to manage much of it automatically these days.

Or perhaps not. There remains plenty of clutter in the system that could be removed. Some of the simplifications that would come with much resistance are necessary, in tax as much as in other areas like planning. And there are parts of our system that show the way, like Transfer Pricing. It’s based on the simple rule that transactions between connected parties in a group should be at arm’s length. Principles based legislation doesn’t solve all problems but it certainly cuts the word count.

The Office of Tax Simplification may be dead, but long live its mission. Just don’t expect miracles anytime soon.

£ Tim Sarson is Head of Tax Policy at KPMG

The CMA blocked the Microsoft/Activision acquisition deal and then reversed its decision

Tobias Ellwood has urged the West to engage with Afghanistan, claiming the country has been ‘transformed’ under the leadership of the, erm.. Taliban. There was more than one critic asking if Ellwood, a senior Tory MP and army veteran, had managed to speak to any women there.

WE WANT TO HEAR YOUR VIEWS

LETTERS TO THE EDITOR Get that Netflix subscription

[Re: Netflix lookahead: Password sharing crackdown could boost revenues, July 16]

Netflix’s move to crackdown on password sharing could prove to be a master stroke for the streaming company as it will establish new funds to invest in and improve its services, bringing added value to customers.

Clearly, certain types of subscriptions are still valued by consumers. Our research shows that despite ever-rising living costs, consumers are reluctant to cancel their subscriptions, instead opting to pause or switch to a better value upgraded contract. Almost three quarters (72 per cent) of users would rather pause their subscriptions than cancel. And while Netflix has reported

that subscription sign ups have been on the rise for the past three quarters, for most subscription businesses, customer retention is an even higher priority than customer acquisition. Ultimately, boosting user experience and the breadth of products on offer benefits users. For Netflix specifically, the expected results and the accompanying capital offers the streaming giant an opportunity to reinvest. Through improved services - including the option to pause and upgrade subscriptions, or using open data to offer more personalised services - subscribers can benefit from enhanced flexibility, convenience and control. This will unlock greater value from subscriptions – something that is essential in the cost of living crisis if subscription businesses are to keep their customers happy and grow market share.

Amanda Mesler Minna Technologies

SWAN-CENSUS Swans along the Thames sail up for an official count

Some degrees are useless, but it’s the 2:1 obsession we really need to leave behind

Emma Revell

TERMS like crackdown are usually reserved for crime: you’d expect a government crackdown on anti-social behaviour, burglaries, or corner shops selling vapes to pre-teens. But not on little Jimmy nervously awaiting his A-level results while dreaming of freshers’ week. Enter the government. As part of its new crackdown on low value courses, the Office for Students will be asked by ministers to limit the number of places universities can offer on courses which are “failing to deliver good outcomes for students”. Post-graduate earnings will presumably rank quite significantly.

This may sound harsh. But if you’re a new graduate trying to enter the world of work, and find that your shiny new degree – and accompanying £45,000 worth of debt – doesn’t actually qualify you for much, you’d certainly be within your rights to feel a little hard done by. While employment is not the only reason to go to university – the pursuit of

EXPLAINER: BARBIE VS OPPENHEIMER, THE WAR OF THE BIG SCREEN

This week, there has been a fierce fight between two warring parties. They're as different as they possibly could be, they have their own party colours and have thrown huge piles of cash at their success.

We're talking, of course, about Oppenheimer vs Barbie. Both movies come out this Friday, both have a star-studded cast and are expected to be a good old big screen success.

In the last few years the number of movies being screened in cinemas has plummeted. Almost all of the most successful films at

the box office have been part of a franchise - think of the neverending Marvel universe. In fact all of the top grossing films at box office last year were part of a series.

Barbie, ostensibly, is a re-make of a well-loved favourite. But the new movie, directed by Greta Gerwig and starring Margot Robbie diverges quite drastically from the original animations.

Oppenheimer, a dramatised adaptation of the scientist Christopher Nolan developing the atomic bomb, could not be more different.

knowledge and education for its own sake is valuable to many – potential future earnings are often a key part of the equation. And the uncomfortable truth is that many students are promised the world, but find the reality is quite different.

