Tuesday, January 07, 2025
Exodus
The paper says that the last year saw the biggest outflow of companies from the London Stock Exchange since the global financial crisis.
They add that according to accountants EY, eighty-eight companies including Paddy Power owner Flutter, travel group Tui and Just Eat abandoned the London market for US and European exchanges.
This comes amid fears of the capital’s shrinking relevance as a place to do business following Britain’s exit from the European Union:
Last month, former London Stock Exchange boss Xavier Rolet said there is a “real threat” that more UK companies will move their listings to America as trading thins out in London and grows over there.
The loss of 88 firms is the most since 2009, said EY. During the same period there were 18 new listings. where companies first sell shares to the public.
The shrinkage of London as a global market has been steady. Twenty years ago, when banks, manufacturers, oil companies and pharmaceutical firms dominated lists of biggest companies, UK-listed stocks accounted for 11 per cent of the global market. Now it is about 4 per cent.
The trend is as much about America’s growth as it is about London’s shrinkage as the US and its giant tech stocks have dominated world markets.
The entire FTSE 100 index of top UK-listed companies including household names Tesco, HSBC, Shell and British Airways owner IAG are together worth about £2 trillion.
By comparison, New York-listed Apple alone has grown to be worth $3.72 trillion (£2.97 trillion).
The next-biggest companies in New York which help the US market swamp all competition are all tech firms worth more than $1 trillion, including Amazon, Tesla, Microsoft, Meta, Google owner Alphabet, and Nvidia.
No London-listed company is worth more than £165bn, or a few per cent of Apple’s size.
Largely this shows that to compete, a stock exchange needs big tech companies. Britain grows a few, but the biggest example, chip designer ARM, chose New York to have its shares listed in 2023 when its owner SoftBank sold out.
Does this matter? Companies tend to want to be close to their shareholders, which could lure more companies away from Britain wholesale costing jobs and tax revenue if they change where their shares are listed, said Professor David Bailey of the University of Birmingham.
If London shrinks, it could also have an effect on its broader attractiveness as a place to raise money.
“Ultimately if London isn’t seen as an attractive market for bigger companies to list their shares, this raises a question mark over whether UK firms can attract money,” he said.
London also hosts vast debt markets, as well as metals trading markets, a complex insurance market and other services big companies need.
If the central reason for being based in London starts to fade, these other markets could be hurt too.
Another consequence that the Brexiteers need to answer for.
Last month, former London Stock Exchange boss Xavier Rolet said there is a “real threat” that more UK companies will move their listings to America as trading thins out in London and grows over there.
The loss of 88 firms is the most since 2009, said EY. During the same period there were 18 new listings. where companies first sell shares to the public.
The shrinkage of London as a global market has been steady. Twenty years ago, when banks, manufacturers, oil companies and pharmaceutical firms dominated lists of biggest companies, UK-listed stocks accounted for 11 per cent of the global market. Now it is about 4 per cent.
The trend is as much about America’s growth as it is about London’s shrinkage as the US and its giant tech stocks have dominated world markets.
The entire FTSE 100 index of top UK-listed companies including household names Tesco, HSBC, Shell and British Airways owner IAG are together worth about £2 trillion.
By comparison, New York-listed Apple alone has grown to be worth $3.72 trillion (£2.97 trillion).
The next-biggest companies in New York which help the US market swamp all competition are all tech firms worth more than $1 trillion, including Amazon, Tesla, Microsoft, Meta, Google owner Alphabet, and Nvidia.
No London-listed company is worth more than £165bn, or a few per cent of Apple’s size.
Largely this shows that to compete, a stock exchange needs big tech companies. Britain grows a few, but the biggest example, chip designer ARM, chose New York to have its shares listed in 2023 when its owner SoftBank sold out.
Does this matter? Companies tend to want to be close to their shareholders, which could lure more companies away from Britain wholesale costing jobs and tax revenue if they change where their shares are listed, said Professor David Bailey of the University of Birmingham.
If London shrinks, it could also have an effect on its broader attractiveness as a place to raise money.
“Ultimately if London isn’t seen as an attractive market for bigger companies to list their shares, this raises a question mark over whether UK firms can attract money,” he said.
London also hosts vast debt markets, as well as metals trading markets, a complex insurance market and other services big companies need.
If the central reason for being based in London starts to fade, these other markets could be hurt too.
Another consequence that the Brexiteers need to answer for.
