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The Sunday Times Business — 7 January 2018

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BUSINESS
&MONEY
January 7, 2018 ╖ thesundaytimes.co.uk/business
thesundaytimes.co.uk/money
?I DON?T FIND IT HARD
TO GET INSURED?
TERRY WAITE,
MONEY, PAGE 18
STEVE EASTERBROOK,
THE BRIT LEADING
McDONALD?S
INTERVIEW, PAGE 6
Taxpayers will help prop up
ailing rail franchises under
plans to encourage more
companies to bid for routes.
Ministers are changing the
terms of new deals to cut the
risk for private operators,
amid concerns that they have
been spooked by weaker
consumer confidence and
problems with existing
franchises.
A joint Virgin Trains and
Stagecoach team is the third
operator in just over a decade
to fail to deliver on the East
Coast main line. In
November, it struck a deal
with the government to end
the contract early after its
growth assumptions proved
wildly optimistic.
The agreement spares the
operator about г2bn of the
г3.3bn payment promised
when bidding for what was an
eight-year franchise.
Labour and the former
infrastructure tsar Lord
Adonis accused the
government of ?bailing out?,
Virgin and Stagecoach.
Under the new revenue
support franchises, proposed
by the government, taxpayers
would help top up revenues
with cash if targets are not
met. In return, the
government would insist on
close financial monitoring of
the operators.
Analysts at HSBC said rail
companies would be able to
claim 80% of any shortfall.
The next franchises available
are South Eastern and the
New Look
on rack as
insurers
axe cover
Ailing fashion chain
may need to pay
suppliers upfront
Oliver Shah
New Look?s precarious finances are
set to come under more pressure after
the withdrawal of credit insurance to
many of its suppliers.
The development is a further blow for
the ailing fashion retailer, which is struggling with falling sales and a debt burden
of more than г1bn.
The chain?s deepening woes come at a
bleak time on the high street. Debenhams
saw its market value drop by almost a
fifth last week after it issued a Christmas
Christo Wiese:
hedge funds are
hungry for his
vehicle?s stake
in New Look
profit warning, while House of Fraser
confirmed that it had been forced to ask
some of its landlords for rent cuts.
Leading credit insurers, including
Euler Hermes, are understood to have
stopped offering cover on new shipments
of goods to New Look, although they are
said to be providing ?residual? cover to
their clients for existing orders. QBE,
another insurer, is thought to have
reduced its level of cover, but not to have
withdrawn altogether.
Credit insurers protect suppliers
against the risk of a customer going bust
between the point of accepting an order
and payment being made. When insurers
refuse to provide cover because of concerns about a retailer, suppliers often
demand upfront payment, putting extra
pressure on the store chain?s working
capital. The loss of credit insurance was
seen as a contributing factor in the
demise of Woolworths, Comet and BHS.
As well as a dive in New Look?s trading,
credit insurers are said to have been
spooked by the accounting scandal at the
South African retail giant Steinhoff. Its
biggest shareholder, the billionaire
tycoon Christo Wiese, also holds the largest stake in Brait, the listed private equity
vehicle that owns New Look.
Wiese, 76, resigned as chairman of
Steinhoff ?s supervisory board last month
after the irregularities came to light.
A senior source close to one of the
insurers said of New Look: ?It?s a file
we?ve had under monitoring for some
time. There was a degree of confidence
taken in the ownership. That?s clearly
changed in the past few weeks because of
what?s gone on [with Steinhoff ].?
New Look has nearly 600 shops in Britain and Ireland and 18,000 staff worldwide. Brait paid г780m for a 90% stake in
2015, after its acquisition of Iceland
supermarkets and Virgin Active gyms.
Brait wrote down the fashion chain?s
value to zero last November after an 8.4%
drop in like-for-like sales in the British
shops for the latest six months, which
pushed it into a г10.4m underlying loss.
Alistair McGeorge, New Look?s former
boss, was parachuted back in to replace
Anders Kristiansen in October. He
insisted the company had ?adequate
liquidity?, with access to г242.5m of
cash. However, it is loaded with more
than г1bn of debt and faces a bond coupon payment of about г40m in May.
Several hedge funds are believed to be
watching with plans to buy into the
bonds at a heavy discount and wrest control from Brait if the chain becomes more
distressed. New Look has several tranches of bonds, which were trading at 20%
to 40% of their face value last week. The
retailer declined to comment.
West Coast main line, which
will be awarded this year.
The new regime is likely to
face criticism as successful
bidders will have to shoulder
substantially less risk than in
the past.
?Future winners should
see upside without any of the
significant downside risk that
troubles investors in this
sector,? HSBC analysts wrote
in a note.
Industry insiders expect
the operators of the Greater
Anglia, Northern and
TECHIES JOIN
THE POT RUSH
PAGE 6
APPOINTMENTS
PAGE 7
PUZZLES
PAGE 16
MPs to question
bosses over fall of
Palmer & Harvey
12
14
Taxpayer faces bill for rail franchise failures
John Collingridge
TECH
TransPennine routes, which
were won on similarly racy
projections to the East Coast
line, to demand the
renegotiation of their deals
with the transport secretary,
Chris Grayling.
?They?ve all been waiting
to see what happens with
Stagecoach and Virgin,? said
one source. The two
companies are expected to be
handed an interim deal to run
the East Coast until 2020.
Handing back franchises is
expensive, however. Virgin
and Stagecoach put up more
than г200m of risk capital to
win the route in 2014.
Stagecoach has set aside
about г165m, but is expected
to have to write off about
г30m more to fully extricate
itself from the contract.
The railway network faces
more trouble this week as
RMT union members are due
to strike in a dispute over the
role of guards.
Is this any way to run a
railway?, page 8
FRANCESCO GUIDICINI
ASTON OWNER BUYS OKA
Peter Evans
A powerful committee of MPs
is to investigate the collapse
of wholesaler Palmer &
Harvey (P&H), which one
senior politician has likened
to the BHS scandal.
Former bosses face a
grilling by the Commons
work & pensions committee
on the demise of the 92-yearold company, which supplied
cigarettes and snacks to
90,000 retailers across
Britain. Its downfall caused
nearly 3,000 workers to lose
their jobs shortly before
Christmas.
The investigation
will centre on a 2008
management buyout in which
senior executives made
millions of pounds while
loading P&H with debt.
Christopher Etherington,
the former chief executive
and chairman who left last
year, will be a key witness.
He joined P&H in 2006 to
oversee the buyout and
received an interest-free loan
from the company to buy
shares. P&H?s most recent
accounts showed г3.4m of
the loan was still outstanding.
PwC, its administrator, is
chasing repayment.
Soon after leaving,
Etherington placed his г6m
country house ? complete
with stables and swimming
pool ? up for sale. The asking
price for the property ? near
Liphook on the west Sussex/
Hampshire border ? has
since been dropped to г5m.
Since the buyout, P&H?s
pension deficit has more than
doubled to г80m, while a
clutch of executives pocketed
more than г77m in dividends.
Frank Field, the Labour
MP who chairs the
committee, drew
comparisons between P&H
and the BHS scandal.
?It?s yet another appalling
example of a few people
getting rich, while pensioners
and employees feel
abandoned,? he said.
FTSE giants drag feet
over women bosses
Simon Duke
More than four-fifths of
Britain?s biggest companies
have so far failed to endorse
a drive to promote more
women to executive
positions.
The 30% Club, a campaign
group seeking to increase the
number of women in senior
roles, has issued a rallying cry
to the FTSE 100. It has asked
chief executives to make a
commitment to increasing
the proportion of female
executives to 30% by 2020.
They have been given until
the end of the month to sign
up. To date, just 14 of Britain?s
leading listed companies
have put their names to the
campaign.
Brenda Trenowden, a
senior City banker and the
The Italian owner of Aston
Martin has bought an
upmarket furniture company
co-founded by Samantha
Cameron?s mother Lady Astor,
writes John Collingridge.
Investindustrial is believed
to have paid more than г40m
for Oka, which started as a
mail-order business in 1999
and now has 14 shops in
well-heeled corners of the UK.
Oka, based in Chelsea,
west London, is patronised
by celebrities including the
model Naomi Campbell and
the actor Eddie Redmayne. Its
wares include cushions for
г315 and г1,495 armchairs.
Investindustrial, founded
by Andrea Bonomi, a scion of
the famous Italian industrial
family, plans to expand Oka
into America and sell more
online. It targets upmarket
brands and owns companies
including the Italian shoe firm
Sergio Rossi and pushchair
maker Chicco. It plans a sale
of Aston Martin, maker of
007?s car, which it co-owns
with Kuwaiti investors.
Annabel Astor, above,
founded Oka with designers
Sue Jones and Lucinda
Waterhouse. It includes an
interior design wing and is
on course to earn underlying
profits of about г4m on г30m
turnover this year.
Astor will stay on as a
chairwoman, alongside chief
executive Peter Taylor. The
sale will net a windfall for its
owners, who include the
Asprey jewellery family, the
former Lloyds Bank chairman
Sir Victor Blank and the
investment office run by
relatives of the James Bond
creator Ian Fleming.
chairwoman of the 30% Club,
said the drive was ?gaining
momentum?. However, she
added that there were ?still a
lot of big names missing who
we hope to get on board?.
Companies that have signed
up to the campaign include
Vodafone, Glaxo Smith Kline
and Marks & Spencer.
The lack of female leaders
is behind the disparities in
pay across corporate Britain.
Virgin Money, Ladbrokes
and easyJet have gender pay
gaps of more than 15%,
according to data released
yesterday. The bookmaker
blamed ?weak representation
(by women) at our senior
levels?. Easyjet had a 52%
gap. The airline said women
account for 6% of its pilots ? a
role that commands an
average salary of г92,400.
Uber sued by ad agency
for not paying up
Danny Fortson
San Francisco
A British advertising agency
is suing Uber over $19m
(г14m) in unpaid bills,
raising the stakes in a
year-long row.
Fetch Media, owned by
Japan?s Dentsu, has been
at odds with Uber since
last January when the
beleaguered San Franciscobased ride-hailing giant
stopped paying its bills.
In Fetch?s lawsuit, filed
last week in California, it
claimed that Uber was
?looking for excuses? not to
honour a disputed contract.
Uber hired Fetch in 2015 to
co-ordinate an campaign to
attract new drivers.
Last September it sued
Fetch in federal court,
accusing the agency of
running a ?Wild West of
online advertising fraud?.
Last month Uber abruptly
dropped its lawsuit.
The agency said Uber
was seeking to blame it
for ?responsibilities Fetch
never had?.
2
The Sunday Times January 7, 2018
BUSINESS
DIGEST
PROFIT SWELLS
AT CAMMELL
DRAGON SEES
RED AT JESSOPS
Photo retailer Jessops fell to
a loss last year after costs
spiked. A pre-tax profit of
г124,000 in 2016 tumbled
to a loss of г765,000 before
tax in the year to April 30.
The chain had collapsed
into administration in 2013,
before some of its 192
stores were saved by
Dragons? Den investor
Peter Jones, pictured.
Today there are 58 Jessops
outlets across the country.
Accounts filed at
Companies House also
show that the company
received г2.2m of loans
from other parts of Jones?s
business empire.
Revenue at Jessops was
up almost a quarter to
г99.9m, but new store
openings, increased
staffing costs and setting
up a new subsidiary tipped
it into the red.
Frank Jessop founded
Jessop of Leicester as a
specialist photographic
retailer in 1935.
CITY AWAITS
PERSIMMON
The Merseyside shipyard
building the г200m polar
research vessel RRS
Sir David Attenborough
has reported a big jump in
annual profits. Cammell
Laird, one of the country?s
last big shipyards, said the
rise from г2.4m to г7.4m
profit in the year to the end
of March was thanks to
currency hedging. Turnover
dipped 5% to г94.5m.
The company paid
г5.9m in dividends to
shareholders. Property
tycoon John Whittaker
holds the biggest stake.
The research vessel
became an unlikely star
when Boaty McBoatface
topped an online poll to
choose its name. The vote
was overruled by the
government, with the
science minister Jo
Johnson saying there were
?more appropriate names?.
Stock markets face rollercoaster
ride, warns investment guru
Higher rates could
see equity boom
?end in tears?
Tommy Stubbington
Investors should buckle up for a bumpier
ride and not expect a repeat of last year?s
returns despite a stellar start to 2018 for
stock markets, according to one of the
world?s most prominent investors.
Mohamed El-Erian, chief economic
adviser at Allianz, said 2017?s worldwide
rally, which saw shares climb by more
than 20% and bonds also rise, was a
result of a combination of factors that is
unlikely to be repeated.
Returns are likely to be far more modest this year, with greater volatility, he
said. ?Investors kept on buying last year
because of an improvement in the global
economy, but also because of what didn?t
happen. There was no policy mistake
from a major central bank, no major disruption to world trade, and no spike in
inflation,? said El-Erian, who was previously chief executive of the bonds investment giant Pimco.
His cautious forecast follows an exuberant start to the year. Equity markets in
Britain and America powered to new
highs last week, with the Dow Jones
industrial average breaking 25,000 for
the first time. Investors are betting on
growth picking up in Europe and America, and China continuing to avoid a
sharp slowdown.
?We still see a broad-based strong picture for equities going into 2018,? said
Mark Haefele, who oversees more than
$2 trillion (г1.5 trillion) of assets as chief
investment officer of UBS Wealth Management. ?Earnings are rising and GDP
growth is getting better, while central
bank stimulus remains in place.?
According to El-Erian, there remains a
big question mark over how markets
react as that stimulus is gradually withdrawn. The US Federal Reserve is
expected to continue raising interest
rates this year, while the European Central Bank is scaling back its quantitativeeasing programme.
Investors have been conditioned to
?buy every dip? in the nine-year bull market since the financial crisis, leaving
shares looking expensive, said El-Erian.
?The only way this doesn?t end in tears
is if economic fundamentals improve to
such an extent that they justify such high
valuations,? he added. ?The backdrop
has been improving on that front, but
there?s still a long way to go.?
CONSTRUCTION NEAR FIVE-YEAR LOW
The construction industry
is heading for its sharpest
annual decline in output
in nearly five years.
Official figures this
week are set to show the
sector?s woes deepened
in November, with
economists forecasting
a 0.9% contraction, the
worst since May 2013.
A survey last week
revealed the gloomiest
outlook for construction
companies in half a decade.
Brexit uncertainty and
sluggish economic growth
ANDREW HASSON
A TOAST TO BREAD AND BITTER
Hopes
fade for
big pay
rises
0.9%
Tommy Stubbington
Productivity growth during
the third quarter of 2017,
reversing declines in the
first six months of the year.
The rebound in output per
hour tempers some of the
gloom over productivity,
which has largely stagnated
since the financial crisis,
holding back economic
growth.
Persimmon
SARACENS BOSS
IN FASHION FLING
г30
25
20
15
J FMAM J J A SOND
Source: Thomson Reuters
Markets will be on alert
for signs of stress in the
housing sector when
Persimmon updates on
trading on Tuesday. The
York-based housebuilder
had a barnstorming 2017,
fuelled by Help to Buy
subsidies for first-time
buyers, but has been under
fire over a huge bonus
scheme for bosses.
Saracens rugby club owner
Nigel Wray has taken a
stake in a website that helps
designer brands liquidate
excess stock at low prices.
His investment in
blackbetty.com takes the
total raised by the fashion
platform?s founders, Phil
Harwood and Krassimir
Stankov, to г2.5m. They
hope to float the business
this autumn and pursue
acquisitions in Europe.
Black Betty acts like an
online-only version of
TK Maxx, although it is not
allowed to name the brands
it sells. It has a partnership
with Network 360, a
European wholesaler of
excess fashion goods.
Brussels freezes
out UK start-ups
Peter Evans
Small companies have quietly
been cut off from a key
European fund that
encourages financial
institutions to lend to them,
in a sign Brussels is closing
the door early on some of its
funding of UK businesses.
The InnovFin SME
guarantee, which encourages
lenders to finance high-risk
companies by guaranteeing
to cover some of the losses
if a loan defaults, is no longer
providing funds.
Since its launch four years
ago, the fund has committed
more than ?70m (г62m) to
Britain. It could confirm fears
European funding will dry up
after years of big investment.
Some venture capital
firms that relied on access to
European Union funds have
struggled to raise capital.
Last year, London-based
Hoxton Ventures, Seedcamp
and Episode 1 cancelled new
funds after the European
Investment Fund (EIF)
slowed its activity in Britain.
?Technically speaking,
the EIF is still open to UK
companies, but effectively
the door has been slammed,?
said Chris Manson, chief
executive of Newable, a
state-owned advice and loans
provider formerly known as
Greater London Enterprise.
are holding back big
projects.
The picture is more
upbeat for manufacturing,
which is expected to show
continued growth in this
week?s numbers from the
Office for National
Statistics.
Manufacturing has been
riding the coat-tails of a
pick-up in global growth
as the weak pound helps
exporters, while industries
more focused on the
domestic economy
struggle.
The Babylonians used stale
bread to make beer, rather
than throw it away. Now a
British company is brewing
with industrial quantities of
bread to slash food waste,
writes Liam Kelly.
Toast, founded in 2015,
takes bread from sandwich
manufacturers that do not
use slices from the end
of a loaf to a brewery in
Driffield, East Yorkshire. Its
range of beers includes
pale ales and a lager.
The social enterprise has
raised г700,000 through
crowdfunding and is
looking for a further
г400,000.
Founder Tristram Stuart,
pictured, said investors
must pledge to reinvest
capital growth in social
enterprises, charities or
another business that is
?doing good?. ?For every
г1 invested at this stage,
we will generate г3 for
charity in the next three
years,? he said. Toast
licenses its recipes to
breweries around the
world and gives 5% of
revenue to local charities.
Stuart, 40, started
Triumph owner Bloor
revs up family profits
John Collingridge
Building semi-detached
homes and Triumph
motorbikes helped the Bloor
family business to soaring
sales and profits last year.
Bloor Holdings, the
Derbyshire company behind
Triumph motorbikes and
Bloor Homes, grew profits
almost 50% to г185m in the
year to the end of June, while
turnover leapt 26% to г1.4bn.
The company paid a г7m
dividend to its founder, John
Bloor, the 74-year-old former
plasterer who started the
housebuilder in 1969. Bloor is
ranked 88th in The Sunday
Times Rich List, with a г1.5bn
fortune. He donated
г532,000 to the Conservative
Party during the year.
Bloor Homes sold 3,023
properties in that time, with
the average price of
г300,000 ? up 12% on a year
earlier. Housebuilding
contributed г161m of
operating profits, dwarfing
Triumph?s г23m.
The company attributed
the surging profits to a
buoyant housing market,
adding that it was aided by
the government?s Help to Buy
subsidy scheme and cheap
mortgage products. Profit
margins at Bloor Homes
swelled to 21% from 18.7%.
Triumph sold 63,404
motorbikes during the year,
up 13%. More than 86% of its
sales were overseas. Sales
volumes sent revenues up by
22% to г498.5m.
Triumph employs 2,000
people worldwide, including
800 at its plant in Hinckley,
Leicestershire. It has a factory
in Thailand.
Bloor bought the famous
brand out of receivership
in 1983, and it is run by his
son Nick Bloor. Its bikes
include the Tiger tourer and
campaigning against food
waste as a teenager,
feeding pigs unsold bread
from his local bakery. While
at Cambridge University,
he said he ?lived out of
supermarket bins?, as
the food thrown away
was still good to eat.
Britons are expecting smaller
pay rises this year, according
to a new survey, despite
widespread optimism that
wages are set to accelerate
after years of weak growth.
The survey of more than
5,000 consumers by Bank
of America Merrill Lynch
(BAML) shows that they
expect their pay to climb by
an average of just 2.4% in
2018, down from 2.7% last
year. With inflation running
at a higher rate, that would
mean a real-terms wage cut.
The findings ?challenge
the Bank of England and
consensus view that the
labour market is ?tight?
and that pay growth will
accelerate in 2018?, said
Rob Wood, UK economist
at BAML. The Bank expects
wages to rise by 3% this year,
as the four-decade low in
unemployment finally starts
to feed through to higher pay.
Workers themselves
appear less hopeful ? and
any sign that wages are
slowing again could cast
doubt on the Bank?s plans for
further rate rises following
the hike in November.
The survey also suggests
that consumers tightened
their belts over Christmas,
with 38% saying they planned
to spend less than they had
the previous year.
Saudis ?eye developer
in Earls Court row?
Ben Harrington
Triumph?s Nick Bloor with
actress Gillian Anderson
?modern classics? such as the
Bonneville Bobber.
Bloor Holdings also has an
equipment rental business,
Pickerings Plant, which made
г6m of operating profits on
г26m of sales. The group
ended the year with net cash
of г61m.
Tension is mounting between
Capital & Counties and the
London borough of
Hammersmith and Fulham
amid speculation a Saudi
predator is circling the
property developer.
The FTSE 250 company is
reportedly in the sights of
Olayan Group, a Saudi
investment firm.
It is said to be interested
in buying a large project to
redevelop Earls Court, west
London, from Capital &
Counties for about г500m.
Five years ago
Hammersmith and Fulham
council, then led by the
Conservatives, approved
Capital & Counties? г12bn
proposal to redevelop a
77-acre site in Earls Court.
The plan would involve
demolishing two housing
estates. However, the current
Labour-led administration is
lobbying for the borough
to take back control of the
West Kensington and Gibbs
Green estates.
Council leader Stephen
Cowan wrote to residents last
month, saying he was seeking
a firm assurance that the
company would not sell the
redevelopment project or
estates to a third party.
Capital & Counties
declined to comment.
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3
The Sunday Times January 7, 2018
BUSINESS
Bed maker
in race to
find saviour
Oliver Shah
The owner of the luxury bed
manufacturer Warren Evans
is racing to secure an
emergency sale as it slips into
loss-making territory.
Warren Evans Adams, who
started the company in 1978
with a couple of hundred
pounds borrowed from his
sister, is understood to have
hired the restructuring firm
Duff & Phelps to carry out an
accelerated sale.
Warren Evans, which has
14 showrooms in London and
southeast England, made pretax profits of г837,500 on
sales of г27.3m last year, but
is said to be on course to lose
about г2m this year.
Furniture retailers have
been described as canaries in
the coal mine in the current
consumer downturn.
Multiyork and Feather &
Black, both owned by the
Midlands businessman
Charles Wade, went into
administration in November
after failing to find a buyer.
DFS bought the Multiyork
brand and a handful of its
stores, while a Swedish
bedding company, Hilding
Anders, rescued the bulk of
Feather & Black.
Adams, 56, started out
making beds by hand in a
workshop in Clerkenwell, on
the fringe of the City.
He opened his first
showroom in Camden, north
London, in 1985 and
expanded steadily, carving
John Collingridge
NO PAYOUT FOR MACK
out a niche as an ethical
furniture maker. Warren
Evans uses timber from
sustainable forests and
promises to manufacture its
beds using as little energy and
water as possible.
The company?s workshop,
in Walthamstow, east
London, is heated by a
biomass burner that uses
wood offcuts and sawdust.
A source close to the
auction said Warren Evans
had been hit by a ?toxic
combination? of rising costs
and falling margins in the
past year, after trying to move
further upmarket by offering
upholstered beds as well as
traditional wooden frames.
Duff & Phelps is believed to
have called for expressions of
interest yesterday.
The sale could be
complicated by г2.5m of
retail bonds issued by Warren
Evans in 2013 to fund the
opening of new showrooms.