Take creative arts. Analysis by the Institute for Fiscal Studies shows it has zero impact on the future earnings of female graduates, and a negative impact for men. Students who are tempted to take that course should probably know that in advance.

It also concerns the cost to the state. If we had a system in which students selffunded, it wouldn’t be anyone’s business if someone wanted to spend tens of thousands of pounds studying a subject that wouldn’t increase their future

earnings. But because student debt is eventually written off if people don’t earn enough, the financial burden of paying for university ultimately lies with taxpayers – regardless of whether they attended themselves.

The government could change the funding system, making the Treasury loan money directly to institutions, which in turn lend to students. The students then repay the university, and universities repay the government an agreed fee. This would incentivise universities to trim lower-value courses and prevent students being missold on their likely graduate salary – because they would pay the price themselves.

However, we must be careful not to put all of the blame on universities. The truth is that politicians, teachers and parents have been consistently pushing the degree route for the last 25 years. Head to any recruitment website or jobs page and you will find countless ads claiming a 2:1 degree in any subject is a “required” or “necessary” criteria for the role. While I certainly hope a cardiologist or a structural engineer has spent an above-average amount of time in the

classroom, this creeping credentialism reinforces the narrative that a degree is the most reliable route into an ever-increasing number of jobs.

Say I wanted to retrain as a police officer. Since 2020, I would need to have a degree apprenticeship, a professional policing degree, or a degree in any subject. I’m not sure my BA Politics from Leicester qualifies me in any real way to keep London’s streets safe.

How about working with children? If Labour gets their way, we could be heading towards graduate-led nurseries, increasing the barriers to entry for those wanting to work in childcare. All of this at a time when Brits are facing the highest childcare costs in the OECD and many nursery workers are paid less than supermarket staff.

The government can announce all the crackdowns it likes, but if we really want to move towards an education system where the skills match up with the jobs on offer, universities, parents, teachers and employers all have to play ball.

£ Emma Revell is head of communications at the Centre for Policy Studies

Creeping credentialism convinces us we need a degree to get a job

Rishi Sunak has vowed to ‘crackdown’ on degrees which don’t help career prospects

This week, young cygnets take centre stage as the Swan Marker (yes, an official title) takes stock of the regal bird population over five days. They also get a check up on the spot - talk about a better service than the 8am GP rush.

RUSSELL BRAND’S SOBER FESTIVAL IS A WAKE UP CALL

After fifteen years of getting drunk at music festivals, Adam Bloodworth goes sober with Russell Brand. And won’t look back

One more time? How about ten more times! Let’s all get high!” declares a sober Russell Brand on the main stage at his Community Festival, conducting a breathing exercise to a crowd of thousands which is so exhilarating that people frequently collapse.

Medics are on hand and Brand warns that this isn’t a joke. He’s been sober for 20 years and has by now become an expert in getting his kicks the natural way.

Wary, I follow the instructor, breathing in, then out again, filling my belly with more and more air each time, until on the fourth breath I gasp to bring in as much oxygen as possible, then look up to the sky. I feel an ecstatic type of high that I cannot believe is not only legal, but not damaging, and possible with the use of just breath.

This is the premise of Brand’s Community Festival in Hay-on-Wye: to show another side to hedonism and festival culture that needn’t hurt your body but that provides teenage kicks redefined for grown-ups that possibly went too hard and want to find another way.

Later, my pal convinces me to try a male talking circle where I form a group with five other men to discuss what masculinity means today. We have five minutes each to open up to one another; there are decades between us in age but we have come to this glorious and verdant part of Wales to find commonality.

We talk without judgement, sharing

stories and experiences, and even in such a short time window, I find myself being more open than I thought I could possibly be with strangers. Fully softened up by now, by being surrounded by so many people who seem to have more time to chat without the distraction of the bar, I go to a class about touch and intimacy, and learn how to give myself a hug, by placing my right arm over my heart and my left

arm onto my right shoulder. Under canvas, a few hundred of us stand in this position for a good few minutes, and although I’m typically self-conscious, I found myself mostly managing to keep my eyes closed and experience the feeling of giving myself a hug. At the risk of drifting into hyperbole, Community Festival changed me fundamentally. Don’t get me wrong: I will go to another festival later this summer and I will drink,

and I will likely drink way too much, but now into my thirties, it felt like time to try another way of letting loose. The truth is it felt incredibly freeing that there wasn’t a bar looming in the background of every stage. When no one is drinking, you sort of adapt to the situation, and I’ve found that after so long drinking it ends up feeling perversely more rogue to not have a drink than it does to have one.

