A worthwhile policy proposal amid the Labour conference dogfight? Now there’s a surprise. But shadow chancellor Rachel Reeves’s scheme to freeze and eventually scrap business rates, in the meantime boosting high-street survival by raising the threshold for small business rate relief and incentivising re-use of empty premises, was the brightest moment of the Brighton event.
No matter that Reeves is likely to hold her post only as long as Sir Keir Starmer holds his and that anything promised today will resemble a Dead Sea scroll by the time Labour ever returns to power. No matter also that her idea of balancing relief for bricks-and-mortar businesses with higher taxes on digital giants is sure to be defeated both by the giants’ lobbying power and by moves towards global corporate tax harmonisation.
What matters is that she spotlighted the outdated, unfair, economically damaging business rate system in a tone that was immediately welcomed by the Federation of Small Businesses as ‘a gauntlet’ to which Conservative ministers must now respond. A rare example of useful opposition.
Roads to freedom
A big hello to Polish HGV drivers who enjoy The Spectator in the cab during EU-enforced breaks from the road. I bet you’re thinking: ‘A fast-track visa to the freedom-loving UK from now until Christmas, with wages equal to 50 grand a year and a cheery thumbs-up from my British chums waiting in their petrol queues? Where do I sign?’ Or perhaps not.
There are driver vacancies all across the Continent, so no obvious reasons why any would choose to come here now, and surely no ministerial expectations that a useful number will actually do so. The temporary bending of visa rules and announcement that army drivers are undergoing ‘specialised training’ for deployment to ease the fuel crisis are the hollowest form of spin, based on an assumption that the ‘crisis’ will evaporate as soon as panic tank-filling stops.
But then of course we’ll discover the next set of shortages, or rediscover existing ones, that are holding back recovery and threatening Christmas. Toys, turkeys, auto parts, building materials, microchips, medical supplies: you name it, it’s stuck waiting for a ship, a gas canister, a slaughterman, a whole new generation of truck drivers or a total revolution in logistics. (I’ll come back to that last one another week.) In this knock-on phase of the pandemic, for which there was no contingency plan, government is helpless. If we can’t revert to a wartime command economy with rationing, we just have to wait for businesses to rise to the challenge and sort themselves out. Thankfully, that’s what they’re generally good at.
All over for Spacs?
The fashion for Spacs is subsiding as fast as it took off. These are ‘special purpose acquisition’ or ‘blind cheque’ companies, mostly in the US, that harvest cash from investors without specifying what they intend to do with it, then offer a fast route to market for hi-tech ventures that merge with them. They looked to me like a novel way for Wall Street to exploit gullible small investors and I was glad to find a wise big investor, Warren Buffett, taking my side of the argument. Some $88 billion of Spacs were listed in the US in the frenzied first quarter of 2021, but only $16 billion in the second; the trend in the third was for investors to pull cash out as fast as they could, with some Spacs facing redemption rates of 90 per cent.
Markets this side of the Atlantic had initially hoped for a piece of the hot Spac action. Continental bourses, however, shifted sensibly the other way: ‘European stock-market listings have come back with a bang,’ says Reuters, reporting a recent flurry of conventional IPOs in Frankfurt and Amsterdam. ‘But blank-cheque companies are nowhere to be seen.’ London — having lost its competitive edge in the listings game — took a lead from Lord Hill’s review in March, which argued for accommodating Spacs with appropriate safeguards rather than watching them go elsewhere. ‘I’ll be curious to see whether the bubble bursts before the Financial Conduct Authority has time to open the door,’ I wrote at the time. In fact the FCA took until August to change the relevant rules, so it looks as if I was right. Fortuitously in this case, that’s no bad thing.
Fear on the menu
The Savoy Grill seems a suitable place for a moment of epiphany. A generation ago, this was ‘The Dealmakers’ Arms’, where captains of industry lunched with their bankers and sometimes with my predecessor Christopher Fildes, who once proposed a customer buy-out under the slogan ‘Put the Grill on the bill’. Nowadays, a Gordon Ramsay make-over much disliked by the City titans attracts more of a wedding-anniversary clientele, but it’s still an enclave of the elite where opinions can be expansively expressed.
Lunching with Spectator Club draw winners and the economist Gerard Lyons of Netwealth, I was moved to articulate a fear — by no means strong enough to form a prediction — that the world is travelling from ‘radical uncertainty’ (to borrow a phrase from Mervyn King) towards something more like utter chaos. I hardly need catalogue the recent geopolitical and biological works of Beelzebub, nor even mention the weather. Mercifully we haven’t had a stock-market crash for a while — but October is their traditional month, by the way. Meanwhile, the specific image that provoked my apocalyptic thought-train was that of ‘General Sherman’, the Californian sequoia that is the world’s largest living tree, having its base wrapped in aluminium foil to protect it against raging forest fires.
‘Like Götterdämmerung,’ said one of our guests — and in the Savoy’s own hall of ancient gods, foreboding briefly made me shudder. But in a broken world, what can we do except hope for redemption and live for the moment? I recommend the Arnold Bennett soufflé and Dover sole Grenobloise.
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