The bonds, which carry an
interest rate of 7.5%, were
marketed to customers who
bought into the business?s
ethical credentials. About
г2m is understood to be
outstanding, which could
deter potential buyers who
would prefer to take on the
business debt-free. The bond
investors could stand to lose
some or all their money if the
company goes into
administration.
Warren Evans and Duff &
Phelps did not respond to
requests for comment.
Carillion bailout plan
to keep it on the rails
The embattled builder
Carillion could be bailed out
by the government as it runs
out of road with its lenders.
The company, a big
contractor on the HS2
north-south rail line, is due
to submit a business plan to
a clutch of lenders in the
coming days, Sky News
MATTHEW MURPHY
reported. If new funds do
not come from the banks,
Carillion could be forced to
tap the government for
support, via emergency loans
or by renegotiating contracts.
It had average net debt of
up to г925m last year and a
г587m pension deficit in
June. Under a deal, banks and
pension funds are likely to
take stakes in the company.
Clothing sales
expected to dip
in festive trading
Oliver Shah
The closure of shows such as Miss Saigon has hit the bottom line at Cameron Mackintosh Limited
Profits have tumbled at Sir
Cameron Mackintosh?s
theatre production company
after the closure of shows
such as Miss Saigon in London
and Les Misщrables on
Broadway, writes Peter Evans.
In the year to March 31 last
year, profits before tax for
Cameron Mackintosh Limited
fell to г23.2m, compared with
г27.8m the year before.
Turnover fell 9.6% to г132.6m.
After paying himself a
dividend of г35m in 2016, the
theatre impresario received
no payout last year.
Mackintosh, 71, made his
name producing shows such
as Cats, Oliver! and The
Phantom of the Opera.
His production company
also owns eight theatres in
London?s West End, including
the Prince of Wales and the
Gielgud.
Forthcoming profits this
year are expected to be
?materially lower due to the
expense associated with the
House of Lords threat to
firms that let in hackers
RAY WELLS
Danny Fortson
San Francisco
Companies that allow their
customers? data to fall into
the hands of hackers could
be subject to US-style
class-action lawsuits, amid
concerns over security flaws
in the microchips used in
billions of electronic devices.
The House of Lords is
considering an amendment
to the Data Protection Bill to
make it easier for Britons to
sue companies that are
careless with their personal
information.
The proposed change,
tabled by Labour?s Lord
Stevenson of Balmacara
and the crossbench peer
Baroness Kidron, could leave
companies exposed to higher
compensation payouts if they
fail to stop cyber-heists.
?There are serious
problems in holding those
responsible for these
breaches to account,? said a
Lords briefing note, seen by
The Sunday Times.
The move follows Intel?s
Chinese net
giant eyes
Burma app
tie-up
Ben Harrington
Chinese internet giant
Tencent is eyeing a tie-up
with a Burmese social
network listed in London.
The owner of the WeChat
messaging app has held talks
with MySQUAR about
commercial partnerships and
a potential investment,
according to Asia-based
bankers.
Last week, the company,
which owns a messaging app
and online games, revealed
that it had received a takeover
approach from a mystery
M&S set for
Christmas
stumble
Baroness Kidron hopes data security will be taken seriously
revelation last week that
microchips in billions of
mobile phones, computers
and tablets are vulnerable to
hacking. Companies around
the world are this weekend
scrambling to protect
themselves from the flaws.
Intel chips are the brains
of a huge swathe of devices ?
including all Apple products
except its watch. It is unclear
to what extent the
vulnerabilities have been
exploited, if at all.
The frequency of hacks is
increasing. Last year an
attack on the credit agency
Equifax exposed the details
of 143m people, while Yahoo
revealed that 3bn email
accounts were hacked.
To bring a case in Britain,
solicitors must obtain the
buyer. However, Tencent has
not tabled a formal bid
approach, sources said.
Since its launch in 1998,
Tencent has become the
gateway to the internet for
nearly 1bn Chinese. It was
founded by software
developer Pony Ma
(Huateng), who is now one of
Asia?s richest men.
Tencent, one of the world?s
most valuable companies
worth nearly г400bn,
recently built a 12% stake in
the company behind
Snapchat. It operates an array
of online services, with users
able to pay for their groceries,
hail a taxi, and buy and sell
shares through WeChat.
By contrast, MySQUAR has
had a rough ride on London?s
AIM market since floating in
2015. Its shares have fallen
from 10p to just 2.15p, valuing
the company at г12m.
Millions
raised for
posh homes
rental site
Peter Evans
An upmarket holiday home
rental service, which lists
properties only when they
have passed 150 separate
tests, has raised г5.7m to
expand outside London.
The Plum Guide, founded
two years ago by
entrepreneur Doron
Meyassed, assesses homes on
criteria including mattress
softness and shower
pressure. The funding round
was led by Octopus Ventures
and included investments
from BGF Ventures and the
consent of injured parties,
one by one. The amendment
would introduce an ?opt out?
system, under which cases
could be brought on behalf
of all victims, without first
seeking permission.
The difficulty of building
a pool of plaintiffs means
that in many instances it is
deemed more trouble than it
is worth. Other cases capture
a tiny fraction of the affected
individuals. In 2014, for
example, the personal and
pay data of more than
100,000 current and former
employees of supermarket
giant Morrisons was hacked.
The resulting lawsuit, which
continues, includes just over
5,000 plaintiffs. Any victory,
in other words, would benefit
just 5% of the affected group.
?Companies can act in the
almost certain knowledge
that they won?t be held to
account,? said Kidron. ?I
think the amendment?s
greatest value may be in
getting companies to take
data protection seriously in
the first place.?
founders of luxury travel
website Secret Escapes.
Meyassed, 35, said the cash
would be used to grow the
business outside the capital,
where it currently lists 1,082
properties, and to invest in
more accurate technology for
testing homes. ?We?re . . .
[taking] the model we?ve built
to other great cities around
the world,? he said, adding
that Paris will be next.
The Plum Guide uses a
filter to scan websites such as
Airbnb to find highly rated
properties. It then
approaches owners, who
must be willing to clean the
property daily and keep the
fridge full of snacks.
The company faces stiff
competition. Onefinestay,
seen as an upmarket version
of Airbnb, was bought for
?148m by hotels giant Accor
two years ago.
theatre works?, according to
accounts filed at Companies
House last week.
As well as producing
shows, the company restores
theatres.
Revenues in the UK and
continental Europe, by far the
group?s biggest source of
business, fell 9.5% to г65.3m.
Miss Saigon, which has
since opened on Broadway,
completes a national tour in
Edinburgh and Southampton
in the spring.
Marks & Spencer is expected to lift the lid
on the volatile state of high street trading
this week when it reports a substantial
drop in fashion and furniture sales.
The retail industry?s bellwether is forecast to produce a 3.4% decline in clothing
and homeware sales, and a 1.1% dip in
food sales. The predictions suggest that
M&S?s trading worsened over the Christmas period. Takings in both its divisions
were almost flat in the preceding quarter.
M&S?s results will help analysts form a
more accurate picture of consumer
behaviour over the festive period, following a week of contradictory updates.
Next?s shares jumped last Wednesday
when it announced better than expected
Christmas trading, with sales up by 1.5%
compared with previous guidance of a
0.3% drop. However, surging sales at its
online division more than masked a 6.1%
slump in its high street outlets.
Debenhams disappointed investors
the next day with a 2.6% drop in sales at
its British department stores ? and a
profit warning.
Black Friday discounts were again
seen to have dragged forward Christmas
demand and fuelled the transition to
online shopping. The accountancy firm
BDO said footfall in high streets and shopping centres fell by 1.1% during Black
Friday week.
Clive Black, an analyst at Shore Capital, said: ?Going into Christmas, the
clothing market was very difficult in general. M&S has been focusing on full-price
sales, so that will hit its headline clothing
and homeware number. There?s no
doubt it was a very volatile last four
months of the year, but every business
will have had an exceptionally tough
time, so M&S will not be in a club of one.?
Archie Norman, the former Asda and
ITV chairman, has been trying to speed
up a turnaround of M&S since arriving as
chairman last September. In November,
he said he had experienced ?good sur-
prises and some less good surprises? in
his initial examinations of the company.
Despite predictions from some analysts
that he would clash with Steve Rowe,
Norman praised the M&S chief executive
for ?slaughtering some sacred cows?.
Rowe has got rid of underperforming
clothing lines such as Collezione, Indigo
and North Coast, and closed international stores including M&S?s Paris flagship on the Champs-Elysщes. Last week
M&S announced the sale of its 27 shops in
Hong Kong and Macau to its longstanding
franchise partner in Asia, Al-Futtaim.
Dan Homan, an analyst at Citigroup,
said he was ?cautious about M&S?s strategy to sustainably reignite top-line [sales]
growth?, but added that there were
?some encouraging signs around fullprice clothing sales?. He said Citi?s household cashflow model pointed to a rise of
just 0.4% in discretionary spending this
year. ?We are wary of downside risks to
this forecast from consumer confidence
and/or credit conditions,? he added.
GROCERS FATTEN UP
The three big London-listed grocers
are forecast to produce robust
Christmas trading updates this week,
despite the continuing growth of the
discounters Aldi and Lidl.
Analysts predict a 1.3% sales rise at
Morrisons, which is due to report on
Tuesday; a 0.9% lift at Sainsbury?s,
which will update the market on
Wednesday; and a positive 1.7% to
2.5% from Tesco on Thursday.
The German chain Aldi has already
announced a 15% jump in December
sales, although it has not released a
like-for-like number.
Tesco, the market leader, and
Sainsbury?s, the No 2, are among the
more short-sold stocks in the
FTSE 100. Tesco?s stock out on loan ?
an indicator of short interest ? has
more than doubled to 8% in the past
year, while Sainsbury?s has increased
by a fifth to 13.6%. However, analysts
at UBS said the big grocers were
minimising shoppers? reasons for
switching to the discounters.
4
The Sunday Times January 7, 2018
BUSINESS
Not in front of the children, please, Snapchat
Simon Duke Agenda
A
quick question: would you be
happy if your children were
shown a commercial for a
40% proof Jamaican rum while
watching an afternoon movie
on ITV? No, nor would I. But
you need not worry. There are
rules that prevent the
marketing of alcohol before the 9pm
watershed.
The same, alas, cannot be said for the
social media platforms where our
children increasingly congregate. Unlike
broadcasters and publishers, Facebook,
Instagram and Snapchat are not subject
to regulation. There are mountains of
inappropriate material on these
platforms, and little to stop children
stumbling on them.
This problem was underlined last
week when spirits giant Diageo pulled
out of Snapchat over concerns that its
ads were being shown to people under
the age of 18. Its Captain Morgan brand
had been a ?sponsored lens? campaign
on Snapchat, allowing British users to
superimpose the rum brand?s pirate
mascot on to selfies. It?s the kind of
harmless frippery commonplace on
social media sites.
What Diageo did not realise was that
the tool was being shown to thousands
of under-18s. Under the advertising
code, media companies are not allowed
to show alcohol commercials if 25% of
the audience is below drinking age, but
the FTSE giant had been assured by
Snapchat that 77% of its British users
were old enough to buy alcohol. The
Captain Morgan campaign could run.
As it turned out, Snapchat?s data is
unreliable, to say the least. The
minimum age for setting up a Snapchat
account is 13. The company, however,
does not check users? credentials when
they register and plenty of pre-teens
provide an incorrect date of birth to get a
Snapchat account.
Its users are, in reality, considerably
younger than the data Snapchat
provided to Diageo to win its business.
The spirits maker had, unwittingly,
fallen foul of the rules. Last week,
Britain?s advertising watchdog rapped
Captain Morgan on the knuckles for
failing to take ?sufficient care? that its
ads were not being shown to minors.
Diageo immediately pulled out of
Snapchat.
I?d imagine that chief executive Ivan
Menezes was both angry and
embarrassed. His marketing team had,
in effect, been hoodwinked by the social
media giant.
The row may be small beer when set
against the YouTube furore last year, but
it shows that, despite the endless
scandals, big tech still treats its users and
advertisers with disdain.
Facebook has rightly been vilified for
disseminating fake news during the US
presidential election and failing to stamp
out cyber-bullying.
Last week, founder Mark Zuckerberg
penned a new year letter, pledging to
heal the wounds in society and ?protect
our community from abuse and hate?.
We have heard these hollow pieties
from the Facebook founder many times
before. He and his peers have been
blinded by avarice for too long. Unless
they open their eyes and clean up their
houses soon, regulators will do the work
for them.
BT
500p
400
300
200
2013
2014
2015
2016
2017
Source: Thomson Reuters
If they don?t clean
up their houses,
regulators will do
the work for them
Has the Premier League peaked?
Since the Premier League?s inception in
1992 (then the Premiership), broadcast
rights auctions have been a cause for
jubilation in football club boardrooms.
Like bubbles in a champagne flute, the
bonanzas just kept going up and up.
The latest round of bidding, which
kicks off in coming weeks, could prove
sobering. The last sale of domestic
broadcast rights in 2015 saw Sky and BT
splash out more than г5bn for a threeyear deal ? a 70% jump from the
previous contract.
However, the era of hyper-inflation
could be drawing to an end. Football
viewing figures are lacklustre. BT is
operating under great constraints after
a number of own goals, including an
accounting scandal in Italy. Sky,
meanwhile, is looking to pour more of its
cash into high-end dramas, while it waits
to be subsumed by Fox and then Disney.
Sky and BT also appear to have arrived at
an informal armistice. Last month they
signed a deal to sell each others? sports
channels.
The Premier League?s great hope is
that one of the Silicon Valley giants will
enter the fray. That sounds like wishful
thinking. It?s far more likely that Amazon
and Facebook will bid for the much
cheaper international rights packages.
As they contemplate the January
sales, club chairmen would do well to
pause and reflect.
A moral compass
Most FTSE 100 chief executives would
jump at the chance to join the prime
minister?s council of business leaders.
Not Richard Cousins, the boss of
Compass who died with his family in a
plane crash on New Year?s Eve.
Several years ago, he was invited to
join David Cameron?s cadre of top
corporate advisers. When he made it
clear that he would sign up only if he was
allowed to speak his mind, the invitation
was withdrawn.
It was the measure of a forthright
man, who valued his principles more
highly than a gong. His passing, at just
58, is a big loss for the world of business.
Iain Dey is away
The most important trade
deal is on our doorstep
Now it?s no more
Mr Nice Trump
David Smith Economic Outlook
Irwin Stelzer American Account
I
always try to start a new year in a
mood of good cheer, and it is only in
the past few days that I have come
to realise the comic possibilities of
Brexit. While some would call it a
black comedy, who could fail to
have been amused by David Davis?s
?dog ate my homework?
embarrassment a few weeks ago when
the 58 detailed sectoral Brexit studies he
had boasted about turned out to be
nothing of the sort.
Then there was Theresa May?s dawn
dash to Brussels in December to secure
an agreement, days after the Democratic
Unionist Party had scuppered a deal to
move on to the second phase of Brexit
negotiations. There will no doubt be
more such dashes; not so much shuttle
as shuttlecock diplomacy.
Many people have also seen the
comedy in the activities of Liam ?Air
Miles? Fox, the international trade
secretary, who is reported to have
travelled 219,000 miles in the 18 months
since he took on the job. He provoked
mirth by holding out the possibility of
Britain joining the successor to the
Trans-Pacific Partnership (TPP), the
trade grouping apparently fatally
wounded by Donald Trump?s
withdrawal. With America out, the
grouping consists of Australia, Brunei,
Canada, Chile, Japan, Malaysia, Mexico,
New Zealand, Peru, Singapore and
Vietnam. Though Britain is not
committed to replacing America in a
new Pacific partnership, Fox has not
ruled it out and his ministerial
colleagues say geography is no barrier to
Britain?s participation.
The cue for the mirth here is that this
is happening as Britain is leaving a
perfectly good trade arrangement with
the European Union, an export market
more than five times the size of the 11
TPP signatories. It is also that, whatever
ministers may say about geography, it
matters hugely for trade and, Brexit or
not, Britain is not about to be towed into
the Pacific.
I am no cheerleader for Fox, but the
barbs seem a little harsh. Travelling
around the world is exactly what a trade
secretary should be doing. The
international trade department, started
from scratch in the wake of the Brexit
referendum, and having to cope with a
gap of more than 40 years since
Whitehall last had expertise in trade
negotiations, has gone about its task in a
sensible way.
In contrast to Davis?s Brexit
department, known as Dexeu, where
staff turnover is running at 9% a quarter
and where the top civil servant, Oliver
Robbins, was moved to the Cabinet
Office in September to co-ordinate
negotiations for the prime minister, the
trade department is quietly getting on
with it.
Trade negotiators have been
recruited, and more are being sought.
And, while Britain lacks firepower and
expertise compared with the EU,
America and many other countries, the
lost ground is gradually being made up.
There is nothing wrong, either, in an
ambitious approach to future trade
deals. Most of the supposed freedoms
gained from leaving the EU are illusory,
but the freedom to negotiate trade deals
? assuming there is no U-turn on
belonging to the customs union or its
equivalent ? is one of them. Britain
belonging to a Pacific partnership may
seem ludicrous but there is no harm in
trying, and there may be goodwill as well
as trade to be gained.
The big prizes are
China, America
and India. All will
be problematical
Britain runs an overall trade surplus,
in goods and services, with the non-EU
world, in contrast to the deficit with the
EU. The three big prizes for post-EU
trade deals are China, America and
India, which will be the world?s big three
economies by the middle of the century.
All three will be problematical, with
conditions we may well not like, but they
will need to be done, even if they take a
very long time.
That is why there are two important
provisos. The first priority for Britain?s
future trading arrangements, which has
to come before any new deals, is to roll
over or ?grandfather? the existing trade
agreements the EU has with more than
60 other countries.
This will not be easy, as a new paper
from the UK Trade Policy Observatory
points out, and it may be necessary to
prioritise some of these agreements.
Agreement has to be reached by March
2019 and will involve trilateral
negotiations between the EU, Britain
and the third countries concerned. One
difficulty that may arise is over
definitions of the domestic content in
exports once Britain leaves the EU.
Another will be over regulatory
divergence. I shall return to this.
The second proviso is that far-flung
trade deals will be of little use if not
accompanied by a comprehensive trade
agreement with the EU that is as close to
single market membership as possible.
The EU is Britain?s biggest trading
partner and, for reasons of both
geography and history, will be for the
foreseeable future.
Though the EU?s share of Britain?s
exports has declined in recent years,
thanks to the financial and eurozone
crises and the rise of emerging
economies, the EU share of Britain?s
imports has been broadly stable. The
export share, moreover, is now showing
signs of increasing, reflecting the strong
recovery EU economies are now
achieving. The share of Britain?s goods
exports going to the rest of the EU rose
THE EU IS BRITAIN?S BIGGEST
TRADING PARTNER?
Goods and services trade with the rest of the EU
Imports
Exports
60% of total
55
50
45
40
2000
2005
2010
2015
Source: ONS
? BUT BRITAIN HAS A TRADE SURPLUS
WITH THE REST OF THE WORLD
Balance of goods and services trade
With EU countries
With non-EU countries
2%
1
0
-1
-2
-3
-4
-5
2000
Sources: ONS, House of Commons Library
2005
2010
2015
from 48% in 2015 to 48.2% in 2016 and
48.6% in the first 10 months of 2017.
This will be the year the government
has to move from vague generalities
about Britain?s future trading
arrangements to the specifics of at least
achieving an outline deal by the time of
Brexit, with the details then to be
negotiated. The prime minister will find
she can no longer keep winging it in the
hope of keeping her cabinet together.
Cards-on-the-table time is approaching.
There is nothing wrong, meanwhile,
with the trade secretary travelling the
world talking potential deals, but this
cannot be either/or; the most important
deal to be negotiated is on our doorstep.
PS
Some housekeeping. Last week I
remarked on Alan Clarke of Scotiabank?s
success in topping my forecasting league
table two years running, something I
could not recall happening before. But
Garry Young, who has just returned to
the National Institute of Economic and
Social Research (Niesr), reminds me that
this was achieved by Niesr in the mid1990s, when he was doing the forecast.
The memory is clearly not what it was.
Now to my Christmas quiz. One
question caught out most people: the
main measure of inflation used by the
Office for National Statistics (ONS). It is
not CPI (the consumer prices index), as
most said, but CPIH, the consumer
prices index including owner-occupier
housing costs. The ONS has work to do.
There was an interesting alternative
answer on which global rock superstar
studied at the London School of
Economics. I had Sir Mick Jagger in mind
but several said Thomas Piketty, author
of Capital in the Twenty-First Century,
who also studied at the LSE and was said
to be a global rock superstar (of
economics) at the height of his recent
fame. It is a legitimate answer.
The answers: 1 Which global rock
superstar studied at the LSE? Sir Mick
Jagger/Thomas Piketty. 2 What is the
main measure of inflation now used by
the ONS? CPIH. 3 Who or what
celebrated 20 years of independence in
2017? Bank of England. 4 With which
branch of economics is this year?s Nobel
prize winner associated? Behavioural
economics. 5 What Treasury tradition
ended in March? The spring budget.
6 The Bank of England raised interest
rates in November. How long since the
previous increase? 10 years, four
months. 7 Who is taking over from
whom as chairman of the Federal
Reserve Board? Jerome Powell from
Janet Yellen. 8 Who claimed the
government had done 58 sectoral Brexit
impact studies ?in excruciating detail??
David Davis. 9 George Osborne has
taken on at least six roles. Name three.
Evening Standard editor/Northern
Powerhouse chairman/BlackRock
adviser/Manchester University honorary
professor/McCain Institute fellow/
Hoover Institution fellow. 10 Which
European departure did we mark the
25th anniversary of in September? Exit
from the European exchange rate
mechanism (ERM).
I asked for alternative words for Brexit
and got some entertaining ones,
including Bromnishambles and
Breitgeist. I fear we are stuck with Brexit.
Thanks to all who entered. The two
winners, from a large hat, are Alan
Gregory, emeritus professor of finance
at Exeter, and Christopher Coulter.
Signed books are on their way to them.
david.smith@sunday-times.co.uk
I
f Donald Trump set your teeth on
edge in 2017, prepare for a grinding
2018. The story coming out of the
White House is that the need to
garner congressional support for his
tax cuts forced the president to
restrain his reformist-populistbelligerent instincts until that piece
of signature legislation was on the books.
It now is, for better (Republicans) or
worse (Democrats), and the president
promises we will see Trump unleashed
in this new year. So you ain?t seen
nothing yet. No more Mr Nice Guy.
Most people paid little attention when
the Committee on Foreign Investment in
the United States (CFIUS) refused to
approve the acquisition of MoneyGram
International by Ant Financial,
controlled by Chinese billionaire Jack
Ma, the founder of Alibaba. Or when the
president, acting on the advice of the
CFIUS, blocked an attempt by Canyon
Bridge Capital, backed by the Chinese
government, to acquire Oregon-based
Lattice Semiconductor Corp. Both deals
were shot down on national security
grounds. Here?s why.
Trump has decided that his faith in
Chinese president Xi Jinping was
misplaced. Xi is helping North Korea
evade UN sanctions by arranging midocean transfers of oil to Chinese tankers
for delivery to the regime. So there is no
longer any reason to tolerate China?s
unfair trade practices. Or to listen
politely while Xi travels the world
presenting himself as the new champion
of free trade, all the while subsidising
China?s exports, stealing American
intellectual property, and dumping the
products of his over-expanded steel and
other industries on world markets.