It was even more freeing to move beyond the culture of doing rounds, which at a festival is a cultural norm you can get stuck in from midday to well past midnight. Brand, wandering the festival and hugging attendees, was told by hundreds how his approach had changed their lives. I can see why.

£ Community returns next year; russellbrand.com/community

ADEM IN BELGRAVIA: A SMARTER, FUSS-FREE NEW SALON

nut farm he grew up on.

Arriving at the new salon one bright summer morning, and sheepishly sporting a mop that hadn’t been tended to for than I’d care to say, Oygur took one look at me and immediately had a clear idea for what he'd do with my hair, in around thirty seconds.

blonde and out on the streets taking selfies.

Posh hair salons are to be Belgravia what posh restaurants are to Mayfair. So how do you stand out in a crowded market?

Forget the pomp and ceremony and just do a darn good haircut - or at least that's the approach of Adem Oygur, Turkish hairdresser who has over 15 years of experience and whose approach is inspired by the Turkish hazel-

Sitting around and having lengthy chats about hairdos works for some, but others just like the expert to take the lead, and this is where Oygur scores full marks.

“I’m excited about this,” the thirtysomething Turk said, and within minutes he was hacking thirty centimetre strands of hair off my head like they were particularly pesky overgrown weeds in his garden.

Two hours later and I was cut, bleached, dyed a lovely creamy

“I do practical, wearable cuts,” Oygur said. "Designed to your face shape, and how you wear it." Oygur's confidence stems from a career haircutting for fashion shows, where he hacks away at models behind the scenes. After a childhood on the family hazelnut farm, he moved to Istanbul aged 14 to pursue cutting and hasn’t looked back. Adem, which opened recently, is the culmination of a career’s worth of haircutting in other people's salons, and at other people's events.

"I wanted to create a breathable living salon," Oygur says as a pile of hair not dissimilar to a small mammal piles up behind me.

"The products are centred around one hero ingredient: hazelnuts."

Trees are growing up quickly in the salon, forming interesting shapes in the corners. Oygur has an empassioned chat about how to look after one more tricky fern with the customer before me, a man in his fifties who tells me I’m in safe hands. This is fuss-free hairdressing that works. I was left with the sort of cut I’ve seen other hairdressers fuss over for three times as long. I walked out with some of the hazelnut hair oil and have been using it for texture since. It’s great for those days where you want to give your hair a little lift and make it stand out from how it usually looks. Plus, all the hazelnuts come from Oygur’s family farm.

£ To book a cut visit adem.london; call 020 7235 2228 or email salon@adem.london. 61 Ebury St, SW1W 0NZ, London

A new salon in Belgravia inspired by nature and Turkish oils is top draw, finds Adam Bloodworth

On the left, Adem’s hazelnut oil shampoo and below,

Clockwise from left, Russell Brand on stage at the Community Festival in Hayon-Wye; the main stages

RECIPE: HAM YARD HOTEL’S ULTIMATE SUMMER SANGRIA

My name is Pedro Pascal and I’m the head bartender at the Ham Yard hotel in Soho. This is my twist on a sparkling wine sangria. I have been making this recipe since I was a teenager and it never fails to impress. You can also prepare the drink ahead of time which makes hosting stress free. It’s very refreshing, and lighter than your typical sangria as it uses sparkling rather than still wine. The addition of tropical fruit makes it the perfect summer drink.

INGREDIENTS FOR ONE LITRE

£ 6 cubes of pineapple

£1/2 kiwi, peeled and sliced into wheels

£ 1/4 grapefruit, sliced

£ 1/4 lime, sliced

£ 1/4 orange, sliced

£ 10 mint leaves

£ 1 stick of cinnamon

£ 25 ml passionfruit puree

£ 25 ml pineapple puree

£ 35 ml White Rum

£ 15 ml Cointreau

£ 15ml Martini Bianco

£ 50 ml apple juice

£ 50 ml grapefruit juice

£ 100 ml Fever Tree

lemonade

£ 375 ml chilled sparkling wine – something on the dry side - Champagne, Cremant or Cava

£ 2 large scoops of cubed ice

METHOD

£ Prepare your fruit and add to a large jug with all of the ingredients except the mint, lemonade, ice and sparkling wine. You can let this steep in the fridge for up to 6 hours – this only enhances the flavour.