Monday, January 06, 2025
Musk says Farage is not the messiah after all
The paper reports that Musk has said Nigel Farage “doesn’t have what it takes” to be Reform UK’s leader, despite Farage refusing to condemn the billionaire businessman for his inflammatory comments about Keir Starmer and Jess Phillips just hours earlier:
In a surprise intervention, less than three weeks after Musk met Farage at Donald Trump’s Florida home amid reports he could donate $100m (£80m) to Reform, Musk used X, the social media platform he owns, to say: “The Reform party needs a new leader. Farage doesn’t have what it takes.”
It was not clear what prompted Musk, who has tweeted numerous times recently about UK politics, to change his mind about the Reform leader.
But Farage indicated it could have been due to disagreement about Tommy Robinson, the jailed far-right anti-Islam agitator whom Musk has characterised as a political prisoner, but whom Farage condemns.
“Well, this is a surprise!” Farage wrote on X after Musk’s tweet. “Elon is a remarkable individual but on this I am afraid I disagree. My view remains that Tommy Robinson is not right for Reform and I never sell out my principles.”
Speaking earlier, Farage said Musk, who has called Phillips a “rape genocide apologist” and said Starmer was “complicit in the rape of Britain”, had brought back free speech on social media since buying Twitter, which he renamed X.
“I don’t agree with everything he stands for,” Farage told BBC One’s Sunday With Laura Kuenssberg. “But I do believe in free speech. I think he’s a hero.”
He added: “Free speech is back. Well, you may find it offensive, but it’s a good thing, not a bad thing.”
Speaking later to the BBC, Wes Streeting, the health secretary, condemned Musk’s comments about Phillips, among a mass of messages on the subject of grooming gangs Musk has sent to his 210 million X followers in recent days.
“It is a disgraceful smear of a great woman who has spent her life supporting victims of the kind of violence that Elon Musk and others say that they’re against,” he said.
Streeting condemned what he called “armchair critics on social media”, contrasting them with people such as Starmer and Phillips, who “have done the hard yards of actually locking up wife beaters, rapists, paedophiles”.
Whether Musk will now give the promised $100m donation to Reform has to be seen, but Farage should reflect that if he is going to sup with the devil, to coin a phrase, then it may not always be to his benefit.
Sunday, January 05, 2025
The true cost of Brexit
He went on to quote from a separate article in the Telegraph on 26 June 2016 in which Boris Johnson claimed: 'British people will still be able to go and work in the EU, to live, to travel, to study, to buy homes and settle down. There will continue to be free trade and access to the EU single market.'
The reality has been very different of course, a fact that is made very clear in this aricle in the Independent. In a mirror of Stewart's writing they say that Brexiteers promised a new age of British sovereignty, a crackdown on migration and the much-derided “£350m a week” that could be diverted from the EU back into the NHS, but half a decade on, Brexit appears to have missed the mark:
The cost of Brexit is still being determined, but the government watchdog estimates that the economy will take a 15 per cent hit to trade in the long term, while experts suggest that the UK has suffered £100bn in lost output each year.
Since Britain left the EU, migration has been at the highest levels since records began; while key sectors face staffing shortages.
And almost six in 10 Britons (59 per cent) think that Brexit has gone fairly or very badly, with just 12 per cent believing it has gone well, according to a YouGov poll in October.
UK trade expert David Henig told The Independent: ”The UK now has significant trade barriers to its neighbours. It’s something we will have to live with. We will not be allowed to forget it; there will always be issues.”
Brexit-optimist economist Julian Jessop, a fellow at the Institute of Economic Affairs, admitted that Brexit has made it harder or “impossible” for small businesses to adjust.
“The UK’s departure from the EU has undoubtedly had some negative effects on the economy, notably through reductions in trade, shortfalls in business investment, and disruption to labour markets,” he told The Independent.
However, he added that the “overall drag on exports and imports has been much smaller than feared”.
Former deputy prime minister Lord Heseltine said that nearly five years on, Brexit “has been a historic disaster”.
“It has destroyed Britain’s leadership in Europe just at a time when there was a critical need (for it), it has closed off opportunities for the younger generation to share in the benefits of Europe and it has denied Britain’s industrial base access to the research and policies of Europe. Our economy is much worse because of it and there is no reputable authority that denies this.
“I think the British people know that they were deceived and the deceit is measured in reduced living standards,” he added.
The latest Treasury estimates show that the cost of Britain’s settlement with the EU stands at approximately £30.2bn in total. This is separate from any estimates of lost money from separating from the EU.