Don?t think what we face this year is
just another trade war, fought over jobs
and factories. In trade with Mexico and
Canada, the president will settle for
tariffs and quotas. That just won?t be
enough with China.
What is involved is a clash of visions.
One was set out by Xi when he was ?reelected? by the Communist Party to lead
it to new heights ? or, as he prefers to see
it, restore it to former heights of military
and industrial prominence.
The competing vision, which treats
trade as a geopolitical weapon, is laid
out for Trump in our new National
Security Strategy: ?China and Russia
challenge American power, influence
and interests, attempting to erode
American security and prosperity.?
Military strength depends on
economic strength, and economic
strength on ?no longer turn[ing] a blind
eye to violations, cheating or economic
aggression? ? as previous
administrations have done.
Having decided enough is enough,
Trump has consulted his undoubtedly
dog-eared copy of The Wealth of Nations
and taken Adam Smith?s advice: ?When
some foreign nation restrains . . . the
importation of some of our
manufactures . . . Revenge . . . naturally
dictates retaliation . . . [like] duties or
prohibitions upon the importation of
some or all of their manufactures.?
The great Scot didn?t get around to
advising what to do about barriers to
inbound investment, but the same
principle clearly applies to Beijing?s
insistence that US companies have a
Chinese partner, to which they must
turn over their intellectual property. I
recently met a couple from the north of
England, both of whom work in a factory
in which the Chinese have invested. The
deal includes a requirement for a
reciprocal exchange of intellectual
property. ?That?s a one-way street; we
send everything, they send nothing.?
China is only one item on Trump?s
agenda for 2018. Another is a large
infrastructure programme, which he
costs out at $1 trillion. My guess is he
wants to make certain that it is larger
than Barack Obama?s $825bn stimulus
package; ?yooge? often does not suffice
when ?yoogest? can be claimed.
It?s the same with the tax cuts, which
Trump says are ?the biggest in the
history of our country? ? never mind
that presidents Truman, Johnson,
Reagan and Obama all reduced taxes by
a larger percentage than Trump?s 0.9%
of GDP. Still, the move will increase the
national debt over the next decade by
about $1 trillion ? in effect allowing us to
Don?t think that
what we face this
year is just
another trade war
spend more by leaving a bigger pile of
IOUs to our children and grandchildren.
Republicans, who reluctantly went
along with the debt increases resulting
from the tax cuts, will probably resist
imposing another trillion dollars of debt
on future generations. No problem: the
Trump team is devising incentives for
the private sector to fill the potholes,
repair crumbling bridges and modernise
decrepit airports. One plan is to provide
government guarantees for privately
issued bonds backed by user fees ? a
form of government expense that is less
obvious to the casual observer.
The Democrats will not agree to
?profiteering? by the private sector, or to
the waiver of environmental and other
restrictions that drag out delivery times
? waivers on which Trump is insisting.
The compromise solution might turn out
to be something not unfamiliar in the
UK: public/private partnerships, or
having projects such as toll roads and
airports paid for by user fees, others
with taxpayer money.
Finally, another item high on the
agenda is entitlement reform, without
which red ink will never turn black in the
federal ledgers. The Republicans don?t
have the votes to take an axe to
entitlement spending, but they believe
they can develop incentives for
recipients to move from welfare to work.
That reform will probably have to wait
for the conclusion of the congressional
elections in November.
All of this assumes that neither Trump
nor Kim Jong-un decides to prove who
has the bigger nuke.
irwin@irwinstelzer.com
Irwin Stelzer is a business adviser
5
The Sunday Times January 7, 2018
BUSINESS
Welcome to the stately homes of
England ? and their start-ups
Needy aristocrats have relied on lions to pay their way. Today it?s entrepreneurs. reports Sabah Meddings
C
TOM STOCKILL / MARK BOURDILLON
asey Dennison hunches over
his keyboard, transfixed by
the streams of numbers flashing across his computer
screen. The 45-year-old
trader is monitoring the
price of hog and cattle
futures on a live feed from
the
Chicago
Mercantile
Exchange. However, the
American is not, as might be expected,
placing his bets from a cramped City
dealing room. After tiring of his commute
from Kent to London, he has set up shop
in a barn in rural Norfolk.
Dennison is renting office space from
Thomas Edward Coke (pronounced
Cook), the 8th Earl of Leicester ? an
entrepreneurial landowner hoping to
lure businesses into swish new offices on
his 25,000-acre Holkham Hall estate.
The 52-year-old earl is one of a new
breed of aristocrat dragging their creaking manors, crumbling farm buildings
and rolling parks into the 21st century.
The future of their historic properties
depends on signing up City types, such as
Dennison, as tenants.
Britain?s great estates have been forced
to face up to modern-day life. Once, the
?big house? was the bedrock of rural society ? providing jobs, homes and food for
local people. However, crippling death
duties and the transformation of agriculture have cast a cloud of uncertainty over
these storied rural piles.
Brexit, too, is proving a concern for
many landowners. Last week, environment secretary Michael Gove signalled
that farmers would continue to receive
LORDING IT
IN NUMBERS
25,000
г55,000
The size in acres of the Norfolk
estate of the Earl of Leicester
Extra amount the earl must pay to get
broadband into his estate office
г376,000
Rome. Lu
Luckily for him, his friend, Monica
Vinader ? a jewellery designer ? was
looking for
f new digs after outgrowing her
existing site in the nearby village of DockThen, he experienced a problem
ing. Th
familiar to most rural businesses and
famil
homeowners: how to obtain a broadhom
band service fit for the digital era.
ban
??We thought our biggest concern
whe
when we changed those sheds and
barn into offices was getting elecbarns
tric
tricity there, but, of course, it was
the internet,? he said wryly. ?That is
the most important thing now, and
the biggest impediment to
pr
progress.?
The earl is about to pay an extra
г5
г55,000
to get broadband to his
es
estate
office. It will take him 20
ye
years
to recoup his outlayon the
offi
offices,
but then his family has
alwa taken a long-term view on its
always
inves
investments.
?We first bought land
here in 11609 and first lived here in 1612,?
he said.
The amount that the Marquess of
Salisbury received in farm
payments from Brussels in 2016
the г3bn they already get from Europe?s
Common Agricultural Policy (CAP) until
2024. However, he vowed to end ?unjust?
subsidies for rich landowners.
They are already scrambling to modernise their properties. The aim is to create businesses with revenues that are
durable enough to withstand changes in
government policy. Servants? bells have
been replaced by walkie-talkies, valets by
PAs, and barns and rickety farm buildings
transformed into modern office spaces.
The trend is transforming old estates
across Britain. In North Yorkshire, the
4th Marquess of Zetland, Lawrence Mark
Dundas, 80, has renovated a 100-year-old
stable block into premises for 30 businesses ? including the regional office of
the Country, Land & Business Association
(CLA).
Christopher Price, director of policy at
the CLA, an organisation for owners of
land, property and businesses in rural
England and Wales, said estates have
long been run as companies, with farming, shooting and tourism all providing
income for estate owners.
However, landholders have woken up
to urbanites? growing desire for a more
tranquil lifestyle. ?People are increasingly attracted to the idea of being able to
work in the countryside, for the quality of
life and everything that goes with it,? he
said.
Robert Gasgoyne-Cecil, 71, the 7th Marquess of Salisbury, has kept the roof on
Hatfield House, a vast Jacobean pile in
Hertfordshire, by letting it to film crews.
Over the years, it has featured in a number of blockbuster movies, including two
Batman films and the Lara Croft franchise. The marquess has also helped to
keep the lights on by hosting chamber
music concerts.
However, the old stableyard at Hatfield
House is now home to a slew of small
enterprises, including an award-winning
dog-grooming salon, a gunsmith and the
base for Fiona Rae, a jeweller to the
Prince of Wales.
The marquess has higher ambitions.
He is planning to build a science park
next to the railway station in Hatfield ?
which stand opposite Hatfield House ?
taking advantage of the town?s position in
the heart of the ?golden triangle? of
Oxford, Cambridge and London.
Like generations before him, there is
one financial burden looming over the
former Conservative MP and leader of the
The Marquess of Salisbury, top, at Hatfield House, Hertfordshire, where jeweller Fiona Rae is based, and the Earl of Leicester outside Holkham Hall, Norfolk
House of Lords: inheritance tax. He has
tried to minimise the duty ?like all sensible people?. However, he still complains
of having to pay ?a lot? in 10-year-charges
that are due on any trusts. ?And that?s
before anyone dies,? he said.
?Both the 10-year charge and planning
for inheritance tax on death are a very
considerable burden on the estate, and
certainly restrict its ability to invest and
carry on a normal business.?
The marquess voted for Brexit ? even
though Gascoyne Farms received
г376,620 in CAP payments in 2016,
according to accounts filed in Companies
House. He argues that the European
Union is an ?ancien rщgime, incapable of
adapting to the new bottom-up societies?
of today.
?Existing institutions of government
are increasingly found to be inadequate
for this new world and are always caught
flat-footed,? he said.
Nowhere is this more apparent than in
agriculture. The CAP has ?killed what
was once the innovative genius of British
agriculture?, he said, and turned farmers
into ?subsidy junkies?.
After the Second World War, the privately held stately homes were on their
uppers, with their owners having to
shoulder hefty death duties or pay high
maintenance costs.
The nadir came in 1955 when a grand
FARMERS MUST ADAPT TO THE LIE OF THE LAND AFTER BREXIT
Aristocrats are not the only ones
shaking up their business models. Last
week, environment secretary Michael
Gove gave an early indication of how
the government will try to deal with
one of the thorniest Brexit issues: how
to sustain British agriculture once EU
subsidies to UK farms come to an end.
Gove guaranteed farmers the same
level of subsidy that they now receive
under the EU?s Common Agricultural
Policy until the 2022 general election
? and possibly for a further two years,
subject to a consultation.
However, any post-Brexit deal will
come with strings attached. Farmers
currently receive subsidies based on
the amount of acres they own ? an
arrangement that ?doesn?t really
reward efficiency?, said Gove.
One radical reform he has mooted is
linking future farm subsidies to public
benefits ? such as opening more land
for public use and protecting wildlife.
Some landowners could have to upend
their business models.
Even with the г3bn EU subsidies and
the protection of quotas and tariffs on
produce from outside the trading bloc,
many traditional, medium-sized farms
barely break even. Making sure farms
do not go bust after losing EU
subsidies ? and, potentially, access to
the single market ? or suffer from a
lack of migrant labour will be among
the government?s hardest Brexit tasks.
house was being demolished every five
days. The National Trust stepped in to
save some from ruin, but some aristocrats decided to take matters into their
own hands and opened their gates to the
public. Thus, Longleat gained its lions
(under the 6th Marquess of Bath), inspiring Woburn to create its safari park
(under the 13th Duke of Bedford), while
Goodwood has its motorsport (most
recently overseen by the 11th Duke of
Richmond and Gordon, following in his
grandfather?s footsteps).
The Marquess of Salisbury still views
his family?s estate as a linchpin for the
local community, and his methods
appear to be paying off. In Cranborne,
Dorset, where he owns vast tracts of land,
he sold off part of his holding so that
affordable houses could be built. He has
also converted some of his properties in
the area into commercial premises,
where artisans, brewers and cheese-makers have set up micro-businesses.
The measure of success, he said, was if
?more people come to work in the village
than leave and go out to work?. ?You
want to feel that people don?t think this is
the distant house on the hill to which they
never get access.? he added.
In Norfolk, the Earl of Leicester is in no
doubt that the role of great estates is as
important as ever. ?We?re employing
more people now than we ever have,? he
said.
The earl, who succeeded to the title in
2015, has taken an entrepreneurial
approach, borrowed from his friend
Roger Tempest of Broughton Hall in Skipton, North Yorkshire.
Tempest, 54, has converted his old
farm buildings into a business park with
52 small enterprises, employing 600 people. ?He?s made a really good go of it and
I?ve always wanted to emulate him,? the
earl said, reclining on a wooden armchair
in his ?smoking room?, underneath a
painting by Luigi Vanvitelli of the Tiber in
Servants? bells
have been
replaced by
walkie-talkies,
and rickety barns
are now offices
The earl has modernised, running the
estate as a professional operation, with a
chief executive and department heads.
?When dad retired 11 years ago, I thought,
?Right, we?ve got to restructure?. We had
too many pots and it was losing focus.?
His Longlands studios, where Vinader
and her team are based, have serviced
offices, too ? almost a rural version of We
Work.
Encouraging people ? such as Dennison, the hog futures trader ? to choose to
move to Holkham has been a challenge.
Drinks parties and perks such as weekly
boot camp sessions encourage people to
stay. However, while the Marquess of
Salisbury and his cohort seek to modernise, there is much that hasn?t changed
about the aristocratic world.
On the way to interview him in the cavernous study of Hatfield House ? a room
out of bounds to the public and dripping
with paintings ? I was reminded to
address him as Lord Salisbury, just in
case I forgot.
6
The Sunday Times January 7, 2018
BUSINESS
TOM STOCKILL
The fast-food
boss revamped
the restaurants,
made the menu
healthier and
raised profits.
Yet the brand is
still a punchbag
INTERVIEW
SIMON DUKE
T
he boss of McDonald?s is in
no mood to cede more
ground to the healthy-eating
brigade. For now at least.
Steve Easterbrook ? the British chief executive of the fastfood
giant
?
recently
launched vegan burgers in
Scandinavia and kale salads
in California.
So when, I ask, will my vegetarian wife
be able to order such worthy fare at the
company?s UK outlets?
?I wouldn?t hold your breath,? says the
bulky 50-year-old, leaning forward and
placing his elbows on a Formica table in
one of those restaurants.
There?s nothing wrong with kale, he
explains, but McDonald?s won?t be
?building the menu? around the crunchy
leaf any time soon. ?If you can have a
hotter, fresher and tastier burger and hot
fries ? that?s how you?re going to satisfy
the majority of people,? he says.
Yet the Watford-born Easterbrook has
had to bend to changing fashions since he
took the helm at McDonald?s three years
ago. Back then, global sales at the world?s
largest restaurant chain had fallen for the
first time in more than a decade. It was ?
and remains ? a punchbag for critics of
industrialised food production and
globalisation, and for anti-tax avoidance
campaigners.
As if that weren?t enough, the chief
executive had to confront an existential
crisis: millennials had begun to hunger
for tastier and fresher grub.
Easterbrook, who oversaw a turnaround of McDonald?s British business in
the mid-2000s, was forced into radical
action. He culled several layers of middle
management in a sweeping overhaul of
McDonald?s global empire, and ordered a
revamp of its 37,000-strong chain and the
menu. The tough measures have begun
to bear fruit. Profits are growing again
and investors are enjoying supersized
returns. McDonald?s market value has
nearly doubled to $140bn under his
charge.
Our meeting is on the A41, in one of the
newly spiffed-up restaurants, just outside
the chief executive?s home town. For Easterbrook, the unremarkable location has
significance: it is the branch where he cut
his teeth as a manager in the late 1990s.
The Golden Arches have changed substantially since then. Gone are the lurid
green and yellow interiors, replaced by
more sober wood-and-stone hues. There
are large touchscreen kiosks where customers place orders, with food cooked
fresh and delivered to their tables.
Easterbrook says McDonald?s had
been brought low by its failure to recognise the revolution in consumer tastes.
?We had lost our way. Our business
always prospers when we stay really
close to the customers, but we were stagnant while the outside [world] was
changing.?
With his bear-like frame, five o?clock
shadow and craggy features, Easterbrook
is an imposing, almost intimidating presence. He wears a casual blue shirt and
navy blue sports jacket, and could easily
pass for a nightclub bouncer, rather than
the head of a company in the Dow Jones
index of America?s top 30 companies.
Easterbrook is one of just three Britons
in that clique, alongside Ian Read of the
drugs giant Pfizer and James Quincey at
Coca-Cola.
Yet for all his burly blokeishness, Easterbrook is softly spoken and has a
Putting the artisan in the Big Mac: ?People?s palates are getting broader,? says Steve Easterbrook, ?and they?re far more interested in where the food comes from, what?s in it and how it gets here?
The wizard from Watford
shaking up McDonald?s
cheery demeanour ? even while describing his brutal clear-out of McDonald?s
executive ranks. ?I inherited a team of
14 in our global leadership team. Within
15 months, 11 of them had moved on,? he
says matter-of-factly.
Easterbrook had worked with some of
the departed executives for 20 years, so
the purge was tough, he admits. However,
it was a necessity. ?We always respected
each other, and they recognised that the
business would be going through a different phase. We?d have to work more
quickly and have a higher appetite for
risk. That doesn?t suit everyone.?
As the lunchtime crowd thins out and a
watery winter sun reflects off the vehicles
in the car park, he recalls that McDonald?s, at that time, had needed to
?sharpen up? fast.
?People?s palates are getting broader
and they?re far more interested in where
the food comes from, what?s in it and
how it gets here,? he says. Customers had
not lost their appetite for fast food but
were defecting to rival chains instead,
which was ?immensely frustrating?,
adds Easterbrook
To tap into the zeitgeist, he added
healthier food and gourmet burgers with
artisan buns. Nowadays the company
uses fresh beef, rather than frozen, in its
American quarter-pounders and ?[we]
source locally wherever possible?.
The corporate restructuring slashed
overheads and removed layers of
bureaucracy, allowing McDonald?s to
launch new products and services more
rapidly, according to Easterbrook. A
home delivery service ? launched with
Uber Eats ? is growing ?phenomenally?.
The McDonald?s boss also wants to
increase the proportion of restaurants
operated by franchise holders from 85%
(at the end of 2016) to 95% in the future.
The shift is aimed at making its cashflows
more predictable. Franchisees typically
Techies
put their
fortunes
out to grass
California?s fledgling marijuana trade
is attracting big names. But could
Washington spoil the party, asks
Danny Fortson in San Francisco
hand over a chunk of their turnover in
service charges and other licensing fees
to McDonald?s. They source patties, buns
and other produce from suppliers. ?We
don?t make any margin on the goods they
buy,? says Easterbrook.
It is this structure that has pitched
McDonald?s into a tax-avoidance row
with the European Commission. In 2015
Brussels opened an official inquiry into
the fast-food giant?s tax affairs in Luxembourg. For the previous seven years, it
had used an offshoot in the Grand Duchy
to collect franchise and royalty fees from
across Europe.
The Luxembourg entity has since been
shut down, with royalties now being
funnelled through its European head-
quarters in north London. At its height,
however, the subsidiary was generating
more than ?1bn in revenue but paying
little corporation tax in Luxembourg.
The commission is investigating
whether this arrangement was a ?sweetheart deal? in breach of its strict rules on
state aid. ?We wait to hear more [from the
commission]. We?ve been transparent
with them and we believe that we have
paid all the taxes we were due to pay,?
says Easterbrook.
Raised as well as born in Watford, he
attended the local grammar school
before reading natural sciences at Durham University. Easterbrook was a gifted
left-arm spin bowler and played in the
university cricket team for two seasons
alongside the future England captain
Nasser Hussain. ?He was a great talent
and good fun to play with.?
After graduating, Easterbrook worked
as an accountant at PwC before joining
the finance department of McDonald?s
in 1993. His rise through the ranks was
rapid; Easterbrook was marked out for a
stellar career early on, spending 18
months studying at ?Hamburger University? ? the company?s training academy
in Illinois. His sister-in-law, Jill Easterbrook, is also a high-flyer. The former
Tesco executive now runs the preppy
fashion label Boden.
By 2006 he was running the British
division, one of the largest in its global
empire. It was at this point that he
THE LIFE OF STEVE EASTERBROOK
Top of Easterbrook?s playlist:
the Jam, led by Paul Weller
As revellers rang in the new
year, an unlucky crew of
workers were stuck in an
office park near Sacramento,
the capital of California. The
new Bureau of Cannabis
Control was swamped.
On January 1, cannabis
became legal in California,
with anyone aged 21 and
older allowed to possess as
much as an ounce and grow
up to six plants at home.
The change set off a rush of
companies ? more than 1,800
applied for licences to sell
marijuana or weed-based
products ? clamouring to join
an experiment that could
have global implications.
The West Coast state is the
world?s sixth-largest economy
? just behind Britain and
ahead of France, according
to official data ? and has
attracted upstarts from
home-delivery apps to
cryptocurrencies designed
to help buy and sell a drug
that the federal government
considers illegal.
Ben Larson, founder of
Gateway Incubator, one of
the first marijuana-focused
investment firms, reckons
California could become the
model that other states and
countries follow. ?The world
VITAL STATISTICS
Born: August 6, 1967
Status: divorced, three
children
School: Watford Grammar
University: Durham; read
natural sciences
First job: stacking shelves
at Marks & Spencer
Pay: $15.4m in 2016
Home: Chicago
Car: Range Rover Sport
Favourite book: The Devil
in the White City, by
Erik Larson
Film: The Shawshank
Redemption
Music: the Jam, Paul Weller
Gadget: Google Home
Charity: Ronald McDonald
House Charities. In Britain,
it provides accommodation
is watching,? he said. ?This is
one of the largest economies
in the world. We could set the
benchmark for how different
jurisdictions treat the
cannabis industry.?
The frenzy was quickly
dampened, however, by the
federal government, which
still views marijuana as a
?schedule 1? drug like heroin
or LSD. Just days after
California opened the
floodgates, the Department
of Justice abruptly rescinded
leniency rules that had kept
the government from
cracking down on states
where the trade had been
legalised.
The department, run by
attorney-general and vocal
marijuana opponent Jeff
Sessions, said the decision
signalled a ?return to the
rule of law?.
The burgeoning industry
was thrown into chaos, but
some entrepreneurs hoping
to build businesses around
the cash crop were unbowed.
In September American
Green, the largest publicly
traded marijuana company,
had paid $5m for an old
oil town called Nipton, in
southern California. The
company plans to turn it into
near hospitals for the
families of sick children
Last holiday: Dubai
WORKING DAY
The chief executive of
McDonald?s rises at 5.30am
or 6am at his home in
central Chicago. He tries to
beat the rush-hour traffic as
he drives to the company?s
headquarters, 20 miles
outside the city.
Steve Easterbrook has 12
senior directors reporting
directly to him, and spends
much of his time talking to
colleagues. However, he
says he?s ?not a big fan of
formal meetings?.
He often goes to the gym
in the evening, then
sometimes takes calls from
colleagues in Asia. He
spends half his time on
the road. One week a
month he visits restaurants
in America, and another
week is spent overseas.
DOWNTIME
Easterbrook is a sports
fanatic and tweets regularly
about Premier League
team Watford.
Since moving to the US
4╜ years ago, he has grown
to ?understand and love?
American football,
basketball and ice hockey.
His favourite American
sport, though, is baseball.
Easterbrook is often to be
seen at the Chicago Cubs.
PATRICK T FALLON
More than 1,800 businesses have applied to sell marijuana
a cannabis-themed resort,
complete with a spa and
vending machines selling pot.
American Green?s Stephen
Shearin, who is helping to
develop Nipton, predicted
that Sessions?s gambit would
fail. ?In any good action
movie, there is a fight at the
end where the bad guy kicks
dirt in the good guy?s eyes.
The good guy struggles
through the dirt in his eyes,
but he always wins,? he said.
?This is Sessions kicking
dirt in the eyes of reality.
Kick on, bro. See how that
works out for you.?