£ When you are ready to serve, simply add your ice and mint leaves and top up with the lemonade and sparkling wine. Give it a good stir and pour into glasses. Garnish with half a passion fruit if you’d like to push the boat out!

£ To book a table or a room at the Ham Yard Hotel go to firmdalehotels.com/hotels/london /ham-yard-hotel; email restaurant@hamyardhotel.com or call 020 3642 1007

NEW OPENING

THE ROSARIUM, WATERLOO

Waterloo Station isn’t typically somewhere you’d think to go for dinner, but a new restaurant just opened in the bowels of the station is rethinking the terminus in culinary terms.

Go down the stairs opposite the sweeping main entrance past where the Eurostar used to be and a couple of hundred metres underneath the platforms you’ll stumble upon The Rosarium, a seasonal British restaurant with bright furnishings and chirpy staff.

The menu is traditional (ie starters and mains) but we’d recommend ordering a few dishes to share.

Particularly good is the lentil and shallot pie with Colcannon Mash, the sort of rich and indulgent vegetarian meal that makes you forget you’re not eating meat. What did not make me forget I was eating meat was the Sirloin with chips, watercress and shallots, a great mound of a thing that was cooked very well; another highlight was the ale-braised beef cheek with mac and cheese which was new depths of indulgence beyond even the vocabulary of indulgence mac and cheese dishes are famous for. If you’re in the station, drop in. Rosariumlondon.com; reservations@rosariumlondon.com

or needlessly expensive, finds Adam Bloodworth SHIRO RESTAURANT: DOING SUSHI PROPERLY

Finally, sushi

Finally, new Broadgate Circle opening Shiro is somewhere to explore sushi as a culinary passion. Sushi is hard to get into in London.

In West London it is sold for extortionate prices and dressed up in all sorts of fancy ways in restaurants that turn into nightclubs, and on the high street it is fine if uninspiring when sold in little cardboard packets.

In London it is hard to enjoy sushi like the Japanese do, where the raw fish is plentiful and accessible at all price points, arriving in chunks that are twice, three times the size of UK portions. Anyway, the Shiro restaurant now open on Broadgate Circle is helping change that image.

It is a bright, energetic restaurant that has a backdrop of swanky white furnishings with a particularly fancy ceiling art piece. It would suit a casual dinner date or something more formal. It feels properly swanky, but the type of swanky that lets the sushi be star of the show.

Plates are bountiful, each displaying their own assortment of bright colours. Radishes, petals and exotic plant leaves are the supporting characters to the fish. Fresh not fussy and pristinely decorated, dishes arrive like dainty pieces of contemporary art.

We began with a spicy tuna and salmon tartar and a Kabocha pumpkin gyoza, an intriguing partner dish to the delicious fat of the fish.

The hero Shiro sushi platter was filling in ways I never knew sushi could be. It was a triumphant collection of 12 pieces decorated with mushrooms, caviar and all sorts of pretty green foliage that could have come from the deep sea.

To our left some distinguished-looking Japanese men were carving slices of fish and looking as if their lives depended on

it, the neat little portions of white and pink-shaded flesh laying in waiting behind glass.

It’s not all ocean-dwelling: we ventured into the robata Japanese barbecue-style region of the Dinner menu for some Australian Wagyu steak turned Asian with the arrival of arima sansho and braised daikon. It was a thing of beauty.

Did I mention the cocktails? We had primers of plum and ginger margaritas to slap the day’s flavours out of our mouths and bring our taste buds to freshness.

Later, a Lagrimas rose was a boisterous partner to the fish.

Broadgate Circle is an odd thoroughfare of a place that, let’s be frank, lacks cohesion in the way those commercial restaurant hubs tend to. Mr Fogg’s, The Botanist and Comptoir Lebanais are some of the restaurants you can find here, but also everywhere else in London. Often, tables and gathering spaces here are full with post-work drinkers, and things can feel a little chaotic.