As of the start of 2024, the bulk of this settlement (£23.8bn) had already been paid. Approximately £6.4bn still remained to be paid out to the EU in 2024 and onwards.
The government has not yet published the figure to the end of 2024.
The article is detailed and extensive, many of the statistics it relies on are contained in the paper's front page, reproduced at the head of this blogpost, but I have pulled out a few headlines.
The paper says that in 2023, Bloomberg Economics estimated that the UK is suffering £100bn a year in lost output from leaving the EU, while a recent study from the Centre for Economic Performance at LSE found that goods exports from the UK dropped by £27bn in 2022 alone as a result of Brexit. The study suggests that 16,400 businesses – some 14 per cent of UK exporters – stopped exporting to the EU due to Brexit trade rules.
And on the core pledge to put an extra £350m a week into the NHS, the paper points out that from fiscal year 2022/23, the core NHS budget jumped from £162.3bn to £185.4bn, however this budget was still lower than the previous year when including additional Covid spending, and that given the overlap of Covid and Brexit, it is very difficult to say whether money saved from leaving the EU was spent on the NHS, and what incentives were used to make funding decisions.
Finally, on immigration and the claim by Gove and Johnson that curbing net migration is not achievable as long as the UK is a member of the EU, it is apparent that leaving the EU did not have the intended effect on net migration.
The paper points out that at least 3.6 million immigrants have entered the UK since Brexit (between June 2021 and June 2024, the latest available data); with net migration at 2.3 million over that period. Net migration is more than double its pre-Brexit average.
Read the article in detail for the full picture.
Saturday, January 04, 2025
Has social care been kicked into touch?
The paper says that Streeting wants all parties to “agree on the direction on social care for the long term” and added that the Conservatives, Liberal Democrats and Reform party ha all said they would work together on it:
An independent commission to reform adult social care in England was launched on Friday but attracted criticism for kicking much-needed reforms “into the long grass”. Its final recommendations will not be made until 2028.
The taskforce, led by the cross-bench peer Louise Casey, will be charged with developing plans for a new national care service, which was a key Labour election manifesto pledge.
In an interview on BBC Radio 4’s Today programme, Streeting faced repeated criticism for squandering the opportunity presented by a parliamentary majority to implement change quickly and instead launching another commission.
Streeting said: “I think that would be a fair criticism if we weren’t already acting on social care, if we hadn’t already done a lot in the first six months, if we weren’t announcing further action today, and if we weren’t clear about the fact that part one of the Casey commission isn’t reporting in 2028 – it’s reporting next year, and it will outline what we need to do during this parliament to lay the foundations for a national care service.”
If implemented, the idea is billed as the biggest shake-up to social care in England in decades, but its parameters will not be defined until the commission reports back.
Describing what he thought it would entail, Streeting said a national care service would be “about national standards – consistent access to higher quality care for older and disabled people everywhere in the country”.
Asked whether it meant people would not have to sell their homes to pay for their care, Streeting said: “I would certainly like to see people protected from the catastrophic costs of upfront care that see people forced to sell their homes and move out.”
This is all very well of course but since 1997, social care has been the subject of three government commissions, three independent commissions, five white papers and 14 parliamentary committee inquiries. It isn't clear how this latest commission will be any different to Dilnot, which has already been ruled out by the current government as too expensive.
There is no point having a national consensus if the government is not prepared to find the money to pay for it. Without that this is just more long grass.
Friday, January 03, 2025
Labour not tolerating any dissent
This is the meat and drink of politics and each party has a different approach to getting these things done. Whether it is Boris Johnson withdrawing the whip and ending the political careers of a large number of pro-European MPs who wouldn't go along with his bonkers Brexit plan, or Keir Starmer temporarily suspending seven Parliamentarians early in his term because they voted to scrap the two-child benefit cap, Prime Ministers do what they can to get their agenda through.
Where it gets a bit barmy is when this disciplinary regime starts to filter down the ranks. Yes, leaders need their troops in the lobbies in Westminster, but do they really have to come down hard on the rank and file who are asking legitimate questions, and in doing so representing the concerns of their constituents?
THe BBC reports that rwenty councillors have quit Labour in protest at the party's direction under Sir Keir Starmer, and after ten of them had been blocked from standing for Labour at upcoming local elections for Nottinghamshire County Council after questioning the winter fuel policy:
The councillors - from Broxtowe Borough Council in Nottinghamshire - claimed the party had "abandoned traditional Labour values" and criticised policies such as cutting the winter fuel allowance for some pensioners.