Larson, a long-time tech
investor, launched Gateway
Incubator in 2015, when
marijuana was still restricted
to those with a doctor?s
prescription. Last year
California voters passed
Proposition 64 on
recreational use, paving the
way for the January 1 law
change. Larson did not know
legalisation would come so
swiftly but saw it as ?an
inevitability.? Six other states
launched his unsuccessful campaign to
have the term ?McJob? ? defined as an
?unstimulating low-paid job? ? expunged
from the Oxford English Dictionary. He
also sparred with Eric Schlosser, author
of the bestselling book Fast Food Nation:
What The All-American Meal is Doing to
the World, on the BBC?s Newsnight.
The criticism that McDonald?s frequently exploits low-paid workers still
clearly rankles with Easterbrook. ?I
resent the snobbery about entry-level
jobs. We all had a first job. For the vast
majority of people who work at McDonald?s, it is their first job.
?I worked in some of the warehouses
around here,? he continues, pointing
out the window, ?but my first job was
stacking shelves at M&S. It was character
building and fun.? Last week McDonald?s
British workers secured a pay rise after
staging their first strike.
After reviving the flagging UK businesses and performing a similar feat at
McDonald?s northern European operations, he was posted to the company?s
headquarters in Chicago in 2010 as chief
brand officer. In the following year he
returned to Britain to become the chief
executive of Pizza Express. ?I wanted to
be back in the UK and have a little bit
more consistency in my life,? he says.
In 2012 he jumped ship to the Japanese-themed Wagamama, before returning to McDonald?s in Chicago a year later.
By the start of 2015, he was chief executive of the globe-spanning chain.
Easterbrook is reticent about his brief
spells at Pizza Express and Wagamama,
which were both owned by private
equity investors. He says he liked the
faster pace of working for smaller private
companies.
?It was very different from working in
a large corporate environment. You need
a bit more edge and zip.?
Spoken like a true fast-food man.
have decriminalised the drug
in recent years.
He added: ?Coming from
tech, we knew how to build
companies and we saw a
disconnect between the
expectations and the [lack of ]
professionalism in the
industry. So we said, ?Let?s
build the professionalism
and sophistication needed
for this to work its way into
the mainstream?.?
He is not alone. Peter
Thiel, the billionaire investor
known for prescient bets on
PayPal and Facebook, and for
his support of Donald Trump,
sees the potential. Founders
Fund, his venture capital
firm, last year participated in
a multimillion-dollar funding
round for Privateer Holdings,
which has a number of
cannabis businesses.
However, the stand-off
between the government
and the states means that
companies selling marijuana
and weed-based products
are largely shut out of the
banking system, which is
federally regulated.
Larson said many
companies relied on loan
sharks who offer short-term
loans with usurious rates,
often as high as 50%. ?It?s the
single biggest hurdle,? he
said. ?It affects everything
from core banking to other
financial needs, like small
business loans.?
Many companies rely on
smaller banks with a ?don?t
ask, don?t tell? policy. Such
arrangements rarely last
long, forcing the businesses
to set up back-up accounts
in preparation for the day
their bank shuts them out.
?It?s obviously not an ideal
way to run a business,?
Larson added.
Metal, a start-up that
went through the Gateway
Incubator, recently launched
a cryptocurrency that it
hopes will one day become
a PayPal for weed and
other industries, such as
pornography, deemed ?high
risk? by traditional banks.
?The tech industry has
always navigated into these
waters of questionable
legality,? Larson said.
?Cannabis fits the tech
ethos quite well: caring less
about the establishment
and doing what people feel
is right.?
At the time of writing, the
backlog for cannabis licences
in California stood at more
than 1,200.
7
The Sunday Times January 7, 2018
BUSINESS
He?s a dedicated
retailer of
fashion, aged 91
Starting from a shack, River Island?s Bernard Lewis built a chain of
310 shops ? and he still works five days a week, says Oliver Shah
I
n the old days, Bernard Lewis built
his own stores. His first shop, a
greengrocer?s on a bomb site on
north London?s Holloway Road,
was a ?shack? made from corrugated iron and scrap timber in
1946. River Island, the retail empire
that grew from that seedling, now
has 310 stores worldwide and sales
of almost г1bn. At the age of 91,
Lewis still oversees its property portfolio
? although times have changed.
?Overshadowing
everything,
of
course, is online, which is a totally different ball game,? he said.
In a rare interview at River Island?s
headquarters on an industrial estate on
the outskirts of west London, the fashion
chain?s founder gave seven decades of
perspective on the upheaval sweeping
through the high street.
After Christmas trading updates from
Next and Debenhams embracing cheer
and gloom, Marks & Spencer, the industry bellwether, is expected to reflect the
turmoil by reporting this week a 3.4%
drop in clothing and homeware sales.
?For retailers, it seems to be that a good
year is sideways and a bad year is down a
lot,? said Tony Shiret, an analyst at stockbroker Whitman Howard. ?The continuing pressure on traditional models is
going to force managements and investors to look for more radical solutions.?
Lewis, sprightly and soft-spoken, is
referred to reverentially by staff as ?Mr
Bernard?. He has seen most things in his
lifetime, but the speed of the shift to
internet shopping is ?the big thing?.
?Online?s going up like that,? he said,
drawing a steep curve in the air with a finger, ?and retail?s struggling, and you
think, I?m taking this shop on a 10-year
Still hands on: Bernard Lewis
lease, this is what I?m going to take [in
sales] this year, what am I going to take in
year seven? And in five years, there?s a
rent review ? upwards only. This is your
big problem. So there are a lot of people
going to catch a cold.?
Having said that, Lewis insisted that
River Island, which made pre-tax profits
of г124.5m on sales of г970.5m in 2016,
was ?lucky?. ?We?ve got only 250 shops
in the UK, and every one is a decent
shop,? he said. ?We have no shops that
don?t make money, but I recognise that
online is the exciting thing.?
River Island is one of the great entrepreneurial retail stories. Lewis?s father,
Louis Pokrasse, was the son of a Ukrainian immigrant who rented barrows to
traders at Spitalfields market in east Lon-
APPOINTMENTS
don. His mother, Clara Tauber, was
was the
daughter of Romanian щmigrщss who
moved to Britain when she was two.
Pokrasse, nicknamed Len by a
army
rmy
comrades during the First World W
War,
ar,
changed his name to Leonard Lewis.
wis.
Bernard was born above the family?s
y?s
greengrocer?s in Finsbury Park,
k,
north London, in 1926.
The Lewises moved to Holloway
y
Road, then to Harrow, then Green
n
Lanes in Haringey, where they felll
on ?very hard times ? absolutely
y
desperate? in the 1930s. Bernard
d
and his three brothers slept on matttresses in a single basement room iin
n
a ?tiny little shop? in Old Street until
ntil
they made a ?moonlight flit? to C
Cananning Town. ?We slept umpteen to
to a
room,? Lewis said. ?You slept with
ith a
blanket, a newspaper on top of the
blanket, your coat on top of that
at and
your day clothes at the foot of the b
bed.?
ed.?
Lewis was working as a trainee draftsman in aircraft production when the
he Second World War started, but tried to join
up when he turned 18. ?I could have
ha
ave sat
out the war making airplanes,? h
he
e said,
?but I was mad keen and patriotic,
c, being
Jewish and that sort of thing, against
in
nst the
Nazis, so I volunteered for air crew.?
w.?
He was sent to the Cambridge ccollege
ollege
Corpus Christi for six months to turn
urn him
into a ?gentleman officer?. By the ttime
ime he
emerged, the war was over. So w
was
as his
academic career. ?I got hold of a bottle
ottle of
gin,? Lewis said. ?Got drunk. Missed
sed the
maths exam the next day. So when
n I came
out of the air force, I applied to
o Cambridge to go back and finish engineering.
eering.
They wouldn?t take me back because
cause I
didn?t pass the maths exam.?
During the war, Lewis?s father d
died
ied of
River Island
fashion is
still in
demand
with 310
stores
bronchitis, aged only 48. Lewis opened
on Holloway Road,
his first greengrocer?s
greengro
nearby, and a shop selling
then another ne
Textiles trumped fruit and
knitting wool. Te
veg. ?One you get
ge up at five in the morning and one you don?t,? he said. ?One the
and one it doesn?t.?
stock goes off, an
The family na
name first appeared over a
Street, Hackney, in 1948. A
shop in Mare Str
later, Lewis started making
few years later
clothes, touring high streets for best-sellshop windows and having
ers in rivals? sh
knocked up in the East End.
versions knocke
In 1957, the four
fo Lewis brothers took
London to Glastheir business outside
o
gow and Hull. The
Th mid-1960s were a ?revelation?, when ??London was the capital
and the mini dress transof the world? an
formed fashion. In 1965, Lewis Separates
name to Chelsea Girl.
changed its nam
Leonard, Lew
Lewis?s eldest son from his
first marriage, became his right-hand
mid-1970s and came up with
man in the midthe River Island name in 1988. Leonard
stepped back in 1994 after a riding accident. River Isla
Island is still run and owned
by the family. Bernard is life president.
Clive, the you
younger son from his first
marriage, is chairman. Ben, his
nephew, is cchief executive. Bernard?s
second wife,
wife Vanessa, is involved on
the creative side. The clan is low key,
but connected:
Caroline, Bernard?s
connec
daughter ffrom his first marriage, is
married to Sir Lucian Grainge,
chairman of Universal Music.
The family
interests extend to
fa
asset management,
hotels and
m
property,
propert and their wealth is
estimated
estimat at г2bn. But Bernard
said: ?Rich?
Goodness gracious,
?R
it would
woul never have entered my
head. I think the idea, the pipe
dream,
dream was to be solvent. If you
could ever aspire to have a
prosperous
shop ? let alone
prosp
two ? and you could have a
family and a small car, and a
small
smal home, that was it.?
The
Th patriarch was initially
sceptical
about retailing on
scep
the internet. ?It?s basically a
highly
highl inefficient way of handling merchandise . . . but the
public wants it, and they?re
prepared
to pay for it.?
p pa
pre
Despite
the pressure caused
Des
by the shift to online, Lewis
said it was ?the most exciting time
in retail, probably
ever?. He thought
pro
the solution was the same as it always
has been ? to
t offer ?better merchandise at bette
better prices? than rivals. ?I
won?t retire,? he added. ?Do I ever get
bored? No.?
He still works
five days a week ?
wor
sometimes six when
he needs to visit a
w
property on a Saturday.
But he may be
S
slowing down a little: ?I don?t normally
go in on a Sunda
Sunday now.?
8
The Sunday Times January 7, 2018
BUSINESS
Is this any way
to run a railway?
The transport secretary has
been accused of bailing out the
two companies running the East
Coast main line. The reality is not so
simple, explains John Collingridge
C
hris Grayling avoided commuters? wrath over the biggest
rise in rail fares since 2013 by
escaping to Qatar last week,
but the transport secretary
may find it harder to dodge
the fallout from his decision to
allow Stagecoach and Virgin
to pull out of the East Coast
main line franchise.
When Lord Adonis quit as the government?s infrastructure tsar last month, in
protest at the handling of Brexit negotiations, the Labour peer also used his resignation speech to condemn Grayling for
?bailing out? the two operators.
The row raises questions over the
process by which private companies bid
to run our railways, known as franchising. Some reckon Grayling?s move could
encourage other operators to wriggle out
of unprofitable contracts. With Labour
threatening to renationalise the rail system, the furore could not have come
at a worse time for the government.
What went wrong on the
East Coast line?
Put simply, Virgin Trains and
Stagecoach bid far too aggressively
for the right to run the route linking
Edinburgh and London. They won
the eight-year contract in November 2014 with a pledge to pay the
government г3.3bn for a franchise
till September 2023, and the
option of a one-year extension.
The companies reasoned
that, with a new fleet of Hitachi
electric trains due to start
arriving this year, revenue
growth would continue
unchecked.
Also,
they
expected , unlike the previous state-run operator, to
be able to squeeze costs.
Two earlier private
operators,
including
National Express, had
failed to make the route pay and
handed back the franchise.
Who is to blame?
The assumptions of the winning bidders were ?pure hubris?, according to
one industry expert. The deal relied on
10% growth in revenues every year.
Compounding, however, is a dangerous
mechanism to rely on: if growth falls
short one year, the operator has to run
twice as fast to catch up the next year.
The latest figures show revenues rising
only 3%, against a 10% prediction.
Virgin and Stagecoach, co-founded by
Sir Brian Souter, have blamed a cocktail
of factors for stunting passenger growth.
The East Coast contract has some protection from economic shocks. However, the
line does not have the benefit of a big slug
of season ticket holders ? they account
for about only 5% of passengers.
Brexit has dented consumer confidence and reduced discretionary travel,
while terrorism and industrial action
have discouraged some from travelling. The impact of the oil price
slump on petrol costs has diverted
others from the trains into their
cars, as has soaring fares.
Failings by Network
Rail, the state-owned
company, which maintains the railways,
have been a significant
factor, too. Stagecoach and Virgin?s bid
hinged on a series of
improvements to the
line, such as power
upgrades, expected
to boost profits. But
delays to the work
mean they will not
enjoy
the
full
financial benefit
of the new electric fleet. This is
believed
to
have
given
them a strong legal case for handing back
the contract.
Who are the losers?
Virgin Trains East Coast, as the route is
branded, had been due to pay the government ever-increasing premiums: г276.1m
was due last year and г339.8m this year,
climbing to г584.5m in 2023.
Lord Adonis was right in one sense
when he described the early termination
of the contract last month as a huge bailout: the operators will not have to hand
г2bn of premiums to the taxpayer. However, the two companies will lose out,
too. They had to put up more than
г200m of risk capital ? a cash buffer in
case they did not deliver the promised
premiums ? and are expected to surrender all of it. Virgin founder Sir Richard
Branson said they had lost more than
г100m while running the route. The government will still receive payments from
the route, although they are unlikely to
be at the level Virgin and Stagecoach pay.
The woes on the line have helped to
more than halve Stagecoach?s share
price, which topped 400p in November
2014. Despite a 15% boost after the government announcement that the contract was to be renegotiated, the
shares closed last week at 166.9p,
valuing the transport group at
г955m.
An industry insider said it
would be ?illegal? to force
Stagecoach and Virgin
to continue to run the
contract ? and pay
the premiums ?
once the risk capital had been
exhausted.
Enforcing the
full terms of the deal could have pushed
Stagecoach into insolvency, according to
several sources. That would have discouraged other companies from bidding
for franchises, which would reduce competition and payments to the exchequer.
Will other operators try to hand
back the keys?
A number of franchises ? also won on
racy terms ? look increasingly vulnerable. Passenger growth is slowing, amid
weaker consumer confidence and changing work patterns, undermining the
operators? bold bid assumptions.
FirstGroup won the TransPennine
route, linking Hull and Liverpool, in
December 2015. While the line had previously received subsidies from the state,
First promised to pay г303m of premiums over the seven-year franchise, based
on revenues increasing by 12% a year.
First had to back up its bid with г204m of
risk capital ? about one-sixth of the company?s г1.3bn market value.
The Dutch operator Abellio won the
Greater Anglia franchise in summer 2016,
shortly after the Brexit vote. It offered to
pay the government г3.7bn to run the
line for nine years ? reportedly г600m
more than the next bidder. Its risk capital
has never been disclosed, but is believed
to be more than г200m.
The bid was based on double-digit
annual revenue growth. James Burles,
head of Abellio Greater Anglia, described
the г3.7bn price tag as ?scary?. Handing
back the keys would be expensive, however, as operators would have to burn
through their buffers first.
What happens next on the East Coast?
Grayling said a new public-private partnership, uniting the track and trains, will
run from 2020. While similar experiments have a patchy record, Grayling
reckons this will improve efficiency and
help Network Rail to perform better on
upgrades and maintenance.
Grayling said Virgin Trains East Coast
may continue on the line until 2020,
though probably not on the existing
terms ? the operators may be given a
short-term
management
contract
instead. Retaining them as a profit-making contractor would provoke further
criticism for the government, however.
What will this mean for taxpayers
and travellers?
Concern that companies are reluctant to
compete for franchises has forced the
government to change the rules. There
were just two bids for the South Western
franchise last year.
Experts say that dwindling competition and weaker consumer confidence
are likely to reduce premiums received
by the exchequer. For the past seven
years, train companies have paid more
in premiums than they have received in
subsidies.
The new franchising rules could leave
the taxpayer on the hook, as they contain a promise to pay the companies if
revenues significantly undershoot the
forecasts. In exchange for any subsidies,
Whitehall mandarins will insist on
close financial monitoring. The net
result is that the railways are
likely to generate less profit
for the state. This burden
will fall on the taxpayer
or passengers ? perhaps both ? in the
form of bigger
subsidies
or
higher ticket
prices.
Accused: Chris
Grayling, left. An
artist?s impression
of the new Hitachi
intercity express
train which is due to
begin running on the
East Coast mainline
later this year
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9
The Sunday Times January 7, 2018
ENTERPRISE
How to make sure you are
pitching to the right person
Luke Johnson Animal Spirits
I
t would be easy to pick winning
entrepreneurs if CVs were all that
mattered, but as every venture
capitalist knows, it ain?t that simple.
Qualifications do not necessarily
highlight innate cunning. Of course
persistence, optimism, confidence,
ambition, industry and intelligence
all count ? but they are still not all.
Experience can help identify the natural
money makers. One of the other vital
skills I look for in any founder is whether
they can sense where power lies.
This is a very valuable talent. If you
attend an interview and are confronted
by a panel of interrogators, do you know
who the real decision maker is? If you
pitch a business idea to a group of
investors, can you tell who the most
influential person in the room is? If you
try to sell a product to a buyer, can you
sense if they really have the authority to
place an order? Savvy entrepreneurs
smell a room and work out where the
power is centred. Be it in a meeting or a
reception, they patrol the territory and
understand the dynamics. Often the
power rests not with the loudest
individual, nor necessarily the oldest.
What are the giveaways that alert the
wily business person? Speech, body
language, confidence, detail ? which all
add up to an intuitive feel for the most
important individual in the gathering.
Because a genuinely powerful person
feels less need to show off, or make their
presence felt, they are frequently low
key and thoughtful, rather than noisy.
Making a fuss in order to impress is
typically the sign of someone who is
insecure ? weakness not strength.
So the rule is often to ignore the loud,
bossy character across the table and
direct your attention towards the
thoughtful one with whom the final
decision probably rests.
When analysing a business, it is
important to understand who has the
power in its main trading relationships.
Is it their clients? For advertising
agencies, that would normally be the
case.
Is it their customers? With the
grocers, typically they hold the whip
hand over the food producers.
Is it their suppliers? Certain retailers
are beholden to key brand owners.
Could it be unions who command the
upper hand? That seems to be the case
for the train operating companies ?
forever being blackmailed by their staff.
In other sectors, regulators play a
dominant role: financial services, for
example, suffers from more supervision
than almost any industry I know, so
keeping regulators happy is a huge
preoccupation for every banker,
investment manager, insurance
underwriter and suchlike.
It is a principal reason why large firms
dominate these sectors ? the costs of
compliance are so onerous, only big
business can afford them. Anyone who
wants to succeed in financial services
needs to know how to deal with
regulators, and be willing to spend
plenty of their time doing it.
One of the great ironies of official
behaviour towards banks is that the
government wants to create more
competition, to better serve the public
and offer more choice. Yet their onerous
and unproductive regulatory regime has
enormously increased barriers to entry
for new banks. It is a classic case of how
state interventions in markets often have
unintended and adverse consequences.
Unfortunately, we live in the age of
virtue signalling, where politicians and
bureaucrats frequently favour form over
substance, preferring to look good in the
media rather than actually providing
people with genuine help.
The left promotes the theory that
business is all powerful. This is mostly
hogwash. Companies do not make or
apply the law; most face fierce
competition and struggle to deliver
attractive returns. Usually, customers
and staff have choices about where to
shop and work. Innovation frequently
produces poor profits for the pioneers.
However, in some sectors, regulations
actually help special interests and
entrench power.
The Captured Economy, a new book
by Brink Lindsey and Steven Teles,
describes how the property sector,
overprotection of copyrights and
patents, favouritism towards incumbent
businesses through occupational
licensing and financial services have all
benefited from the current legal system.
The book is written from a US angle, but
much of it applies equally well to Britain:
big business is helped by the state, while
start-ups and entrepreneurs are
disadvantaged.
Sadly, politicians and regulators feel
more comfortable dealing with big
business, because they are all essentially
bureaucrats. By contrast, entrepreneurs
are likely to appear somewhat alien: not
institutional creatures, but rather
dependent for their livelihoods on their
wits. Shame that the civil servants do not
talk more to the self-made.
Luke Johnson is chairman of Risk Capital
Partners and the Institute of Cancer
Research. luke@riskcapitalpartners.co.uk
@LukeJohnsonRCP
Protein powder
built my brawn
supremacy
PAUL HACKETT
HOW I MADE IT
ZEF EISENBERG
FOUNDER OF
MAXIMUSCLE
In the bag:
Jacqui Ma ran
her cycling kit
venture while
working in
market research
Don?t give up the day job,
it can help your start-up
Working 9-5 still leaves the hours for a side venture . . . and the money is useful, says Liam Kelly
J
acqui Ma used to feel like an outcast at networking events. Unlike
other entrepreneurs, she held
down a 9-5 job while trying to get
her cycling bag business off the
ground. ?I heard that if you?re
not staying up until three or four
in the morning, you?re not a real
entrepreneur,? she said. ?That?s
bullshit.?
She might have a point. A rising number of start-up founders are running a
?side hustle? ? a business they operate
while working full time. Ma, 41, continued to work at market researcher WGSN
for four years after founding her business, Goodordering, in east London.
In the next two years, one in five people is planning to launch a company
while still an employee, according to
research by GoDaddy, the web hosting
service. Data from the Global Entrepreneurship Monitor suggests nearly 45% of
early-stage entrepreneurs also have a job.
The approach is less risky than giving
up work to start a business full time, as it
guarantees a source of income. For Ma,
TEACH YOURSELF TO . . .
STOP BURNING
THROUGH CASH
Cash burn can become
addictive for start-ups. Too
many blow up because they
spend the money they have
raised before they have built
a viable business. New
companies chasing rapid
growth can burn through
г100,000 or more a month.
That may propel founders
into a cycle of fundraising,
which reduces the time they
can spend running their
company. The problem has
been worse in recent years,
staying in employment made Goodordering possible. ?I used my salary to get samples made and was able to be a bit more
experimental,? she said. ?If I didn?t have
the job I would have just launched one
product instead of five.?
Those juggling a job and a new business say they need to work 60 or 70 hours
a week to make both work. Sacrifices
often have to be made.
Aaron Henriques, 31, bought into
Maid2Clean, a cleaning franchise, in 2013
after the terms of his Metropolitan police
pension were changed.
?I was working more hours than there
were in the day,? he said. His police job
already meant he had to miss big social
occasions. The added burden of a side
project led to extra sacrifices. ?I had to
give up my limited free time. It was tough
and exhausting.?
Putting in the hours can pay off. Henriques now has 60 cleaners on his books in
London and Cardiff. He took a sabbatical
from the Met last summer to start Handlr,
a call-handling service for small businesses. Six weeks ago, he left the force to
with so much capital looking
for a home.
Some investors
emphasise the importance
of capital efficiency. ?Startups can be lean and still be
ambitious,? said Stan
Laurent, a partner at
Highland Europe. ?We care
about capital efficiency
because it?s often a proxy for
the strength of the
underlying business.?
Laurent said focusing on
self-funded growth early on
? however difficult that may
be ? almost always pays off.