Shiro isn’t part of that. On the higher level and slightly off to one side, it is far removed enough from the rest of the Broadgate Circle establishments to keep the drunken masses away, yet still close enough to make this a decent and practical meeting point for a post-work dinner.

Trust the staff to lead you through the menu, as they know best, but if you’re wanting a proper taste of the best the restaurant has to offer, book for one of their new Shiro Nights series. There, you’ll get a tour through Edamame and Miso soup starters, tempura and gyoza and sushi with free-flowing wine for under fifty per head. Forget Itsu’s half price offers: that’s a sushi bargain I’m willing to get on board with.

£ To book a table visit shirosushi.co.uk; email shiroreservations@aqua-london.com

that isn’t pretentious, high street

Stokes urges England to set up ‘best Ashes ever’ with win

MATT HARDY

ENGLAND Test captain Ben Stokes says this year’s Ashes will be one of the best in history if his side set up a decider in the fourth match of the series. England are 2-1 down heading into today’s Test at Old Trafford – where England have not won an Ashes match since 1981.

“If we win this one then going into the last game at 2-2, it would be hard not to say this is the best men’s Ashes series in a long time, if not the best,” the captain said.

“Overall, take away Australia and England, the cricket that’s been played has been absolutely brilliant.

“Everyone who’s watched at the ground or at home on TV has just really enjoyed the cricket that’s been played.

“There have been some pretty special moments out on the cricket ground, some special individual performances as well. I guess that’s what you want from sport.”

England went 2-0 down after narrow defeats at Edgbaston and Lord’s but began their comeback at Headingley with a fourth-day victory courtesy of Chris Woakes and Mark Wood.

Both of those have retained their places in the side in Manchester today with England’s only change being James Anderson’s return to the side in place of Ollie Robinson. It is set to rain

FOOTBALL

NICE LITTLE URNER England draw Ashes but Aus retain trophy

this weekend in Manchester and England could be forced into playing a shortened game, much like they were in Leeds.

“You never want to look too much into the weather but in the position we find ourselves in, we find we might have to,” Stokes added.

“We know we have to win to take it to the last game for us to have a chance of getting the urn back.

“Going into the last game 2-0 down, we knew we had to win that so I think that helped us a little bit.

“Maybe again with the weather that’s predicted, it might bring more out of us again knowing

England beat Australia by 69 runs to win the ODI series 2-1 and draw the Women’s Ashes level at 8-8 but the tourists will retain the run because they held it coming into the competition. The result will be disappointing for England, who were one boundary away from taking a series lead on Sunday, but they have beaten Australia in both the T20 and ODI series –a feat few expected prior to the series. This is the first Ashes draw since an 8-8- scoreline in 2017-2018 but England’s wait to reclaim the urn goes on –this year’s hosts have not won the series since 2013-14.

MULTI-SPORT

Commonwealth Games U-turn ‘embarrassing’

FRANK DALLERES

that we might have to push the game on even more than we normally do. We’ll just have to wait and see.”

If England were to win in Manchester this week and draw level in the series, it would go down to a decider at the Oval next week.

Australia have not won an Ashes series in the United Kingdom since 2001 but have held the urn since they took it off England in 2017-18.

Australia’s last series in England saw them draw 2-2 but they have lost 302, 3-0, 2-1 and 2-1 since their 4-1 victory in 2001 –a series that did not include a Test match at Old Trafford.

Onana heads to Old Trafford from Inter in deal worth £47m

MATT HARDY

MANCHESTER United have agreed a deal worth £47m for Inter Milan goalkeeper Andre Onana.

The keeper started for the Serie A side in their Champions League defeat to Manchester City in Istanbul last season.

The Old Trafford club are expected to pay £43.8m up front for the Cameroon international with over £3m possible in add-ons. It comes after United ditched long-term keeper David de Gea after 12 years.

The 27-year-old Onana began his career with Ajax before joining

Inter Milan in 2022. He signed a fiveyear deal with the Italian side on a free transfer following a doping ban but will now join United, also on a five-year deal.

Onana played for Cameroon at last year’s World Cup but retired from international football after a falling-out with national team manager Rigobert Song.