Council leader Milan Radulovic, who had been a party member for 42 years, is among those walking away from Labour.
A local Labour spokesperson said the decision by some councillors to sit as independent 18 months after they were elected was "incredibly disappointing".
The councillors said they would establish a new independent party, planning to run the borough council as a minority administration in the short-term, but may need support from existing independents in order to keep control.
...
Radulovic said of the move that he was "deeply saddened" but had been placed in an "impossible position".
"I cannot support and will not support another centrist government intent on destroying local democracy and dictating national policy from a high pedestal," he said.
He also criticised plans to reorganise local government, which could see district and borough councils scrapped.
"I believe the concentration of power in the hands of fewer people and the abolition of local democracy through the current proposals of super councils is nothing short of a dictatorship, where local elected members, local people, local residents will have no say over the type and level of service provided in their area," he said.
The group said 100 local grassroots members had also left Labour.
Not a good start to the new year for Keir Starmer.
Border Country?
The Mirror reports that Braverman has been mocked for saying she visited a non-existent "land border" between Italy and Turkey - even though the two countries are hundreds of miles apart. I have illustrated this post with a map for any Tories reading it.
The paper says that the former Tory Home Secretary, who was a guest host on LBC radio on Thursday morning, ranted about visiting a wall built by Italy to curb migration:
She told listeners: "Italy have reinforced their borders. They built a wall. I went to see that wall.
"They built a wall on the land border between Italy and Turkey. They've got drones. They've got armoured vehicles. They've got soldiers. The numbers crossing that border have plummeted."
But Ms Braverman, who was sacked as Home Secretary, was swiftly ridiculed on X/Twitter, with users questioning how she went to see a wall on a border that could not exist.
Author Sunder Katwala said: "Suella Braverman claims to have been to the Italy/Turkey land border & seen a wall there! A remarkable claim since the countries are not neighbours!" And author Tim Brannigan simply posted a photo of a map with Italy and Turkey circled - clearly showing them nowhere near each other.
Other users joked that she needs to take GCSE Geography - and questioned how she could have ever become Home Secretary. Others posted gifs comparing it to a moment from TV show The Thick of It, which mocks politicians at the heart of government.
Author Otto English, who posted a gif of a cartoon girl riding a horse over a rainbow, said: "Suella Braverman has just told LBC listeners that not only has Italy built a wall on 'its border with Turkey' but that she has been there 'and seen it.' What a loss to politics."
Apparently, she confused Italy with Greece, an easy mistake to make I suppose if you're geographically challenged. I'm surprised she didn't want to build a wall in the English channel. Maybe it would have come up if she hadn't been sacked for allegedly inspiring ugly clashes between police and far-right thugs at the Cenotaph.
Thursday, January 02, 2025
Failing the sub-postmasters
The Mirror reports that almost three quarters of the cash set aside to compensate postmasters hasn't been paid out.
The paper says that a damning report has called on the Post Office to be kicked out of the process to put the Horizon IT scandal right, with just £499million of the £1.8billion assigned for payouts to victims having been paid out, meaning 72% is unspent:
MPs have voiced their outrage after it emerged Post Office bosses had paid £136million in legal fees. The cross-party Commons Business and Trade Committee says there must be fines if compensation targets are not met.
Alarming data shows that 14% of postmasters who applied before the original 2020 deadline have still not settled their claims. Committee chairman Liam Byrne said: "Payments are so slow that people are dying before they get justice. But the lawyers are walking away with millions. This is quite simply, wrong, wrong, wrong."
It comes after four former postmasters - Lee Castleton, Seema Misra, Chris Head and Jo Hamilton - were awarded OBEs in the New Year Honours list acknowledging their years-long fight for justice. They vowed to continue fighting for justice.
In its report, published today(WED) the committee demanded legally-binding timeframes for compensation to be paid. If these are not met, victims should be awarded additional payments, MPs agreed.
The document said schemes are "so poorly designed that the application process is akin to a second trial for victims”. It also pointed to high admin costs.
So far, it found, Post Office Ltd has spent £136 million on Herbert Smith Freehills, the external legal firm for the HSS and Overturned Convictions scheme. This is equivalent to 44% of the actual sums paid out to victims so far.
Of that, £67million was costs to administer the Horizon Shortfall Scheme. But in spite of this victims have been offered no legal advice in submitting their claims.
Mr Byrne said a "practical, common-sense plan" is needed to reboot the redress system. He said: “Victims should have upfront legal advice to help make sure they get what’s fair.