External investments should
fund better customer
economics ? getting higher
returns from those willing to
run his own businesses full time after a
decade as an officer ? ?the best thing I
ever did?, he said.
There are downsides to juggling jobs.
Ventures take longer to grow and become
profitable, and angel investors are not
known to be impressed by founders who
may be prone to distractions.
Many side hustlers start from trying to
monetise their hobby or scratch a creative itch rather than pursuing a get-richquick scheme. Rebecca Yates, 26, works
in a policy advisory job but yearns to be
an artist. In her spare time she paints
abstract pieces to sell on Etsy, the online
handicrafts marketplace. Her lifelong
hobby has, she said, ?got a bit out of
hand?. She is about to launch a range of
greetings cards and notebooks, hoping it
will allow her to make a living as an artist.
However, budding entrepreneurs are
coming to realise that they don?t have to
give up the day job. ?Starting a business
while holding down a day job is becoming
a national pastime,? said Emma Jones,
founder of the small business network
Enterprise Nation. ?I?ve witnessed an
buy what you are selling.
Attempting to ?buy growth?
through marketing plays into
the hands of tech giants,
Laurent added.
?The only beneficiaries
will be Google, Facebook
and a few other advertising
platforms. That or a bloated
sales team.?
Nearly 330,000
businesses ceased trading in
2016, according to the Office
for National Statistics. Many
of them ran out of cash.
Being more efficient cuts the
risk of failure ? and means
founders do not dilute their
holdings through multiple
rounds of fundraising.
Peter Evans
ANGEL Q&A
NIC BRISBOURNE
Every week we talk to a
business angel, one of the
early-stage investors who
collectively inject г1.5bn a
year into British start-up
companies
I used
my
salary
to
get
samples
made
explosion in the number of people who
start like this.?
Some learn to thrive on the lack of
sleep. Ada Okpe, 30, co-founded Trove,
which provides snacks and toiletries to
Airbnb hosts, and works on it alongside
his job in project management at the Post
Office. He is so used to long hours he
would ?feel idle if I wasn?t doing something else?.
Taking the plunge into business fulltime does not suit everybody. Ma spent
the second half of 2016 focused solely on
Goodordering but said that time had
been ?so boring, so unsatisfying?
because the lack of funds meant she
could not employ anybody else. Okpe
understands why founders commit fully
to their own ventures, but he ?gets fresh
ideas from a different environment? by
having another job ? and enjoys playing
on the work?s football team.
Jones believes the number of side hustlers will only grow. ?As wages continue
to stagnate and employment becomes
less fulfilling, we will see more people,
not fewer, working this way in future.?
Zef Eisenberg was working
as a fitness instructor in
1995 when he started selling
protein powder to his
muscly friends. He called his
fledgling business
Maximuscle.
Using г3,000 of savings,
Eisenberg targeted ?hardcore
bodybuilders? who wanted
the right nutrition to help
them bulk up. ?I didn?t get
into it for money,? the 44year-old said. ?The brand was
created originally for me and
the people I knew. The fact
that everyone else wanted to
take it was a bonus.?
It proved a highly lucrative
bonus. With the business
booming, he sold a majority
stake to a private equity
investor for г75m in 2007. At
the time it was making a
profit of г4.5m on revenues
of г21m. There was more to
come: pharmaceuticals giant
Glaxo Smith Kline paid г162m
for Maximuscle eight years
ago, netting another big
windfall for the founder.
It was not a bad return for
a man who left school at 15.
Eisenberg grew up in
Finchley, north London, and
went to University College
School. He left after taking his
GCSEs. His mother, a special
needs teacher, and father,
who ran a carpet company,
divorced when he was seven.
?It left me to my own devices.
There was no safety net.?
Safety has not always been
Eisenberg?s priority. He holds
a world land speed record for
turbine motorbikes, with a
top speed of 234mph. He
crashed while racing at an
event in North Yorkshire two
years ago, breaking 11 bones.
He made a full recovery and
returned to racing last year.
He has made a habit of
bouncing back from
adversity. When protein
powders and other sports
supplements first hit the
market in the mid-1990s, they
were treated with suspicion.
Some athletes linked them to
failed drugs tests and pointed
the finger directly at
Maximuscle.
Eisenberg ? a trained
nutritionist ? claimed every
batch of the product he sold
Nic Brisbourne, 44, is
managing partner of
Forward Partners. Through
the early-stage venture
capital firm, he has backed
businesses such as shop
rental platform Appear Here
and suit maker the Drop.
Brisbourne started
Forward five years and
previously worked as a
Silicon Valley investor. Last
year he raised a new г60m
fund to back artificial
intelligence and ecommerce
start-ups. It invests up to
г350,000.
of early-stage investors will
say that it?s all about the
founder, but I look for both.
Success is really driven by a
great product.
up to г350,000]. The market
is just not set up to funnel
lots of opportunities to us.
We see about 3,000 pitches
a year and invest in 12.
Warning bells ring . . .
When people can?t articulate
who the customers are and
why they will buy the
product. It?s amazing how
many just want to gloss over
these details. I want to know
who is going to be buying.
Sometimes, just having to
ask that question means
we?re unlikely to invest.
Follow the money
Once you know a company
well and trust it, that?s when
you follow on with further
investment. Because we run
a fund we can aggressively
follow on with more
investment. It happens in
well over half the companies
we back.
What I look for
You need a good product as
well as a great founder. A lot
Wish I saw more . . .
Good opportunities at the
pre-seed stage [investments
Wish I saw fewer . . .
People who build
companies without a deep
understanding of what their
was tested, and he
guaranteed that no athlete
using the supplements would
ever fail a drugs test. His
promise worked and the
rugby clubs Wasps and
Harlequins, as well as Fulham
football club, signed up. It
was a watershed moment.
?We used to be seen as a
magic pill for weedy kids who
wanted to get bigger, but
when you see the top rugby
and football clubs in the
country using it, it?s a great
endorsement.?
Eisenberg remained an
adviser to GSK on
Maximuscle for four years
after the deal.
Within such an enormous
company, he found it difficult
to talk to the right people
about building the brand. ?It
ended up being a massive
frustration,? he said. ?There
were too many bean
counters.? Glaxo is now
planning to sell Maximuscle
and is likely to take a
signigicant write-down on the
value of the business.
These days, Eisenberg
concentrates full time on
Maxicorp, his property
investment firm. The
business has acquired, alone
or as a joint venture, more
than 12 projects worth г210m,
mainly in London and the
Channel Islands. Eisenberg
lives in Guernsey and is
divorced. He has two
children, a boy and a girl.
His advice to
entrepreneurs is: ?Have an
obsession to do things really
well and conduct yourself
ethically. The money will
follow.?
Peter Evans
Biker: Zef Eisenberg holds
a land speed record
customers want to buy. It
goes beyond saying, ?If I
build an amazing widget,
would you buy it??, because
that produces a lot of false
positives.
Next disrupted industry
Construction. It?s on the
cusp of change and we?re
seeing the first start-ups
selling into the construction
industry. There?s a lot of
work being done around
drones at the moment. The
next stage will see
construction companies
developing their own
innovative technology,
rather than buying it in.
Peter Evans
10
The Sunday Times January 7, 2018
BUSINESS
BUSINESS BESTSELLERS OF 2017
Chimp Paradox
Elon Musk
Black Box Thinking
And the Weak Suffer
Talking to My Daughter
Peters
Ashlee Vance
Matthew Syed
What They Must?
About the Economy
1 TheSteve
2
3
4
5
(70,718 copies)
(26,128)
(42,619)
Yanis Varoufakis (35,653)
Yanis Varoufakis (31,177)
LETTERS
SIGNALS
AND NOISE . . .
Succeed by ensuring the
human side of your mind
wins over the chimp side
If we all had a block box like a
plane, we?d find out how we
failed and learn to succeed
Greek ex-finance minister on
Europe?s monetary crisis in
a case against austerity
Varoufakis sets out to answer
his daughter?s question: why
is there so much inequality?
Authorised biography of the
entrepreneur behind electric
cars and a mission to Mars
of Titans
6 Tools
Timothy Ferriss
(23,983)
My Virginity
7 Finding
Sir Richard Branson
(21,821)
Finder 2.0
8 Strengths
Tom Rath
(21,709)
In
9 Lean
Sheryl Sandberg
(21,683)
With Why
10 Start
Simon Sinek
(21,566)
Stripping a continent
bare: Stephen Robinson
reviews Dictatorland, a
study of Africa and its
often greedy and
rapacious post-colonial
rulers
CULTURE, PAGE 36
TWITTER POLL
Good year
Bad year
33% 67%
Perfect if you want to know
?the tactics, routines and
habits? of top people
Two decades after Losing My
Virginity, Branson produces
a memoir of business and life
Focus on your top five
talents after an online Gallup
test (access code supplied)
Subtitled Women, Work and
the Will to Lead, Sandberg?s
take on empowerment
After Debenhams issued
a stark profit warning,
will 2018 be a good year
or a bad year for the
high street?
@ST_Business
What makes you more
innovative, influential and
profitable than other people
Bestseller List prepared by Nielsen using data supplied by and copyright to Nielsen BookScan, taken from the Total Consumer Market, Jan 1 to Dec 30, 2017
DATABANK
Upbeat
America
keeps BBA
in clouds
bought an American rival,
Landmark, for about $2bn.
The deal, funded through
debt and a 133p-a-share rights
issue, looked risky at the
time but has proved its worth.
The shares have risen by a
fifth over a year to 344.2p,
valuing BBA at г3.6bn.
The company is not
immune from economic
turbulence ? the financial
crisis sent its shares plunging
? but it is currently throwing
off more cash than it knows
what to do with, $224m
(г165m) in 2016. Debt had
dropped 13% to $1.3bn by last
June, but BBA can sustain
much more than this.
It could do more deals, or a
share buyback, but a big cash
return is more likely. Analysts
reckon this could be a special
dividend or increased regular
payouts, and is likely to be
announced in the next couple
Business jets are a handy
economic barometer in the
United States. When times
are good, executives and
small business owners switch
from the front of the
commercial jet to the
company plane.
America?s economic
resurgence is good news for
BBA Aviation, the FTSE 250
repairer of business jets and
turboprop planes. It is a
predominantly American
company, with the bulk of its
220 sites there, and it makes
about 90% of its money
Stateside.
The company, chaired by
former Boots and Invensys
chairman Sir Nigel Rudd, was
once a small Scottish
manufacturer of industrial
belting, but has been focused
on aircraft for the past dozen
years.
It has timed its recent
growth well. Two years ago it
BBA Aviation
350p
300
250
J FMAM J J A SOND
Source: Thomson Reuters
of months. With a new chief
executive in place, BBA has
all the ingredients for growth.
Buy.
PS When I urged readers to
avoid Debenhams last
summer, the warning lights
were flashing for all to see:
short-sellers, leases
stretching for decades and a
rapidly cooling high street.
Last week?s profit warning
drove the shares 32% below
the 28.9p they stood at when
I raised the alarm last year.
Anyone who followed my
advice to shun stocks
including the doorstep lender
Provident Financial and
retailer AO World will be
feeling similarly smug.
Smart Metering Systems
and chemicals maker Croda
International were among my
buy tips that did well. Croda
is up 25% at г44.79 and Smart
Metering Systems is almost
50% higher at 845p.
There were some clangers.
My advice to avoid Just Eat
went down like a dodgy
takeaway; the shares have
risen 40% since then, hauling
it into the FTSE 100. Tipping
car sales website Auto Trader
was a mistake too; the shares
are off 17%.
@jcollingridgeST
FTSE 100
7,724.22
20,932.56
36.45
0.47%
H:7,727.7
L:7,093.6
FTSE 250
206.30
1.00%
H:20,932.6
L:18,040.5
DOW JONES
25,295.87
576.65
2.33%
H:25,299.8
L:19,677.9
NASDAQ
7,136.56
233.17
3.38%
H:7,137.1
L:5,464.4
S&P 500
2,743.15
H:2,743.5
L:2,254.3
69.54
2.60%
NIKKEI
23,714.53
949.59
4.17%
H:23,730.5
L:18,224.7
Luke Johnson?s panegyric on
the John Lewis legacy
sounded like the strongest
recommendation to vote
Labour that I have heard in a
long time.
Bob Burns, Chorley,
Lancashire
Employee owners aren?t
just in John Lewis
I was delighted to see Luke
Johnson highlight the
employee ownership
business model and talk so
positively about its ethics and
the opportunity to plan in a
long-term and sustainable
manner (?John Lewis legacy
ensures everyone is being
served?, last week).
I think, however, that he
understates just how
widespread the model is now.
At Parfetts we started our
transition to it in 2008 and
became 100% employee
owned in 2015. When we
joined the Employee
Ownership Association, there
were 70 members; this
excellent organisation now
has more than 300
businesses signed up.
We calculate that this
sector of the UK economy
now turns over about г30bn
and employs more than
300,000 people. The model
is most prevalent in
professional services, highvalue manufacturing, health
and social care, and retail and
distribution ? in fact, in most
businesses where it is people
and the services they deliver
that make the difference.
The model is not right for
every business, but for those
We?re entering an age
of inequality
Merely getting past an
arbitrary age threshold is
hardly a valid reason for
anyone to have their total
taxes on income, whether
earned or unearned, reduced
by 12% at the expense of
younger taxpayers (?Don?t
punish pensioners?, Business
Letters, last week).
Many over-65s are already
more affluent than workingage taxpayers and enjoy
benefits, from free bus passes
and prescriptions to definedbenefit pensions, that are
unlikely to be sustainable for
future generations.
At the same time, the
government is easing off
austerity and continuing to
increase the burden of debt
that will eventually fall on
future generations.
The welfare state long ago
ceased to be contributionsbased and there is no longer
any justification for keeping
income tax and national
insurance distinct.
Martin Bennett, Kempsey,
Worcestershire
THE ECONOMY
THE WEEK IN THE MARKETS
INSIDE THE CITY JOHN COLLINGRIDGE
where it is, in both the private
and public sectors, it has
proved extremely successful.
Steve Parfett, chairman,
AG Parfett & Sons, Stockport
Send your letters, including
full name and address,
to: The Sunday Times,
1 London Bridge Street,
London SE1 9GF. Or email:
letters@sunday-times.co.uk
Letters may be edited
DOLLAR
USD > GBP
FTSE 100
$1.36
7,800
7,600
Consumer prices index
current rate
CPI including housing
U 0.01
12-month high: $1.37
low: $1.20
7,400
EURO
EUR > GBP
7,200
7,000
J
F
M
A M
J
J
A
S
O N
D
Source: Thomson Reuters
RISERS
EnQuest: 37p, U 29.1% on rising oil
price Countrywide: 134p, U 16.3% on
digital innovation Oxford Biomedica:
10.7p, U 11.3% on sentiment
Premier Oil: 85.6p, U 11.3% on oil
price IG Group: 792.5p, U 9.3% on
spread-betting boost
HANG SENG
30,814.64
895.49
2.99%
H:30,911.0
L:22,230.3
FALLERS
Debenhams: 28.9p, V 16.8% on profit
warning Chemring: 170.2p,
V 8.4% on sentiment Carpetright:
162.5p,V 6.9% on consumer confidence
Hochschild Mining: 248.9p, V 5.1% on
broker valuation Admiral: г18.72,
V 4.3% on broker downgrade
FTSE EUROFIRST
1,562.13
32.56
2.13%
H:1,564.8
L:1,420.8
SHANGHAI
3,391.75
SENSEX
34,153.85
CAC 40
5,470.75
ALL ORDS
6,229.70
84.58
2.56%
158.19
2.98%
H:3,450.5
L:3,016.5
H:5,536.4
L:4,733.8
DAX
13,319.64
402.00 H:13,525.6
3.11%
L:11,425.1
97.02
0.28%
S&P TSX
16,349.44
140.31
0.87%
U 0.01
12-month high: ?1.20
H:34,188.9
L:26,701.2
Average weekly earnings
е113.08
г510
OIL
DOLLARS/BARREL
$67.62
U 1.00
12-month high: $68.27
low: $44.35
$1,319.36
U 15.90
1.43m
Manufacturing output
H:16,421.4
L:14,915.8
$17,389.20
U 4,952
12-month high: $18,905.20
low: $777.76
Price at 5pm Saturday
2.8%
2.8%
current rate
prev. month
3.9%
4.0%
Retail sales
0.2%
U
prev. month
4.3%
4.3%
on the year
on last month
3.9%
U
on the year
U
UK trade
balance (гbn)
Gross domestic
product
Budget deficit
(PSNB) in гbn
2.4%
current rate
U
0.1%
on last month
1.6%
U
1.1%
latest 3 mths
prev. 3 mths
latest 12 mths
-5.0
-8.2
-31.8
latest quarter prev. quarter
U
0.4%
U
0.3%
annual change
U
1.5%
latest month
prev. month
year to date
8.7
7.8
48.1
10-YEAR BOND YIELDS %
variation
12-month high: $1,347.38
low: $1,174.35
BITCOIN
DOLLARS
prev. month
U
U 0.41
12-month high: е117.52
low: е107.31
3.0%
current rate
on prev. month on last year
Unemployment
low: ?1.07
YEN
YEN > USD
GOLD
DOLLARS/TROY OZ
H:6,232.1
L:5,635.1
62.40
1.01%
?1.13
Retail prices index
prev. month
3.1%
1.25
UK
12 months
high
low
U 0.05
1.53
0.72
US
2.47
U 0.07
2.63
2.02
JAPAN
0.06
U 0.01
0.16
-0.01
GERMANY
0.44
U 0.01
0.59
-0.27
TOP 200 COMPANIES
Rank by Market cap
50
181
92
185
166
28
48
155
47
27
8
128
29
121
30
187
18
73
125
162
104
86
19
110
111
3
5
67
183
23
147
68
60
165
157
45
199
59
179
144
55
25
116
26
80
153
72
195
130
6
97
3i Group
3i Infrastructure
Admiral
Aggreko
Alliance
Anglo American
Antofagasta
Ashmore
Ashtead
Associated British Foods
Astra Zeneca
Auto Trader
Aviva
Babcock International
BAE Systems
Balfour Beatty
Barclays
Barratt Developments
BBA Aviation
Beazley
Bellway
Berkeley
BHP Billiton
B&M European
Booker
BP
British American Tobacco
British Land
Britvic
BT
BTG
Bunzl
Burberry
Capital & Counties Properties
Capita
Carnival
Centamin
Centrica
Close Brothers
Cobham
Coca Cola HBC
Compass
Convatec
CRH
Croda
CYBG
DCC
Dechra Pharmaceuticals
Derwent London
Diageo
Direct Line Insurance
Price Change
on week
943.8
213.5
1872.0
814.6
761.0
1603.4
981.8
407.0
2015.0
2882.0
5204.0
356.4
506.6
715.4
572.0
296.0
199.2
657.8
344.2
521.5
3686.0
4225.0
1561.6
413.0
230.9
529.6
4970.0
674.8
798.0
271.0
756.5
2063.0
1782.5
312.6
423.4
4852.0
156.6
146.1
1459.0
123.2
2383.0
1568.0
200.0
2762.0
4479.0
326.4
7550.0
2040.0
3069.0
2672.0
369.8
+30.3
+5.5
?130.0
+15.6
+14.5
+53.9
?23.2
+1.9
+23.0
+62.0
+83.0
+3.6
+0.1
+9.9
?1.0
?1.0
?3.9
+10.3
?5.5
?13.0
+123.0
+28.0
+39.1
?10.6
+1.9
+6.9
?48.0
?16.7
?17.0
?0.7
?6.0
?9.0
?9.5
?7.1
+22.5
?40.0
?1.8
+8.9
+11.0
?3.0
?37.0
?32.0
?5.5
+105.0
+55.0
?13.3
+85.0
?56.0
?49.0
?53.0
?11.9
52-week
Yield
high
low
969.5
213.5
2178.0
1064.0
761.0
1605.0
1061.0
407.0
2060.0
3371.0
5508.0
435.9
544.0
969.5
677.0
298.4
239.2
700.0
352.1
534.5
3792.0
4235.0
1562.2
423.6
230.9
530.0
5643.0
691.5
820.0
396.9
779.0
2465.0
1985.0
324.8
705.5
5380.0
190.5
235.8
1715.0
165.0
2671.0
1757.6
344.0
2920.0
4479.0
340.3
7550.0
2249.0
3118.0
2725.0
411.3
687.5
186.5
1732.0
758.0
645.0
959.4
694.0
280.6
1542.0
2361.0
4194.0
319.0
470.6
654.5
535.5
253.5
178.9
471.1
279.5
382.0
2457.0
2787.0
1117.0
293.4
177.8
439.8
4565.0
579.0
578.0
243.8
534.5
2016.0
1473.0
253.1
392.9
4105.0
131.8
137.3
1316.0
110.7
1779.0
1447.7
182.0
2530.0
3248.0
260.0
6045.0
1356.0
2451.0
2131.5
333.8
P/E
Mkt Cap
(гm)
2.8
- 9131.4
3.7
- 2201.4
2.8 23.4 5331.1
3.3 17.3 2086.4
1.8
- 2641.3
- 16.1 22521.4
1.4 39.0 9679.2
4.1 17.2 2879.0
1.4 18.3 10059.4
1.3 19.0 22816.1
4.0 25.0 65869.5
1.5 21.4 3466.9
4.2 33.5 20492.3
3.9 11.2 3617.0
3.7 17.2 18212.4
0.9 89.7 2041.6
1.5 16.7 33930.8
2.8 11.7 6624.0
2.8 23.7 3551.3
2.0 14.2 2741.6
3.0 10.0 4526.3
3.2 7.7 5721.3
2.7 18.4 32981.0
1.4 27.0 4130.0
2.0 26.9 4116.1
5.6 36.2 104792.1
3.1 19.9 92663.2
4.4 11.6 6949.2
3.1 18.9 2104.0
5.3 16.8 26993.1
- 39.8 2918.1
2.0 24.0 6931.6
2.2 25.4 7814.1
0.5 107.8 2650.1