Elsewhere in Manchester United news, Marcus Rashford yesterday agreed a new contract which would see him remain at the club until 2028.

“I’ve already had some amazing experiences at this incredible club,” he said.

A BITTER war of words has broken out over the 2026 Commonwealth Games after the Australian state of Victoria abruptly pulled out of hosting the event.

Victoria was named host for the multi-sport championships last year but reneged on that commitment on Tuesday, citing spiralling costs –plunging the Games into doubt.

Commonwealth Games Australia chief executive Craig Phillips called Victoria’s U-turn “absolutely embarrassing” and accused regional officials of overstating the financial burden. “The stated cost overruns in our opinion are a gross

exaggeration and not reflective of the operation costs presented to the Victorian 2026 Organising Committee as recently as June this year,” he said in a statement.

“The Victorian Government wilfully ignored recommendations to move events to purpose-built stadia in Melbourne and in fact remained wedded to expensive temporary venues in regional Victoria. CGA welcomed the opportunity to review the financial analysis prepared independently of those involved at the coal face of planning and delivering.”

Victoria’s state premier Daniel Andrews alleged that the original budget of A$2.6bn (£1.3bn) had

almost tripled since planning began.

“Last year when the Commonwealth Games authorities approached us and needed someone to step in to host the 2026 Commonwealth Games, as a state we were happy to help out, but of course not at any price,” he said.

“I’ve made a lot of difficult decisions in this job, this is not one of them. It’s just quite obvious, we are not going to spend A$6-7bn on a 12-day sporting event.

The Commonwealth Games Federation also questioned Victoria’s cost projections.

“This is hugely disappointing for the Commonwealth Sport Movement,” said the CGF.

England eclipses hosts

for

Women’s World Cup fever

FRANK DALLERES

WOMEN’S World Cup fever is set to hit hardest in England — ahead of holders the USA and co-hosts Australia, according to a new global fan survey.

Awareness of the tournament, which kicks off on Thursday in New Zealand, is highest in England, where 66 per cent of people know about the Women’s World Cup.

That is more than 59 per cent in Brazil, 58 per cent in Australia and 43 per cent in the USA, whose team are aiming to lift the trophy for a third time in a row.

In Germany the figure is 40 per cent and France 33 per cent , a survey of

14,000 people from seven countries carried out by AI-driven sports content provider WSC Sports.

Women’s World Cup fandom is set for a major overall boost, with 57 per cent more people saying they will avidly follow the tournament than the last edition four years ago.

England will see a 35 per cent increase fans following the tournament, where the Lionesses are aiming to follow last year’s European Championship win with a first World Cup. “Our research shows conclusively the rate at which interest and awareness of women’s sport is growing globally,” said Daniel Shichman, CEO at WSC Sports.

Stokes would be the first English winning captain since Cook

FOOTBALL

MULTI-SPORT

Time for Commonwealth Games to move on?

IN THE early hours of Tuesday morning a statement dropped announcing that the Victoria 2026 Commonwealth Games would not take place in the southern state of Australia.

It triggered a crisis for the Commonwealth and what it perceives to be its legacy.

Once the Empire Games, the Commonwealth Games encompasses a modern Britain and a world where sport is put before a darker history.

But after Birmingham had to step in when Durban, South Africa couldn’t fulfil its bid, it looks as though another city may be required if the Commonwealth Games is to survive as a product. So are the Commonwealth Games simply dead?

There are some who suggest that London could step in and host the Games, while others may point to the likes of

the United Arab Emirates, Qatar and Saudi Arabia – former protectorates of Great Britain with deep financial resources – as potential hosts.

What two consecutive failed Commonwealth Games bids does show, however, is that if it is to survive the entire structure needs to change.

SWANSONG

Progress looked to have been made when the number of protected sports in the schedule was dramatically reduced in a bid to encourage new countries to bid for the event, but that doesn’t seem to have worked.

There have been discussions in Canada and India over bids for the

2030 Games but it is uncertain whether either of those would be willing to move their plans forward by four years to accommodate the 2026 edition.

So maybe we just need to move on from these Games. The last edition, in Birmingham in 2022, was brilliant and was the definition of what many have dubbed the “friendly games”.