"We need hard deadlines for government lawyers to approve the claims with financial penalties for taking too long. Crucially, we need the Post Office, which caused this scandal in the first place, taken out of the picture.”
There were 3,300 victims, many of whom lost their livelihoods and reputations in the scandal. After all this time isn't it time that this was brought to a proper conclusion?
Wednesday, January 01, 2025
A disaster waiting to happen
This is an issue I have blogged about before, here, here, here and here, and it gets more urgent as time passes. The Guardian reports that proposals for a multibillion-pound restoration will not now be published until the end of 2025, even though the issue has been on the table for over a decade.
The Canadians sorted this out some time ago. managing a major revamp of their much younger Parliament building while both houses were still meeting, and Peter Hain believes that what happened in Paris provides a model for what can be achieved when politicians bite the bullet and act quickly:
He said that confirmation by John Gardiner, the senior deputy speaker in the Lords, that the new plans would only be available later in the year were “another kick of the can further down the road”.
“The mother of parliaments, a world heritage site, is ripe for becoming a Notre Dame inferno unless MPs and peers act immediately,” he told the Guardian.
“Both houses made their decision to decant, repair and modernise many years ago. Yet the procrastination goes on despite the assessment that decanting is the cheaper option. It would save billions. President Macron acted decisively to rebuild and restore Notre Dame. We should do the same with Westminster.”
The proposals will include plans for three options: a full decant of the Palace of Westminster; a continued presence in the building for some parliamentarians, or a rolling programme of enhanced maintenance and improvement.
A vote is expected in both houses on the plans when they are finally delivered. MPs, peers and senior parliamentary officials are bitterly divided on the best way to proceed with the extensive necessary works to the Victorian building. There have been dire warnings about the risks of falling masonry, potentially devastating floods and the danger of fire because of decades-old electrical wiring.
Peers and MPs have raised concerns about the potential for mass deaths if a fire were to sweep the building, especially if it coincided with demonstrations or events in Parliament Square, which could impede access for emergency vehicles.
The committee overseeing the project had said the decision should be put off until after the general election, with new cost estimates and timescales due this year. The committee was first established in 2013 by both houses.
Lord Gardiner, who is on the restoration and renewal board, said in a written answer to peers that the restoration and renewal client board’s detailed work would come at the end of the year and would set out “costs and timescales as well as risks and mitigations for all three options”. There have been warnings that delays will exacerbate costs and dangers for parliamentarians and staff.
Options to be considered by MPs are all likely to cost billions. The fastest – which could still take more than a decade – would be for both houses to leave the palace and relocate nearby on a temporary basis while most of the works are completed.
The second option would mean a continued presence of the House of Commons chamber and temporary relocation of the House of Lords and other functions. The third would be a rolling programme of works likely to take many decades.
Reports over the past decades have said the building is facing multiple crises. Asbestos is hidden throughout the palace, which complicates and prolongs any remedial works. There is a lack of effective fire compartmentalisation, meaning a far greater risk of fire spreading.
The complex is the size of more than 1,000 houses, all sharing the same water, electric, sewage and gas system, all well beyond their natural lifespans.
Under the building, there are approximately 250 miles of cabling, mainly electrical but also telephone, digital and broadcasting, over 11 hectares (28 acres). The building has up to seven floors in parts, more than 1,100 rooms and approximately 4,000 windows.
The cheapest plan involving a full decant of the Palace of Westminster was estimated to cost between £7bn and £13bn. The longest was for the project to be done on a continuous basis, which the last report warned could take 76 years.
There of course major differences with Notre Dame and that is not just because the French cathedral cost a fraction of that estimated to restore Westminster. There was leadership from President Macron, it is true, but the cost of the Paris restoration was met by private subscription. Nearly a billion Euros were raised from the public for the work. In London it will be the taxpayers who are picking up the bill.
Raising the money to restore Notre Dame privately was possible because of the affection felt for that building across France. You cannot say the same about the Palace of Westminster. Most people are indifferent to its fate and consider it to be the home of scoundrels and charlatans. Putting £15bn to £20bn aside to restore the building at a time of fiscal restraint, low growth and individual financial hardship will be a tough sell.
However, it is an historic building that needs to be saved and replacing it with a new one would most probably cost huge amounts as well, assuming consensus could be found on where to place a such a project.
It is imperative that decisive action is taken soon to minimise cost, save lives (not just politicians but civil servants and other staff as well) and demonstrate our commitment to the democratic process.