7.5 542.8 2825.3
2.4 17.0 10353.6
7.7 24.0 1803.6
8.2 14.6 8027.8
4.0 11.4 2213.4
1.4
- 2946.9
1.6 25.1 8682.2
2.1 22.0 25787.2
- 3902.9
2.0 19.8 23098.2
1.6 30.5 6052.2
- 19.0 2887.4
1.5 33.3 6725.0
0.9 137.7 1900.8
1.7 32.1 3420.4
2.3 24.8 67266.1
4.0 15.9 5084.8
Rank by Market cap
174
81
159
93
36
38
124
46
105
88
7
10
194
178
149
100
106
56
188
164
154
163
112
168
146
1
150
119
21
133
148
82
177
52
132
57
37
182
131
123
70
173
139
129
78
152
91
115
63
122
61
34
Dixons Carphone
EasyJet
Electrocomponents
Evraz
Experian
Ferguson
Foreign & Colonial
Fresnillo
G4S
GKN
Glaxo Smith Kline
Glencore
Grafton Group Units
Great Portland Estates
GVC Holdings
Halma
Hammerson
Hargreaves Lansdown
Hastings
Hays
HICL Infrastructure
Hikma Pharmaceuticals
Hiscox
Homeserve
Howden Joinery
HSBC
IG Group
IMI
Imperial Brands
Inchcape
Indivior
Informa
Inmarsat
Intercontinental Hotels
Intermediate Capital
Intertek
International Airlines Group
International Public Partnerships
Intu Properties
Investec
ITV
IWG
Jardine Lloyd Thompson
JD Sports
Johnson Matthey
Jupiter Fund Management
Just Eat
Kaz Minerals
Kingfisher
Ladbrokes Coral
Land Securities
Legal & General
Price Change
on week
203.0
1511.5
635.6
371.2
1649.0
5430.0
657.0
1394.5
275.2
326.3
1361.0
388.6
805.0
684.5
968.5
1290.0
536.0
1824.0
310.2
185.5
163.1
1129.0
1407.0
803.0
467.1
763.5
792.5
1396.0
3170.0
785.0
404.6
722.0
492.4
4691.0
1178.0
5318.0
664.0
158.8
249.7
538.8
170.9
261.0
1404.0
352.0
3199.0
631.4
811.0
887.0
339.6
188.0
985.6
271.7
+4.0
+47.5
+9.1
+31.2
+13.0
+100.0
+10.0
?34.5
+8.2
+6.9
+38.5
?1.4
+3.0
?4.0
+43.5
+30.0
?11.0
+22.0
?9.8
+2.6
+4.9
?5.0
?57.0
?6.5
+0.3
?3.4
+75.0
+63.0
+4.0
+2.5
?3.6
nc
+1.6
?28.0
+32.0
+128.0
+13.0
+2.1
?3.3
+3.8
+5.4
+3.6
+13.0
+15.8
+124.0
+2.9
+30.0
?7.5
+1.9
+6.1
?22.4
?1.6
52-week
Yield
high
low
357.0
1531.5
709.0
371.2
1705.0
5480.0
657.0
1725.0
341.1
376.5
1722.0
394.2
841.0
739.0
982.0
1322.0
609.5
1824.0
325.0
194.4
174.6
2297.0
1470.0
867.0
475.7
769.6
792.5
1396.0
3933.5
880.5
419.5
761.0
850.5
4719.0
1178.0
5425.0
670.0
166.6
294.0
627.5
219.6
365.2
1404.0
456.0
3503.0
631.4
824.0
894.5
368.1
188.0
1008.0
276.0
149.1
914.5
471.1
173.2
1446.0
4460.0
542.0
1260.0
240.7
294.3
1275.5
276.6
540.5
587.5
594.0
909.5
501.5
1266.0
220.4
147.2
153.3
949.5
997.5
523.0
373.0
620.8
491.9
1065.0
3027.0
704.0
267.6
629.5
443.3
3668.0
684.0
3392.0
466.6
150.3
194.7
461.4
146.9
190.9
995.5
303.3
2727.0
393.4
496.0
374.7
288.0
111.3
64.1
232.8
3.6
1.9
1.9
1.9
1.6
1.7
3.4
2.7
5.9
0.7
1.7
1.5
1.1
4.5
1.3
3.2
1.6
4.9
2.0
2.0
1.9
2.2
4.9
4.0
2.8
5.0
3.0
2.4
2.7
8.7
1.7
2.2
1.2
3.0
4.1
5.6
4.3
3.8
2.0
2.3
0.4
2.3
2.3
3.1
1.6
4.3
5.3
P/E
Mkt Cap
(гm)
9.6 2341.2
19.7 6003.8
26.5 2806.5
- 5315.8
26.8 15218.8
15.5 13742.2
- 3556.7
23.5 10276.0
15.0 4270.0
11.2 5603.9
28.8 66932.0
33.7 55938.0
18.5 1907.6
- 2236.5
- 2912.0
35.1 4891.5
9.6 4251.6
44.1 8651.6
21.9 2038.7
19.4 2676.7
- 2879.1
21.1 2715.8
17.2 4020.3
34.5 2495.0
15.9 2940.0
36.6 153082.8
17.1 2908.3
25.1 3796.8
21.5 30233.5
16.4 3274.0
21.6 2917.1
28.9 5949.3
14.1 2245.5
27.0 8912.4
15.8 3304.8
31.4 8582.8
8.0 13929.6
9.2 2143.5
14.9 3383.5
11.2 3591.8
15.4 6879.4
18.1 2386.5
26.0 3075.3
17.2 3425.8
16.3 6191.1
20.4 2889.9
65.9 5509.2
17.7 3962.4
13.0 7466.2
- 3602.4
42.8 7793.7
10.5 16180.7
Rank by Market cap
Price Change
on week
52-week
Yield
high
low
14 Lloyds Banking Group
68.1 +0.0
73.1
62.2
40 London Stock Exchange
3758.0 ?35.0 3983.0 2924.0
127 Man
212.0
+5.2
212.0
121.1
96 Marks & Spencer
313.7
?1.1 395.5 297.8
102 Mediclinic International
626.0 ?23.5 887.0 507.5
118 Meggitt
490.7
+8.5 526.0 410.6
107 Melrose
217.6
+5.4
261.2
195.2
200 Mercantile Investment Trust 2200.0 +21.0 2200.0 1719.0
120 Merlin Entertainments
357.0
?5.9 537.0 349.0
151 Metro Bank
3604.0 +20.0 3834.0 3085.0
43 Micro Focus International
2582.0 +59.0 2739.0 2020.0
196 Millennium & Copthorne Hotels
580.0 ?5.0 625.5
410.2
66 Mondi
1928.5
?2.5 2130.0 1647.0
190 Moneysupermarket
366.5 +10.3 366.5 292.6
95 Morrison Supermarkets
225.2
+5.3 252.9 207.0
191 National Express
383.6
+2.7 383.6 334.7
22 National Grid
868.4
?6.7 1157.5 854.3
176 Nex Group
602.5 ?4.0 684.0 500.0
65 Next
4854.0 +329.0 5320.0 3617.0
76 NMC Health
3138.0 +253.0 3199.0 1583.0
161 Ocado
437.2 +40.1 437.8 238.5
44 Old Mutual
225.5
?6.2
231.7
188.0
83 Pearson
735.2 ?0.8
818.5 566.5
137 Pennon
761.6 ?21.4 944.0
761.5
167 Pershing Square
1064.0 +49.0 1250.0 959.0
58 Persimmon
2778.0 +40.0 2890.0 1886.0
198 Petrofac
521.6 +11.6 946.0 349.0
142 Phoenix Group Holdings
773.5
?8.5 798.5 723.0
160 Playtech
882.2 +21.7 1016.0 768.0
114 Polymetal International
923.6
+3.1 1095.0 803.5
62 Paddy Power Betfair
8870.0 +45.0 8900.0 6665.0
13 Prudential
1920.5 +15.0 1920.5 1532.0
71 Randgold Resources
7268.0 ?142.0 8190.0 6420.0
15 Reckitt Benckiser
6841.0 ?78.0 8108.0 6355.0
170 Redrow
664.5 +10.0 664.5 433.8
16 Relx
1713.5 ?25.5 1782.0 1398.0
117 Renishaw
5300.0 +75.0 5555.0 2659.0
87 Rentokil Initial
310.9
?7.1 335.8
219.1
109 Rightmove
4568.0 +68.0 4568.0 3889.0
11 Rio Tinto
3959.5 +17.5 3988.5 2910.0
140 RIT Capital Partners
1976.0 +14.0 1979.0 1815.0
35 Rolls-Royce
864.0 +17.0
981.0 650.5
171 Rotork
275.6
+8.7 275.6 223.5
20 Royal Bank of Scotland
276.3
?1.7 285.8
214.9
2 Royal Dutch Shell A
2530.0 +50.0 2533.0 1992.5
4 Royal Dutch Shell B
2563.0 +54.5 2563.0 2052.5
103 Royal Mail
455.8
+3.3 459.2 369.9
126 RPC
859.4 ?22.1 1075.0 720.5
77 RSA Insurance
625.6
?6.9 666.5 562.5
53 Sage
807.0
+9.0
810.5 599.0
94 Sainsbury, J
241.0 ?0.4
281.7 224.8
P/E
Mkt Cap
(гm)
4.0 15.8 48847.0
1.1 44.3 13032.2
3.3
- 3489.5
6.0 27.5 5096.8
1.3 67.3 4613.6
3.1 13.1 3806.6
1.0
- 4224.0
2.3
- 1800.6
1.9 17.2 3626.4
- 621.4 2897.4
2.5 46.5 11233.7
1.3 17.0 1883.5
2.6 17.0 7082.2
2.7 26.4 1985.8
2.4 14.9 5259.9
3.2 16.7 1963.0
5.3 17.5 29779.6
6.4 32.7 2287.9
3.3 11.4 7138.1
0.3 51.0 6410.5
- 244.2 2754.7
2.7 14.3 11117.1
7.1
- 5925.5
4.7 17.4 3171.7
- 2555.0
4.9 12.4 8573.6
9.7 39.4 1804.3
6.0
- 3038.8
3.3 14.2 2799.6
2.2 14.6 3972.5
1.7 54.6 7470.8
2.3 18.0 49660.8
1.0 32.9 6831.6
2.2 22.9 48088.4
1.5 10.5 2457.3
1.9 30.7 35547.3
0.9 37.5 3857.8
1.1 8.4 5712.3
1.0 33.5 4173.7
3.3 15.0 54551.4
- 3072.8
0.5
- 15898.8
1.9 31.7 2398.1
- 32813.6
5.7 33.5 113260.4
5.7 34.0 95996.8
5.1 12.8 4558.0
2.8 16.9 3544.4
2.6 55.9 6397.4
1.8 33.9 8722.7
4.2 25.1 5277.1
Rank by Market cap
49
75
84
98
136
17
31
90
42
79
169
85
156
138
108
189
39
134
24
74
41
135
69
180
32
193
145
113
51
141
143
186
12
197
89
172
175
9
99
64
158
192
184
101
54
33
Schroders
Scottish Mortgage
Segro
Severn Trent
Shaftesbury
Shire
Sky
Smith (DS)
Smith & Nephew
Smiths
Smith WH
Smurfit Kappa
Sophos
Spectris
Spirax-Sarco
Sports Direct International
SSE
SSP
Standard Chartered
St James's Place Capital
Standard Life Aberdeen
Tate & Lyle
Taylor Wimpey
Templeton Emerging Markets
Tesco
Thomas Cook
TP Icap
Travis Perkins
Tui
Tullow Oil
UBM
UDG Healthcare
Unilever
Unite Group
United Utilities
Vedanta Resources
Victrex
Vodafone
Weir
Whitbread
William Hill
Witan Investment Trust
Wizz Air
Wood
Worldpay
WPP
Price Change
on week
3562.0
462.0
586.6
2140.0
1041.0
3875.0
1009.5
518.0
1285.5
1545.0
2260.0
2464.0
614.0
2588.0
5685.0
374.0
1324.0
687.5
794.0
1251.0
427.7
699.6
211.2
806.0
209.7
125.0
531.0
1587.5
1554.5
220.4
755.5
825.0
4092.5
807.5
817.8
863.6
2682.0
236.8
2281.0
3994.0
329.3
1098.0
3660.0
689.4
435.0
1339.5
+46.0
+13.0
?0.4
?22.0
?3.0
?25.0
?2.5
+0.5
?2.5
+55.0
?87.0
?43.0
+44.0
+101.0
+65.0
?3.0
+4.0
+4.5
+13.9
+25.0
?8.9
?3.4
+4.8
+26.5
+0.4
+2.1
?1.0
+20.5
+14.5
+13.8
+8.5
?20.0
?33.0
+2.5
?11.7
+59.1
+44.0
+1.8
+158.0
?6.0
+7.3
+19.0
?20.0
+39.4
+9.0
?1.5
P/E
Mkt Cap
(гm)
2.6 18.6
0.6
2.8 8.4
3.8 17.3
1.5 9.6
0.6 28.1
2.1 25.2
2.9 25.5
1.9 17.1
2.7 10.9
2.0 21.8
2.9 16.7
0.6
2.0 278.3
1.3 32.1
- 13.4
6.9 9.9
0.8 43.2
- 1718.6
2.6 52.8
4.6 19.5
4.0 13.1
0.8 11.8
1.0
- 37.5
0.4 156.2
3.2 33.6
2.8 529.2
3.6 13.0
2.9 33.7
1.2 38.4
2.8 23.0
1.9 8.5
4.8 13.0
4.8
1.8 27.5
5.6
1.9 76.5
2.4 15.5
3.8 17.6
1.7
- 18.7
3.7
0.5 51.8
4.2 9.9
9476.0
6498.3
5856.6
5051.6
3194.7
35175.0
17353.5
5528.1
11247.7
6110.0
2489.6
5835.2
2829.8
3085.3
4180.8
2028.0
13351.2
3267.2
26130.6
6612.7
12734.2
3250.9
6910.3
2205.2
17169.6
1919.8
2942.4
3985.8
9125.5
3048.3
2976.1
2048.7
50525.2
1812.3
5576.5
2393.0
2301.4
63163.6
4978.3
7324.8
2824.7
1958.9
2103.7
4672.0
8700.0
17071.5
52-week
Yield
high
low
3562.0
467.5
587.0
2553.0
1050.0
5036.0
1023.0
558.5
1431.0
1684.0
2347.0
2507.0
646.0
2834.0
5920.0
419.5
1557.0
687.5
846.7
1251.0
446.3
795.0
211.2
807.0
213.0
126.9
544.5
1696.0
1555.0
333.6
764.5
959.0
4548.5
807.5
1056.0
1102.0
2682.0
236.8
2281.0
4307.0
329.3
1098.0
3700.0
894.5
435.6
1921.0
2901.0
323.0
452.5
2046.0
873.0
3499.0
900.0
417.0
1170.0
1444.0
1480.0
1962.0
260.9
2229.0
4244.0
279.5
1294.0
384.4
685.9
1030.0
405.0
625.5
165.1
601.5
166.5
84.1
437.0
1408.0
1068.0
145.6
645.0
635.0
3191.0
571.5
778.5
575.0
1832.0
192.4
1727.0
3512.0
240.0
898.5
1560.0
560.0
267.2
1253.0
Price/earnings ratios are based on historic data, with yield and p/e values
calculated from the most recent reported dividends and earnings per share,
using trailing 12-month figures. 52-week highs and lows are end of day.
nc = no change. Data provided by Morningstar. Any enquiries please contact:
dataquestions.uk@morningstar.com
MONEY
11
The Sunday Times January 7, 2018
MONEY
?I DON?T FIND IT HARD
TO GET INSURED?
TERRY WAITE,
FAME & FORTUNE,
PAGE 18
SAVE г1,800 WITH
OUR FINANCIAL
FITNESS PLAN
PAGE 12
THE CRUISE
PASSENGERS LEFT
OUT IN THE COLD
QUESTION OF MONEY,
PAGE 14
12
14
PUZZLES
CROSSWORDS,
SUDOKU & MORE
PAGES 16-17
Follow us on Twitter @ST_Money
I have never seen such appalling service
LORNE CAMPBELL
Toto Energy
promises ?no hassle
switching?, but is
under fire for hiking
prices and signing up
people without their
consent, reports
Jedidajah Otte
O
ne of Britain?s newest energy
suppliers has been accused
of switching householders to
its services without their
consent and hiking prices by
as much as a third for people
who thought they were on
fixed deals. Toto Energy,
which began operating a
year ago, attracted about
10,000 new customers in October and
November after its low prices pushed it
briefly to the top of best-buy tables.
The Brighton-based company, whose
website promises ?no hassle switching?,
is one of 178 electricity and 159 gas
suppliers licensed to operate in Britain.
Some householders claim they were
misled by Toto?s door-to-door sales representatives, who are paid on commission. The customers say the reps persuaded them to switch by promising huge
savings that did not materialise.
Others claim their accounts were
switched to Toto without their knowledge ? or even despite them having
made clear they wanted to stay with their
current suppliers.
The company is also accused of taking
monthly payments without sending bills
to some customers, who then struggled
to contact Toto by phone to obtain an
explanation.
Energy experts said the catalogue of
complaints raised concerns about the
flood of new small suppliers into the market and the ease with which people can
be switched by what the industry calls
?erroneous transfers?.
Smaller suppliers often offer marketleading deals to attract customers away
from the big six ? British Gas, EDF,
Eon, SSE, Npower and Scottish Power
? but are less able to shield them from
price fluctuations in the wholesale
market.
Ofgem, the industry regulator, confirmed it was working with Toto to
resolve issues relating to transfers as well
as ?inaccurate tariff labelling?.
Widespread anger with Toto erupted
on social media after the company
announced last month that it was raising
the cost of gas and electricity by as much
as 30% for some customers, blaming
higher wholesale prices. This was despite
a guarantee in a welcome pack sent to
about 15,000 customers that their prices
would be fixed for a year.
When contacted by Money just before
Christmas, Toto blamed the mistaken
price pledge on a computer error. ?It was
a system-generated bit of code,? said
Tracy Houlihan, the chief executive.
The next day, however, the company
emailed Money to say it would cancel the
increases for customers who had
received the price guarantee. Despite
this, several householders said last week
they were still paying the higher rates.
Glynis Rees, from Pontarddulais, near
Swansea, is among a number of customers who say they were switched to Toto
Sara and Ted Featonby thought they had a fixed-rate deal, then learnt their monthly direct debit would increase to г133
I was stressed out.
I reached a point
where I didn?t
know who was
taking the money
without giving proper consent. ?This
man knocked on my door and asked me if
I wanted a smart meter,? she told Money.
?I said, ?No, thank you.?
?He said, ?Everybody is having them.?
I said, ?No, honestly, no thank you, I don?t
want one,? and just closed the door.
?Weeks later, in June, I got a letter from
my gas supplier, Npower, saying, ?Sorry,
are you leaving?? ?
Rees, who has a prepayment meter,
contacted Npower and told the company
she had not given the salesman her
name, let alone consent for the switch.
?I didn?t have any correspondence
from Toto, no letter, nothing. Npower
said it was an erroneous transfer, which
takes nine weeks to resolve, possibly
longer,? she told Money.
In August, Rees received a letter from
her electricity supplier, Swalec, saying
it was sorry she was moving elsewhere.
She was not reconnected to her previous
gas and electricity suppliers until last
month.
?I was really stressed out about it,?
the 66-year-old added. ?I reached a point
where I didn?t know who was taking
the money.?
When contacted by Money, Toto said
it had had a ?sign-up? at Rees?s address,
but under the name ?Sharon Murphy?.
The company suggested someone with
that name living close by may have
mistakenly given the wrong address.
Rees said she did not know a ?Sharon
Murphy?.
In another case, a 35-year-old woman
from Bristol said she had been switched
to Toto twice in three months without
her permission.
She told Money a salesman knocked
on her door and said she could save г62 a
year if she transferred to the fledgling
company. She decided it was a worthwhile saving and gave him her details.
Once the salesman left, however, she
received an email from Toto stating she
would save just г10 a year on electricity
and г4 on gas.
?It said, ?If you change your mind,
email this address,? ? the woman said.
?Ten minutes after the salesman had left
I emailed and said, ?You lied to me at the
door, you?re not a company I want to deal
with, I want to cancel.? ?
Nonetheless, her supply was switched
to Toto. After several weeks, Toto told her
it would take at least nine weeks to switch
her back to her previous supplier.
This did eventually happen, but last
month she found she had been shifted to
Toto again ? without any authorisation.
?I?m fuming. They shouldn?t just change
customers over without them knowing,?
she said.
Toto told Money the woman had cancelled within the statutory cooling-off
period, but admitted this ?wasn?t
actioned in time?. This meant it took over
her supply from October 3 until she was
returned to Utilita on November 12.
Some householders who willingly
switched to Toto say they have not
enjoyed the savings that were promised
by the company.
Sara Featonby and her husband Ted,
No champagne for me, darling.
Not until I?ve ?led my tax return . . .
RUTH
EMERY
On New Year?s Eve I became
one of those sad statistics that
HM Revenue & Customs
(HMRC) publishes every year.
Along with 18,824 other
people, I did my tax return.
I got it out of the way during
the afternoon, so my new
year celebrations were not
completely miserable.
However, of those thousands
sending in their returns on
the final day of 2017, an
amazing 205 pressed
?submit? on HMRC?s website
between 11pm and midnight.
About 5.4m people have yet
to file.
It was my second trip to
self-assessment land. Last
time, three years ago, was
hell. Would this be any
better?
I followed a gov.uk link
saying ?Sign in to file your
tax return? and after typing
out my 12-digit user ID and
password, I was in. The page
displaying my tax account
contained several links ? but
there was no button that said
?Fill in tax return?.
Perplexed, I spent half an
hour wandering around my
5 WAYS TO
CUT YOUR
TAX BILL
Page 13
online account, coming out
of the glossy self-assessment
pages on gov.uk and onto the
creaking HMRC website to
load up a tax return.
As my husband kept our
one-year-old amused in the
lounge, I sat at the kitchen
table. Depressingly, when
I reached the fourth page
and glanced at the top of the
screen it said: ?1% complete?.
I was then asked about
underpaid tax in previous
years. The website notes
mentioned a particular HMRC
Continued on page 13 ?
of Cleckheaton, West Yorkshire, moved
from British Gas after seeing Toto on the
financial website Money Saving Expert.
The supplier?s prices appeared to be
cheaper than any of its rivals covered by
the website?s Cheap Energy Club.
On December 6, however, Featonby,
56, received an email stating their usage
was projected to increase from г76 to г96
on January 3 ? a jump of 26%. On December 14, another email arrived saying they
had been changed to a ?seasonal direct
debit?, which meant their monthly payment would rise still further to г133.
She sent several replies saying they did
not want the direct debit to change. She
said there was no response from Toto
until December 27, by which time she
had initiated a switch to SSE.
?I just wanted out,? said Featonby,
who works in education. ?I have never
encountered such appalling service.
?I was not aware that the tariff I was on
allowed this to happen. I tried to speak to
the company to see if I could switch to a
fixed tariff before the price hike, but I am
still waiting for it to return my call.
?My online account with Toto is useless as it doesn?t allow you to access your
payments or to see its other tariffs. I have
emailed customer services at least 10
times. They send a generic reply to say
they are looking into the issue and will
respond personally within 48 hours. This
just never happens.?
Toto accepted the Featonbys had been
told their tariff was rising on December 6,
but said the increase had later been
retracted. The seasonal change in the
direct debit ? which reflects higher
energy consumption in the winter compared with the summer months ? had
gone ahead despite this, the company
admitted.
Helan Trisorio, 31, a teacher from
Lancaster, had a similar experience.
?They knocked on my door and said that I
was spending loads on my bills, and
could save over г300 a year,? she said.
?I signed up with them on August 19.
They guaranteed me a rate of г62 a
month and stated this wouldn?t change.
Just before Christmas I received an email
hiking my price up to г92 a month.
?I said I was switching away from Toto,
and they emailed to say, ?Sorry, we aren?t
changing [your payment] now and will
keep our price guarantee.? But on January
2 they charged my account with г94.40.?
The supplier said the change was
?down to a change of seasonal direct
debit and not a change in tariff price?.
Toto said: ?We train any representative to act to the highest standard and will
investigate and take firm action if any is
falling below that standard.?
The company added: ?If we receive
any complaint that a customer has been
misled, this is fully investigated through
our sales complaint process, although
these instances are rare.?
Ofgem said it was clamping down on
erroneous transfers. About 74,000
accounts were affected last year,
although this represented just 1% of the
total number of switches.
About 80% of erroneous transfers
were down to human error or ?poor
data? held by suppliers, Ofgem added.
YOUR STORY
Has your energy switch gone wrong?
Email money@sundaytimes.co.uk
Get out the
budgie-smugglers
Could you handle James Haskell?s fitness plan?
Pick up your copy of The Times tomorrow.