But that, the last under Queen Elizabeth II, could be a fitting swansong for an idea built on the foundations of empire and colonial rule of years gone by. That’s not to say the Commonwealth Games, and by extension the Commonwealth, is redundant today, but it does say that the world has progressed

and attempted to move on.

The Games has been in just four out of the group’s 56 countries during this century – England, Scotland, India and Australia – but have previously been in the likes of Jamaica and Malaysia.

RADICAL

The issue is, however, that the Games rarely get beyond the big four – Great Britain, Canada, Australia and New Zealand – and that’s hardly an area that encompasses the Games and the legacy it’s meant to represent.

There have been discussions about a Caribbean bid in the past, as well as other African bids, but these haven’t managed to materialise beyond the

failed Durban Games scheduled for 2022. The Commonwealth as an organisation needs to decide whether the Games works in its current format and whether countries will be able to stump up the cash to host it going forward.

Because in its place – using the money that would otherwise be spent on the Games – you could better fund the Youth Games, make a difference to the overall fitness and health of Commonwealth members and help with modern issues such as climate change and third world sexual health.

The Games is glorious, there’s no denying that, and brings together 56 nations and territories together. That element cannot be lost.

But maybe it has had its time and the family of nations needs a radical new idea, one that doesn’t break the bank amid a global economic crisis.

WHEN you consider how well he has played in much of that time, it really is unbelievable that Rory McIlroy hasn’t won a major for nine years. Since 2014 he has won the Race to Dubai and FedEx Cup twice each as well as 19 other tournaments around the world, but his wait for a fifth major has gone on.

I would love to see that change this week at the Open Championship. Rory is a great ambassador for golf, a lovely guy and played well enough to win last year at St Andrews but couldn’t get a putt to drop on the final day.

For many reasons, McIlroy will be the man to beat at Royal Liverpool, not least that he arrives fresh from beating Bob MacIntyre to the Scottish Open last weekend.

MacIntyre set what looked like an insurmountable score with a brilliant last round at the Renaissance Club that also boosted his Ryder Cup hopes. But McIlroy overtook him with a phenomenal birdie-birdie finish. Not many could have played the tee shot that he did into 17, while both his and MacIntyre’s efforts into the last were shot of the year contenders.

McIlroy’s look up to the sky after holing the winning putt said everything about what that win – his first in Scotland and on the eve of the Open –meant to him. It moved him closer to one of his goals this season – winning the Race to Dubai as part of another double with the FedEx Cup.

Can he do it two weeks in a row and win the Open again? I certainly don’t see why not. He will feel great about going back to Royal Liverpool, where he lifted the Claret Jug in 2014.

CLASSY LIVERPOOL

This a really classy golf course, one of the best on the major circuit, but a very different test to the one McIlroy passed last week in Scotland. It’s beautiful and lush but the fairways are much tighter, with some

CREAM WILL RISE TO TOP IN TOUGH OPEN TEST

lems on the green, boring them into the middle of the hole time after time.

Having recently won for the first time in four years and challenged at the US Open last month, Fowler could be a contender.

Royal Liverpool could be ideal for Jon Rahm. If there is lots of laying up short of bunkers, the Spaniard’s great iron

game could come into play. Rahm may not have been at his very best lately but the Masters champion is good at peaking for the bigger events.

Smith is back as the defending champion, having seen off McIlroy in that

memorable Sunday duel last year.

I haven’t seen as much of the Australian but he is a beautiful golfer and seemed to have a tear in his eye handing back the Claret Jug this week.

Local boy Tommy Fleetwood is getting back to his best and must have a chance, while fellow Englishman Tyrrell Hatton is too good to discount.

Of the Americans on the LIV Golf circuit, Brooks Koepka is a very good iron player. Dustin Johnson gave Darren Clarke a run for his money when he won the Open at Royal St George’s in 2011 and his short game has got much better since, so he is certainly a contender.

Sam Torrance OBE is a former Ryder Cupwinning captain and one of Europe’s most successful golfers. Follow him @torrancesam

After Victoria’s U-turn, will London or Gulf state step in or should ‘friendly games’ be banished to past, asks Matt Hardy

Like at St Andrews, you could be three ahead with two holes to play and still not be safe. It won’t be over until it’s over