12
The Sunday Times January 7, 2018
MONEY
BRIEFING
HOUSE PRICES EASE SALES OF NEW CARS
OFF THE ACCELERATOR GO INTO REVERSE
COMMUTERS ?PRICED
OUT? BY RAIL FARE RISE
If you would like to receive the
free weekly Money email bulletin,
visit thesundaytimes.co.uk/
moneybulletin. The bulletin is
exclusive to digital subscribers.
Property prices rose by 2.6%
last year, with London the
weakest-performing region,
according to Nationwide
building society. This
represented a modest
slowdown from 2016, when
the average price went up
by 4.5%. The fastest-growing
region was the West
Midlands, where prices
increased by 5.2% year on
year. In London, by contrast,
they fell by 0.5%. The
average price of a property
is now г211,156. Nationwide
expects average prices to go
up by about 1% this year.
Average rail fares rose by
3.4% last week, the biggest
increase since 2013, with
season tickets for many
commuters going up by
г100 or more. A season
ticket from Cheltenham Spa
to London has increased
by г460 from г12,784 to
г13,244. Campaign groups
warned that many people
were being ?priced off? the
railways. The Department
for Transport said fare rises
were capped in line with
inflation and the proceeds
would be used to improve
the network.
Contact us Money,
The Sunday Times,
1 London Bridge Street
London SE1 9GF
Email money@sundaytimes.co.uk
Advertising If you would like to
buy an advertisement in Money,
email Paul Douglass at
paul.douglass@news.co.uk
or call him on 07917 598 422
New car sales fell by 5.7% in
2017 ? the first drop in six
years, according to industry
body the Society of Motor
Manufacturers and Traders.
Sales of diesel cars fell 17.1%.
CALL FOR ?LATTE LEVY?
IN WAR ON WASTE
MPs are calling for a 25p
charge on disposable coffee
cups. The ?latte levy? would
be used to improve the
country?s recycling and
reprocessing facilities.
Fraud fears
over ?open
banking?
revolution
Reforms designed to
help you get the best
current account deal
should come with a
security warning,
says Ali Hussain
Would you allow a company to access
your current account details to work out
whether switching to another bank or
building society could save you money?
The government and the banking industry want you to do just that.
In less than a week, Britain?s largest
current account providers will, with your
express permission, be allowed to reveal
information about you to third parties
and other banks. They will be able to pass
on not just your account number and sort
code, but also details about your balance,
regular direct debits and how often you
go into the red.
The government hopes this will allow
rival companies to compete for your business more effectively, whether it be those
wishing to lend you money or help you
better manage your finances, or banks
claiming to offer a more cost-effective
current account.
However, there are fears the new system ? which Britain will be the first in the
world to introduce ? could leave consumers vulnerable to online fraud, despite
the promise of safeguards.
?There is always a risk when you open
up information to third parties,? said
Tony Neate, chief executive of Get Safe
Online, a government-backed fraud
awareness and advice service. He told
Money the risk was not just from the third
parties that will assess the account
details, ?but also from fraudsters who
may falsely claim to be legitimate and ask
for information?.
The ?open banking? revolution is the
brainchild of the Competition and Markets Authority (CMA). It conducted a twoyear investigation that found many
people were paying more than necessary
for current accounts and were not
switching because of the difficulty of
comparing deals.
Rather than capping bank charges, as
many had hoped, the competition watchdog instead recommended that banks be
allowed to share customer data so third
parties can crunch the numbers to find
the best deals.
From Saturday, eight banks, including
Barclays, HSBC, Lloyds Banking Group,
(which owns Halifax), Royal Bank of
Scotland (which owns NatWest) and Santander, as well as Nationwide, Britain?s
largest building society, will be able to
share your data with third parties. Some
business banking customers may have to
wait a little longer for open banking.
Over the coming weeks and months,
you may receive marketing material from
companies, such as price comparison
sites and rival banks, asking you to share
your data so they can find the best deals
for you.
After obtaining consent, a company
will request the specified details from
your current account provider. Your
bank will check the company is regulated
before passing on the data.
You can also give permission for the
third party to make a payment or move
money from one account to another on
your behalf. For example, you could ask
it automatically to move money into a
current account that is in danger of going
into the red, so you avoid the danger of
overdraft fees.
One of the first companies to take
advantage of this financial revolution is
Yolt, backed by the Dutch bank ING,
which has signed up more than 100,000
DORMANT ACCOUNTS HOW THE FOOTSIE
TO BE AWOKEN
HAS PERFORMED
I have made it
my personal
mission to . . .
restore the
dream of
homeownership
Theresa May
on stamp
duty cuts for
first-time buyers
The government plans to
unlock г330m from dormant
bank and building society
accounts to help the
homeless, disadvantaged
young people and local
charities over the next four
years. Typically, a current
account is declared dormant
if a bank or building society
fails to contact the holder
for a year. Some savings
accounts are classified as
such after five years.
Mylostaccount.org.uk is a
site that can help reunite
people with lost current and
savings accounts.
The FTSE 100 rose 37 points to close the week at a record
high of 7,724 as the global rally that began last month
continued to lift shares worldwide.
+7.4%
over a year
(up 11.3% with dividends)
three years
+20.4% over
(up 34.7% with dividends)
five years
+26.8% over
(up 54.5% with dividends)
+21.7%
over 10 years
(up 77% with dividends)
Inflation: in November, CPI was 3.1% and RPI was 3.9%
HOW IT SHOULD WORK
1
Lisa wants to see if she
can cut her overdraft
charges by switching
bank accounts and
searches online
for a company that
can help her decide
2
After finding one,
she downloads the
company?s app and
authorises her bank
to hand over her data
г
3
г
The app works out the
best account for her
and she switches,
saving money
people for its money management smartphone app. It already allows users to
register a number of accounts so they
can keep track of their finances in one
location.
The free app does this by accessing
their banks? online banking services and
?screenscraping? the section that shows
their balances.
However, customers have to hand over
their bank login details and give the app
permission to collect the data. This
potentially leaves them liable in the event
of fraud as banks? current account terms
The consumer
group Which?
thinks the change
could lead to a rise
in payment scams
and conditions prohibit the sharing of
security details. That will change from
Saturday, when Yolt will be able to
request the data directly from banks ?
once users have given permission.
Yolt said the data would be stored on
?secure and compliant servers? in
Poland and that users could ask for it to
be deleted at any time. ?Security is our
highest priority,? it said. ?User data in our
app is protected with bank-level security
using physical, electronic and operational measures.?
Third parties will have to be registered
with, and regulated by, the Financial
Conduct Authority or another European
regulator. Yolt, for example, is regulated
by De Nederlandsche Bank, the Dutch
equivalent of the Bank of England.
In order to obtain your data, third parties will have to explain what they
require, how long they need it for and
what they will do with it.
High street banks are keen to adopt the
technology. HSBC described open banking as ?a real opportunity to increase the
range of financial services available to
consumers?.
It said its customers would be able to
?give consent for third parties to access
their current account transaction data
from January 13, and for third parties to
initiate payments on their behalf from
February 28?.
Santander said it was ?fully committed? to open banking. However, it
warned that customers may not be able
to stop a payment once consent has been
given to a third party. Also, it urged its
customers to check that any third parties
they allow to access their accounts are
?authorised to carry out the services they
are offering?.
Critics are concerned such protections
may not be sufficient. The consumer
group Which? fears open banking could
lead to a higher number of so-called
authorised push payment scams. This is
when fraudsters trick account holders
into making a payment or transfer to a
bogus account, often by posing as their
bank or the police and using illegally
obtained data about victims to convince
them of their authenticity.
Gareth Shaw, head of Which? Money
Online, said that while open banking had
the potential to give people greater control of their money and boost choice, it
also raises ?critical questions around
data privacy and security?.
There are fears that hackers will prey
on smaller firms, which may have less
robust security. Large companies are not
immune from attacks, though, as recent
data breaches at TalkTalk and Equifax
demonstrated.
Banks and building societies have
made it easier for customers to move
money about. Branch closures are
encouraging more phone and computer
banking, but fraud losses have increased
as these technologies have taken off.
Cases of ?remote banking fraud?,
which involves internet, phone and
mobile banking, have doubled in four
years from 9,566 in the first six months
of 2013 to 18,848 in the same period last
year, according to UK Payments. Losses
leapt from г31.7m to г73.8m over the
same period.
Open Banking, the organisation created by the CMA to manage the shake-up,
insisted ?the system has extremely heavy
security built in?. It said third parties
would typically hold consumers? data for
up to 6╜ years, but this was simply to
ensure there was ?a full record of the
work done in case of any later dispute
or inquiry?. Account holders can ask for
the data to be erased, though.
YOUR STORY
Would you give your details to an
app? Are you worried about fraud?
Email money@sundaytimes.co.uk
New year, new financial you: the detox that could save г1,800
Bulk up your bank
balance by cutting
back on unused
subscriptions and
costly mobile deals
Ali Hussain
Many of us will have joined a
gym to work off the excesses
of Christmas and new year
celebrations, but January is
also a good time to trim some
fat from your finances.
Simply paying for what
you use rather than for things
that sound attractive ? such
as superfast broadband,
unlimited mobile calls,
income protection cover and
perhaps even membership of
a swanky gym ? could save
you up to г1,800 this year.
The best thing is it won?t
feel like a sacrifice. ?If you
have a subscription to
something you never use, the
only thing you?ll notice by
cancelling is that you end up
with more money,? said
Georgie Frost, consumer
champion at the comparison
site gocompare.com.
Start your financial detox
by following these tips.
Cancel
subscriptions
Save г340
About four in 10
people have standing orders,
direct debits, subscriptions
and memberships they no
longer want or use, according
to a survey of 2,000 people
by GoCompare. These
?zombie bills? cost people
г340 a year on average.
Some of you may have
subscribed to Amazon Prime
to benefit from quick and free
delivery over Christmas. New
members can take advantage
of a 30-day free trial, but after
that you automatically pay
г7.99 a month unless you log
in and cancel.
About 5% of respondents
to the GoCompare survey
said they were paying for
Amazon Prime, but did not
use its delivery or video
services. Other common
unused subscriptions
include streaming services
that are rarely watched,
such as Amazon?s big rival
Netflix.
Review your bank and
credit card statements.
Regular payments can be
monthly, quarterly, biannual
or annual, so look at
statements for 12 months.
Do you need
that gym
membership?
Save г228
Don?t fall for the ?new year,
new you? hype. About 6% of
respondents to GoCompare?s
survey said they did not use
their gym membership,
which can cost г25 a month
or more.
If you can do without gym
instructors, saunas and spa
baths, go for no-frills options
such as Xercise4Less
(xercise4less.co.uk), which
costs as little as г9.99 a
month. It has more than
50 branches. PureGym
(puregym.com), which has
more than 200 gyms across
Britain, charges from г8.99
to г17.99 a month, with
?bolt ons? available.
Another option is a pay-asyou-go service. These can
work out more expensive if
you are a regular long-term
gym user but can save you
money if you are an
occasional visitor. The Gym
(thegymgroup.com) has
about 110 branches and
offers a day pass for г4.99.
Slow your
broadband
Save г180
Superfast
broadband sounds appealing,
but do you really need it?
Virgin Media provides the
fastest mainstream
broadband service in Britain,
offering up to 300 megabits
per second (Mbps) download
speed. More specialist
providers, such as
Hyperoptic, boast speeds
of 1,000Mbps.
For most people, a fraction
of these speeds is good
enough, according to Andrew
Ferguson of the analyst
thinkbroadband. ?Once you
have 20Mbps-30Mbps, and
you are the only person using
the service, you will not
By the age of 50 you could
easily be paying г50 a month
for income protection and
г20 a month for life cover. If
your employer offers this,
you could save г840 a year,
according to Coles.
Many of us go to the gym in January ? but will we still be using our membership in March?
notice much difference if you
jump to a 100Mbps or faster
connection,? he said. ?Higher
speeds are only worthwhile if
you share your connection
with others.?
Most streaming services,
such as Netflix, recommend
you need no more than
25Mbps to watch at even the
highest resolutions.
A 300Mbps service from
Virgin Media costs г48 a
month, after an introductory
period. This compares with
г33 a month for the 50Mbps
service ? г180 a year less.
Cut your
life cover
Save г840
Many employees
buy life insurance policies
without realising they could
be protected by their
employer, said Sarah Coles,
personal finance analyst at
Hargreaves Lansdown.
A common employee
benefit is ?death in service?
cover, which typically pays
out a tax-free lump sum of
four times your salary to
your dependants if you die
while in employment.
Income protection cover
is also offered by many
employers. This pays out if
you are unable to work
because you have an accident
or become ill. It pays a
percentage of your income ?
usually up to 60% ? until you
are able to return to work,
retire or die.
Pay only for the
phone calls you
actually make
Save г160
In most cases, mobile phone
calls and texts should be free
if you are on a contract, as
long as you stay within your
monthly usage allowance.
However, about threequarters of users are on the
wrong deal, according to
Billmonitor, a mobile phone
tariffs comparison service.
This means users either
do not use anything near
their allowance or regularly
go beyond it, incurring
hefty fees.
Based on an analysis of
about 275,000 people who
have used Billmonitor, the
firm estimates the average
saving from switching to the
most appropriate deal is г320
over a 24-month period.
You have to allow
Billmonitor access to your
mobile usage data to use its
service. This is done by
entering your number and
mobile provider. Your
provider then sends details
of how you have used your
phone over the previous
three months ? for example,
how many texts and calls
you make; how often you
make overseas calls; and
how much data you use.
Details of what you download
or who you call are not
shared with Billmonitor.
Based on your usage,
it will work out the best deal
for you by comparing more
than 3m tariffs and bundles
from O2, EE, Vodafone,
Three and Tesco Mobile.
The service is free to use.
Billmonitor is paid a fee if
you switch to another
provider via its website.
Other phone comparison
services include Ctrlio.
Claim back
energy
overpayments
Save г85
Energy firms are sitting on
an estimated г928m of bill
overpayments, according to
analysis by GoCompare ?
that?s г85 for each household.
Overpayers tend to be
those who pay by monthly
direct debit, which is based
on an estimate of usage over
the year.
If you are concerned about
the size of your balance, ask
your supplier to refund it ?
which they are obliged to do
?unless there are reasonable
grounds not to?, according to
the energy regulator Ofgem.
To avoid building up a
surplus on your energy
account, ensure you provide
gas and electricity providers
with regular meter readings.
13
The Sunday Times January 7, 2018
MONEY
Will the commodities recovery end?
The answer may lie on the Silk Road
Fears about climate change could persuade some investors to dump mining and oil stocks, but China?s plans should give them hope
PERSONAL
ACCOUNT
IAN COWIE
N
obody rang a bell at the
bottom of the crash in commodity prices in January
2016, but the sharp recovery
since then offers important
lessons for investors. First,
extreme volatility in the
prices of coal, copper, iron
ore and oil ? some of the
building blocks of an industrial economy ? demonstrates the danger
of taking short-term bets on the next
movement in markets. Followers of fashion who bought at the top of the last bull
run and sold two years ago would have
lost three-quarters of their money.
Second, medium to long-term investors who resist the urge to bale out during
bad times can obtain good rewards from
soundly based businesses that provide
the necessities of modern life.
Shares in Antofagasta, one of the biggest copper miners in the world, have
soared by 43% in the past year and ? like
BHP Billiton, a bigger conglomerate that
produces coal, iron ore, oil and copper ?
the share price has doubled over the past
two years.
Here and now, the most important
question for investors in this sector or
these companies ? including your humble correspondent ? is whether this
recovery is likely to continue.
That is by no means guaranteed when
fears about climate change and pollution
are forcing governments to find alternatives to oil and coal, which may eventually reduce demand and prices. As the
former Saudi oil minister Sheikh Ahmed
Zaki Yamani is said to have observed: the
Stone Age didn?t end because we ran out
of stones and the oil age will end before
the world runs out of oil.
However, in much the same way that
the Bronze Age created demand for different materials, the present shift
towards electricity as a source of energy
for cars and other vehicles is boosting
the consumption of copper and other
commodities.
For the benefit of any readers who
know as little about metallurgy as I do, it
may be worth pointing out that copper is
excellent at conducting electricity, while
lithium ? the lightest metal ? is essential
to making the most efficient batteries.
As with investing in any sector, a diversified portfolio of assets should produce
gains to offset losses elsewhere. And
spreading risk is particularly important
when prices rise and fall as dramatically
and unpredictably as they do in commodities markets.
Pooled funds, such as unit or investment trusts or exchange-traded funds,
offer a convenient and cost-effective way
to spread money over a wide range of
companies and countries.
The BlackRock World Mining investment trust digs deeper and delivers more
than most of its rivals. This fund, run by
Evy Hambro since 2009, has beaten the
commodities and natural resources sector average over the past year, five years
and 10 years. Its respective returns over
these three periods were a gain of 24%
and losses of 13% and 11%.
Those figures serve to emphasise how
extreme the bubble in this sector became
before it burst. No wonder the shares still
trade at a discount of nearly 14% to their
net asset value. So an investment of г860
buys г1,000 of this fund?s underlying
holdings in BHP Billiton, Rio Tinto and
Glencore, three of its top 10 stakes.
Income seekers may also note that
quarterly dividends deliver a yield of
about 3%. According to the Association of
Investment Companies and the independent statistician Morningstar, the
yield has risen by an annual average of
nearly 11% over the past five years.
Electric cars are not the only reason to
be optimistic about commodity prices.
President Xi Jinping of China has
launched what he called ?the project of
the century? to build infrastructure ?
such as ports, railways and roads ? to
improve his country?s connections with
the rest of Asia, Africa and Europe.
China is the second-biggest economy
in the world and home to nearly one-fifth
of humanity. So perhaps we should not
be surprised that the infrastructure projects it is funding across dozens of countries are forecast to affect 60% of the
global population. Xi argues that this is a
better way of recycling China?s massive
trade surplus than investing its export
revenues in American treasury bonds.
This Belt and Road initiative, as it is
known, might have received more coverage in the West had our own politics and
economics not proved so exciting
recently. However, having been launched
by Xi in 2013, it is now up and running.
The first train loaded with goods from
Yiwu in eastern China rolled into Barking, east London, last year after travelling
through Kazakhstan, Russia, Belarus,
Poland, Germany, Belgium and France.
This is just one part of a modern version
of the Silk Road to which China has committed $1 trillion (г750bn). That will create massive demand for commodities.
Of course, nobody will ring a bell at the
top of the current upward trend in prices.
The rollercoaster ride we have already
experienced, however, reminds me of an
important advantage that individual or
DIY investors can enjoy ? compared with
most professional or institutional fund
managers. We do not have to answer to a
board of directors or trustees every few
months or years and so can afford to take
the long view. In such a volatile sector,
that probably provides the best
prospects of coming out ahead.
ian.cowie@sunday-times.co.uk
or Twitter @iancowie
ST DIGITAL
Read a breakdown of Ian Cowie?s
?forever? fund
thesundaytimes.co.uk/cowieholdings
ANDREA BRUCE/ THE NEW YORK TIMES/ EYEVINE
China?s infrastructure ambitions are vast ? and include Khorgos Gateway, a rail hub and town now under construction in the desert on its border with Kazakhstan
43%
г750bn
Rise in the share price of the copper
miner Antofagasta over the past year
Amount China plans to spend on
its Belt and Road programme
You better
wait a minute,
Mr Taxman
Don?t pay HMRC
more than you owe
? but make sure
you pay on time,
writes Ruth Emery
About 5.4m people have yet to
file their 2016-17 tax returns
online and pay any money
owed ? and the deadline is
less than four weeks away. If
you miss it, you face an
automatic г100 fine.
More than 11m people must
submit a return by January 31,
including the self-employed,
those with significant income
from savings, buy-to-let
landlords and parents who
claim child benefit but earn
more than г50,000 a year.
If you have not already
paid your bill, here are five
legitimate ways to reduce
the amount you owe.
1
Claim extra pensions
tax relief
Many higher-rate and
additional-rate taxpayers
miss out on free money
from the government by not
including pension payments
on their tax returns. The
insurer Prudential says as
many as 1m people could be
failing to claim a total of г1bn
in pensions tax relief each
year from HM Revenue &
Customs (HMRC).
Pension contributions
benefit from relief paid at the
saver?s highest rate of income
tax: it costs a basic-rate payer
г80 to make a г100 pension
contribution, while a higherrate taxpayer pays just г60
for the same effect and an
additional-rate taxpayer г55.
Personal pensions,
including group and selfinvested personal pensions,
give a 20% top-up to all savers
? so higher earners eligible
for extra tax relief must apply
for it themselves. Some
workplace pensions also
operate in this way, such as
the government-backed Nest,
which runs schemes for more
than 500,000 firms.
However, other workplace
pensions pay the correct
amount of relief ? 20%, 40%
or 45% ? to each saver and
there is no need to claim
extra. Some employers use
salary sacrifice to pay
pension contributions, in
which case staff also receive
the correct relief.
NEIL HALL
If you donate to London Zoo, don?t forget to claim Gift Aid
?The easiest way to work
out how tax relief is collected
in your workplace pension is
to contact your employer,?
said Nathan Long at the
wealth manager Hargreaves
Lansdown. ?If the pension is
not through the workplace,
any higher or additional-rate
tax relief needs to be claimed
from HMRC.?
To get back the extra 20%
or 25% relief, include the
contributions on your tax
return or write a letter to
HMRC. You can claim for
contributions made up to
four years ago.
2
Save on buy-to-let
refurbishment
Those who let out
furnished buy-to-let
properties are
governed by rules that came
into effect in April 2016.
Rather than deducting a flat
10% of rent as a ?wear and
tear? allowance, as was
previously the case, you can
now claim back only what
you have spent. So if you
replace a sofa, kitchenware or
a vacuum cleaner, keep the
receipt. You can also offset
the cost of disposing of the
item against tax.
If the new item is a
significant upgrade, you can
claim only the cost of a
like-for-like replacement.
The same principle applies
to deducting the cost of
repairs, redecorating or
other work.
Repainting the walls is
deductible, but building an
extension is not. That counts
as a home improvement,
which you can set against a
possible capital gains tax bill
when you sell.
INFLATION IS THE
SAVER?S ENEMY
SHARES ARE THE
BEST DEFENCE
Many commuters who
struggled into work last
week paid substantially
more for the privilege of
doing so by rail.
Train companies imposed
an average increase of
3.4% on ticket prices from
Tuesday, the biggest annual
rise for five years.
3
Grab the Gift Aid
Often overlooked
on tax returns are
charitable donations,
according to Nimesh
Shah, a partner at the
accountancy firm Blick
Rothenberg. Higher-rate and
additional-rate taxpayers
donating via Gift Aid can
claim an extra rebate of 20%
and 25% respectively.
Shah said: ?People are
generous with their
charitable donations,
whether it?s donating to a
work charity or a friend
running a marathon.
?When completing your
return, you can include the
donations you have made
throughout the year ? and
the ones made after the tax
year up to [the date you file]
your return. However, you
can?t claim for these
donations again next year ?
keep a record.?
So if you sponsored a
colleague to do a triathlon
last month, and claim for
this in your 2016-17 return,
make sure you do not put it
on next year?s form too.
Museums, theatres and
attractions such as zoos often
allow you to add a charity
donation to the ticket price.
These can be added to your
Gift Aid total, as can money
raised by charity shops for
selling items you donated.
4
Don?t forget the
work expenses
Be sure to include
all allowable
deductions. If you
often work from home, you
can claim back part of
household bills such as
Those who use Northern
services will be paying
4.7% more ? at a time when
consumer prices index
inflation stands at 3.1%.
Perhaps the next time
the transport secretary
Chris Grayling travels to
Westminster from his Surrey
constituency, now he?s
back from Qatar, he will
understand why so many
commuters are furious.
The rise ? and others
that consumers have had
to put up with as part of the
continued squeeze on living
standards ? reminds us why
council tax, energy and
broadband.
If you use your personal
car for work and your
employer has reimbursed
you for less than the
approved mileage allowance
(45p for the first 10,000 miles
and 25p thereafter), you can
claim the difference, though
not the cost of getting to and
from work.
The cost of books and
subscriptions can also be
included on your tax return.
For example, if you are a
member of a professional
institute required for
your employment, the
subscription fee is an
allowable deduction.
5
Submit and pay
on time
The easiest way to
avoid paying too much
to the taxman is to
ensure the return is
submitted by midnight on
January 31. Regardless of
whether you owe any tax, a
г100 fine applies for returns
filed up to three months late.
There are very few excuses
that HMRC will accept for
late returns.
Those submitting for the
first time must move even
faster. If you do not already
have a unique taxpayer
reference, you must apply
for one ? it is sent to you by
post. Once you have used this
to enrol online, HMRC will
post the activation code you
need to submit your return.
Both items of mail can take
up to 10 working days to
arrive. Leaving it too late to
get an activation code will not
be an acceptable excuse.
financial planning for
anything other than the very
short term should include
seeking protection from the
effects of inflation.
This means investing in
shares ? directly or through
stock market-based funds
such as unit and investment
trusts or exchange-traded
funds.
Unlike savers who have
bonds and bank or building
society deposits, stock
market investors own a
stake in the companies
whose goods and services
we buy in our daily lives.
Many of these firms can
raise their prices and pass
some of these increased
revenues to shareholders.
Several fund managers ?
including Fidelity, JP Morgan
and Witan ? accept regular
investments of as little as
г50 a month. That?s less
than many people?s rail
fares.
It may not seem much
consolation to commuters
crammed into trains that
cattle would not tolerate,
but the stock market offers a
way to benefit from inflation
as well as suffer from it.
Yes, I ?led my return
on December 31
? Continued from page 11
document that I did not have
? though I had received a
letter in November setting
out my underpaid tax. Should
I just use those figures?
HMRC says you must
answer all questions correctly,
so I thought I should check.
I launched the Revenue?s
webchat tool and was told I
was second in the queue.
He was sorry
but he was
not qualified
to answer tax
questions
?David? answered, but we
got cut off before he could
help. I tried again and this
time got ?Mark? ? but he
worked in the IT department.
He was sorry but he was not
qualified to answer tax
questions. It seemed the
system was so busy it was
rerouting queries to the IT
helpdesk. I tried again ? and
got Mark. I tried once more
? and once more got Mark.
My husband asked how I
was getting on. I gravely told
him I would have to phone
HMRC. After several minutes
listening to a recorded
message, I got through. Wow.
That bit was quite painless.
The tax adviser spent a
while finding the figures for
me. And of course, they were
the same as those on my
November letter.
Finally, it was time to
calculate my bill and submit
the return. The website spat
out a 32-digit ?submission
receipt reference number?
and I was done.
Well, I just needed to
pay my bill. But where had
that magic number gone? It
was not on the final webpage,
nor on HMRC?s confirmation
email. My online account
said: ?No tax is due at the
moment?. If only.
I discovered it can take up
to 72 hours for the amount to
be displayed. Last Tuesday I
checked and the figure was
still not showing. Underneath
it said ?Get your SA302 tax
calculation?. I opened the
document and there it was . . .
The process had taken
more than 48 hours ? all to
pay a bill of г48.81.
YOUR STORY
Have you filed your tax
return yet? Was it easy?
money@sundaytimes.co.uk
14
The Sunday Times January 7, 2018
MONEY
The frosty
cruise staff
ruined our
dream trip
QUESTION
ON
EY
OF MONEY
LEY
JILL INSLEY
Fighting your ?nancial
and consumer battles
M
y partner and I took a
cruise down the coast
of Alaska with the
company Holland
America last year. The
total cost for the two of
us was г7,000. On the
first night I found two
cabin staff going through
my half-unpacked
luggage. They said they were ?turning
the bed down?. I told them they were
lying and that I would report them.
The next morning, another member
of the crew pushed his way, aggressively,
ahead of me into my cabin and asked me
who I was and what I was doing there.
I told him to go away. I felt the two
incidents were related and that the
cabin staff feared I would report them.
I did report the two incidents to a
young ? and, I suspect, inexperienced
? member of staff at the busy guest
relations desk on the ship. At no point
was it suggested I talk to someone more
senior in a private setting. I said I was
very unhappy, I felt I was being stalked,
I did not feel safe, and that I might like to
leave the ship at the next port. I was told
this would be in two days? time. I replied
sarcastically with a throwaway remark,
saying: ?It would be quicker if I jumped
overboard and swam!?
I returned to my cabin and found a
doctor, a nurse and a security guard
waiting for me. They said they needed
to talk to me about ?my mental health
problems and my ideations of suicide?.
I said neither of those things applied to
me and refused to talk to them.
Finally, after 45 minutes, they paged
my partner and she confirmed that my
comment had been an ill-judged remark,
and that I did not suffer from ?mental
health problems or ideations of suicide?.
She advised them to go away and leave
me to calm down, adding that they could
better spend some time investigating my
initial complaint, and that I would come
and talk to them later. They agreed to go
away but not before the security guard
had locked the door to our balcony.
Later that day I went to the ship?s
medical centre and had a delightful
conversation with the same doctor. At
the end of the conversation I asked if he
thought I had mental health problems
and was a suicide risk. He laughed and
said no, but added that a ?process had
been triggered?.
He had had to write a report of
our earlier meeting and he said it was
likely that my partner and I would be
?disembarked? from the ship at the first
port of call. However, in the light of this
meeting, he would write a second
report, rescinding the first one.
The next day I received a bill from
the medical centre for $485 and the
following day a letter from the captain,
saying we would be disembarked. I
emailed Holland America at its Seattle
base, outlining events, asking it to accept
my apology for my unfortunate remark
and to allow us to stay on the ship for
this holiday of a lifetime, for which we
had saved for a long time. I received a
standardised ?Thank you for your email.
Emails are dealt with in strict date order.
We will be in touch again? email.
We were left in a tiny port called
Haines. If Holland America was truly
concerned about my mental state,
I feel it was lacking in any duty of care
in ?dumping? us in this isolated place.
We finally managed to arrange for our
bank to make г3,000 available to us,
as we did not have sufficient funds to
get home. We travelled on by ferry to
a slightly larger port called Skagway
where we could access wi-fi and contact
British Airways about changing our
flight home from Vancouver.
We were unable to get a refund on the
BA tickets and, during the five days of
the cruise that we had missed, we
incurred expenses of about г2,000
for accommodation and air fares.
I wrote to Holland America the day
after we got home, setting out the story
again and providing a breakdown of our
additional expenses. I asked it to refund
the total г7,000 cost of the cruise and
our г2,000 additional expenses. I sent
the letter by recorded ?tracked?
delivery to Holland America in Seattle
and I know my letter arrived safely. I
have heard nothing.
Jill replies
The photographs of Haines on the
Visit Haines website are beautiful ? it
apparently borders 20m acres of
protected wilderness and the Disney
film White Fang was shot there in 1991.
But a small town with a population of
1,700 people and almost as many dogs
was not where you intended to spend
your holiday. You and your partner are
68 and 65 respectively, and you told me
that you found it scary to be deposited
in such a remote part of Alaska.
It is possible you misinterpreted the
actions of the crew members sorting out
your room, but this could have been
clarified had your complaint been
referred to a more senior manager.
Instead, your attempt at irony was lost in
translation ? and the staff overreacted.
Holland America?s terms and
conditions include a clause that allows
the cruise line or the master of the
ship to disembark a guest without
compensation for loss or expenses
incurred if the guest?s behaviour,
health or conduct is likely to endanger
themselves or other guests and crew.
Your description of the way you behaved
does not indicate ? to me at least ? that
you were a threat to anyone.
Holland America got in contact and
offered you a refund of г701 each to
cover the part of the cruise that
you missed. It said no additional
compensation would be offered for the
expenses you incurred.
At my suggestion, you asked your
GP to provide a letter I could send to
Holland America, stating that you have
never been prescribed anti-depressants
or suffered from suicidal tendencies. I
then pointed out to Holland America
that its staff ?s reaction to your
complaints had been extreme, if not
callous. If you had been suicidal, putting
HAVE
YOUR SAY
EDITED BY
RUTH EMERY
Mixed advice
If you can understand all
the examples in last week?s
article ?Is it worth paying for
financial advice??, you most
probably don?t need an
adviser. Right now, advisers
seemingly have the Midas
touch because just about any
investment will be streets
ahead of stuffing your cash in
a mattress or building society.
The problem is, an adviser
takes your cash irrespective
of performance. When a
stock market correction
eventually occurs, it will
be interesting to see how
they are judged.
DamienT, on
thesundaytimes.co.uk
I am 72 and have the time to
manage my financial affairs
and do my own research. I
have a self-select stocks and
shares Isa that generates
г25,000 a year of tax-free
dividends from companies
unlikely to go bust.
I would never pay a
financial adviser as they
would want me to have most
of my money in very safe
investments, which generate
income below inflation. They
would say companies are too
risky to invest in at my age.
CR, Camberley, Surrey
There are few arguments for
not seeking the advice of an
you ashore some 4,000 miles from
home was not the best way to ensure
your survival. I asked Holland America
to refund you for all the expenses you
incurred and provide compensation
for the distress and humiliation you
had suffered.
Holland America contacted you
to make a revised offer of г7,250,
equivalent to 75% of the holiday package
plus your expenses, which you have
accepted.
The cruise line also detailed the
security checks that crew go through
and pointed out that many are providing
for their families, and so have a powerful
incentive not to do anything that would
jeopardise their employment.
You still feel the cruise line could have
handled the situation better at the time,
both by letting you speak to a more
senior member of the crew and by
accepting your profuse apologies
for making an admittedly ill-judged
remark to the guest services employee.
Holland America said: ?The safety
of our guests is always our absolute
priority. We have taken this guest?s
complaints very seriously. We have
apologised to her and are very pleased
to have had her feedback on this matter.?
maturity date we might incur a penalty.
The only questions it asked were
whether we needed to give notice of
closure and if we wished to transfer
some or all of the maturing Isa. As these
were not notice accounts, we answered
?no? to the first question and ?all? to
the second.
We were horrified to learn from
Yorkshire the next day that we may well
have incurred a penalty from Halifax for
early closure as the transfer had been
effected within 24 hours. In the past,
whenever we have transferred Isas,
it has taken several days for the
transaction to be made and we had
incorrectly assumed that this would still
be the case as we had no knowledge of
the new rapid transfer system.
I called Halifax to explain the situation
but received no sympathy at all. It
confirmed that six months? interest
worth г503 had been deducted from the
final settlements. When I queried why it
did not have any mechanism for warning
customers that penalties would be
incurred for early closure, I was told that
this was all stated in the terms and
conditions, given to me when the Isas
were opened two years previously.
I then spoke to Yorkshire and asked
why it did not ask for the maturity dates
of the Isas. The building society said it
thought it had ? but that in any case I
should have answered ?yes? to the
question of whether notice was
required. This is patently incorrect, as
notice was not required. Yorkshire also
stated that had it been the holding
institution, it would have warned me
we might incur loss of interest by early
closure before making the transfer.
The Financial Conduct Authority
has an underlying tenet of treating
customers fairly ? and I do not consider
we have been fairly treated in this
instance. But Halifax remains adamant
that it is not liable for any recompense
and that it has acted within the terms of
the contract.
When you move savings,
timing is everything
My wife and I had cash Isas worth more
than г100,000 with Halifax, maturing
last October. As Halifax?s renewal rate
of 1% was not particularly competitive,
we decided to switch to another
provider, Yorkshire Building Society,
which was offering 1.25% for a fixed
term of 12 months.
We gave online instructions to
Yorkshire to take over the Isas on
September 28, 12 days before they
matured. Unfortunately, Yorkshire did
not mention in its online application
form that if we switched before the
independent financial adviser
(IFA) ? especially for people
like me, with a pretty
mainstream income and
finances. You?re never likely
to notice the charges as
they?re usually deducted at
source, and many people?s
ignorance of baffling financial
matters could be standing in
the way of a much-improved
retirement situation.
Adrian Bamford, on
thesundaytimes.co.uk
These guys charge high fees
for providing advice that can
be deduced pretty easily by
most switched-on people.
They suggest a 1% charge
is reasonable, yet this is
between 25% and 30% of
the current natural yield of a
UK portfolio. Therefore, IFA
clients must dig into their
capital or make higher-risk
investments to make up those
costs and obtain a reasonable
income from their portfolio.
David, on
thesundaytimes.co.uk
I keep in touch with the
economy, buy and sell shares,
spread bet and so on, and my
portfolio is doing well. I do
not need an IFA to tell me
the obvious ? that I should
pay off my debts, invest in
tax-efficient instruments and
top up my pensions.
Reverse Swing, on
thesundaytimes.co.uk
Pooch protection
A key part of pet insurance
is the third-party liability
cover for when Fido causes a
multi-vehicle pile-up while
retrieving his ball (?The dog?s
eaten its lead ? and mauled
my wallet?, December 24).
For dog owners, an
alternative is to join Dogs
Trust. For an annual
membership fee of г25
(г12.50 if you are over 60) you
Jill replies
Your letter provides a timely warning
for the many readers who will be
transferring their Isas before the end of
the tax year and at the start of the new
one. In the past transfers could take
weeks, if not months, to be processed,
so I?m not surprised you were caught
out by this transfer taking less than
24 hours.
You are particularly angry with
Halifax for failing to warn you that you
would lose interest. But I have seen the
letter that the bank sends to savers in
the run-up to the end of an Isa?s term.
This points out that you could face
charges if another provider requests
the transfer of funds before your Isa
account matures.
Maybe Halifax could have sent you an
email or letter to check that you really
wanted to close the accounts early, but
transfers are initiated by the bank or
society receiving the money and I felt
the wording used by Yorkshire Building
Society on its transfer form could have
pointed out the potential risks.
Yorkshire agreed. It has adjusted your
accounts to reimburse you for the г503
interest lost through Halifax?s early
closure penalty. It added: ?We have also
updated our e-Isa transfer form so
customers more clearly understand
what maturity date information we
need.?
CAN WE HELP YOU?
Please email Jill Insley at
questionofmoney@sunday-times.co.uk
or write to Question of Money,
The Sunday Times, 1 London Bridge
Street, London SE1 9GF.
Please send only copies of original
documents. Letters should be
exclusive to The Sunday Times. Advice
is offered without legal responsibility.
We regret Jill cannot reply to everyone
who contacts her.
same provider a few weeks
ago, to get a better interest
rate. I?m also keen to open
a stocks and shares Isa this
tax year. Am I allowed to
do this?
MD, Sheffield
P45
A financial adviser can help with budgeting, tax and pensions
get г1m third-party liability
insurance as well as a 24-hour
emergency helpline.
GP, Wadhurst, East Sussex
Meals on drones
I agree with Ian Cowie?s
suggestion that, in the
internet age, the problem of
not being at home when a
parcel arrives deserves a
hi-tech solution (?Amazon
and its Swedish pal have the
key to unlock huge returns?,
last week). I also agree that
delivery by drone is not going
to take off. The idea that the
book I order or even the
takeaway from down the road
will be delivered by drone is
just, well, pie in the sky.
ME, Bedingfield, Suffolk
A better legacy
While your piece on family
finances and inheritance tax
was accurate, it may have
painted an unduly pessimistic
picture for many readers as it
did not mention changes in
relation to main-residence
property (? ?Tis the season
to sort your finances?,
December 24).
Since April 6 last year,
there has been an additional
г100,000 nil-rate band when
a residence is passed on
death to a direct descendant.
This will increase in annual
increments to г175,000 in
2020-21, after which it will
rise in line with the consumer
prices index.
This will save my
daughters г40,000, and if I
get to April 6, 2019, then
inheritance tax will apply to a
very small sum, which will
reduce to zero on April 6,
2020. These changes mean I
do not feel it is worth taking
steps to minimise my liability,
whereas without them it
would be prudent.
PB, Sudbury, Suffolk
Ruth Emery replies: Yes. You
are allowed to open ? and
pay into ? one of each type
of Isa every tax year. So
you can start a cash Isa, a
stocks and shares Isa, an
innovative finance Isa and a
lifetime Isa in 2017-18.
You can then split the
annual allowance of г20,000
between all four accounts. If
you wanted to pay г5,000
into your Virgin Money Isa,
you could put up to г15,000
into your new stocks and
shares account.
Savers are allowed to have
lots of Isas, which they
accumulate over the years.
The golden rule, however, is
that you can open only one
of each kind of Isa every tax
year. So you will not be
allowed to set up another
cash Isa before April 5, but
you can open a stocks and
shares account.
We love to receive your
feedback on stories and
your views on any issues
you would like us to
investigate. Always
include your name and
address when contacting
us. Letters may be edited.
WRITE TO
Money, The Sunday Times
1 London Bridge Street
London SE1 9GF
One year, two Isas EMAIL
money@sundaytimes.co.uk
I have a cash Isa with Virgin
Money, which I opened
several years ago. I started
another cash Isa with the
TWITTER
@ST_Money
15
The Sunday Times January 7, 2018
MONEY
Best Buys
CURRENT ACCOUNTS
FOREIGN
CURRENCY
CREDIT INTEREST
Provider
Account name
Account fee
Interest rate 1
TSB
Classic Plus
None
3% + г10 a month 2 г1-г1,500
Balance
0345 975 8758
Contact
Halifax
Reward
None
г3 a month
г1+
0345 720 3040
Nationwide
FlexDirect
None
5% 3
г1-г2,500
0800 302010
These are the interbank
rates at 5pm on Friday,
which show where the
market is trading.
They are not indicative
of the rate you will be
able to get.
OVERDRAFTS *
Provider
Account name
Account fee
First Direct
1st Account
г10 a month 5 15.9%
M&S Bank
M&S Current Account None
Post Office Money Standard Account
Interest rate 4
None
0% overdraft limit Contact
г250
0800 242424
15.9%
г100
0345 900 0900
14.9%
г0
0345 266 8977
EURO
GBP>EUR
1.13
1.36
1.32
1.73
1 Based on funding of г1,000 a month. 2 To receive г10 you must have two direct debits and make 20 card payments a month. 3 Introductory rate for one year, then 1%. 4 Equivalent annual
rate. 5 Fee waived if minimum funding of г1,000 is met. * Based on overdraft of г500 for 15 days a month. Some accounts require minimum funding to open or receive rates shown.
Source: Moneyfacts.co.uk
AMERICA
GBP>USD
CREDIT CARDS
INTRODUCTORY RATES
Provider
Card type
Sainsbury?s Bank Purchase Mastercard
Halifax
30-Month Purchase Mastercard
Sainsbury?s Bank Dual Offer Mastercard
Introductory purchase
APR 1
Reward
Contact
0% for 31 months
18.9%
Yes
0808 540 5060
0% for 30 months
18.9%
No
0345 944 4555
0% for 30 months
18.9%
Yes
0808 540 5060
SWITZERLAND
GBP>CHF
BALANCE TRANSFERS
Provider
Card type
Introductory purchase Transfer fee 2
APR
Contact
Barclaycard
Platinum 38 Month Visa
0% for 38 months
1.4%
19.9%
0800 731 0200
MBNA
Platinum 38 Month Visa
0% for 38 months
1.44%
19.9%
0345 606 2062
Nuba
Transfer Mastercard
0% for 38 months
2.49%
19.9%
0345 606 2062
AUSTRALIA
GBP>AUD
3 г3 minimum.
CASHBACK CARDS
Provider
Card type
APR 1
Cashback
28.2%
1%-1.25%. Intro 5% for 3 months (up to г125) 0800 917 8047
American Express Platinum Cashback Everyday 22.9%
0.5%-1%. Intro 5% for 3 months (up to г100) 0800 917 8047
American Express Platinum Cashback
Santander
World Elite Mastercard
49.8%
Contact
0.5%
0800 389 9905
1 APR = annual percentage rate, dependent on credit rating. 2 Fee charged on the amount of each balance transfer during the introductory period.
Source: Moneyfacts.co.uk
Source: timescurrencyservices.co.uk
020 7294 7970
MORTGAGES
MONEY
MADE EASY
NEW RULES ON
ADVISERS? FEES
2-YEAR FIXED RATES
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
Santander
1.09%
Fixed to 31.3.20
35%
г1,499
RS
santander.co.uk
Sainsbury?s
1.39%
Fixed to 31.3.20
20%
г745
LV
0345 111 8010
Barclays
1.94%
Fixed to 31.1.20
10%
г999
LV
0333 202 7580
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
Nationwide
1.59%
Fixed for 3 years
40%
г999
GV
0800 302010
HSBC
1.64%
Fixed to 28.2.21
25%
г999
LV
0800 494999
Barclays
2.19%
Fixed to 31.4.21
10%
г999
LV
0333 202 7580
Deposit
Fee
Notes
Contact
Financial advisers and
fund managers will have
to provide more details
about their charges under
rules that came into force
last Wednesday.
3-YEAR FIXED RATES
LONG-TERM FIXED RATES
Lender
Rate
Scheme
Coventry
1.75%
Fixed to 31.3.23
35%
г999
LV
0800 121 8899
HSBC
1.99%
Fixed to 28.2.23
20%
г999
LV
0800 494999
Principality
2.55%
Fixed to 30.4.23
10%
г0
LV
0800 678 1000
First Direct
2.69%
Fixed for 10 years
25%
г0
LV
0800 482448
Deposit
What is changing?
The new rules, called
Mifid II, are part of a
European Union directive
that requires advisers to
state how much they
charge in percentage and
pounds and pence terms.
They will also have to
give annual updates about
their fees. Previously, an
adviser only had to say
how much a client would
be charged in percentage
terms ? and only when
they first signed up.
Also, advisers who
charge annual fees will
have to review the advice
they have provided every
year. Previously, they
could continue receiving
fees without providing
any service.
TRACKERS */ DISCOUNTS
Lender
Rate
Scheme
Fee
Notes
Contact
HSBC
1.24%
Tracker +0.74% for 2 years 40%
г999
ELV
0800 494999
Leek United
2.02%
SVR -3.42% for 2 years
10%
г199
EV
0845 219 0250
Nationwide
1.94%
Tracker +1.44% for 5 years 25%
г999
EGV
0800 302010
Hanley Economic
1.75%
SVR -3.44% for term
г950
ELV
01782 255000
25%
FIRST-TIME BUYER / LOW DEPOSIT
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
Yorkshire BS
3.39%
Fixed to 29.2.20
5%
г995
DP
0345 166 9510
Hanley Economic
3.1%
SVR -2.09% for 2 years
5%
г250
PV
01782 255 000
Barclays
2.69%
Fixed to 30.4.21
0%
г0
FP
0333 202 7580
BUY TO LET
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
Virgin Money
1.79%
Tracker +1.29% to 1.5.20
40%
г995
D
0345 605 0500
Barclays
1.84%
Fixed to 30.4.20
25%
г1,950
R
0333 202 7580
Leeds
2.19%
Fixed to 31.3.23
40%
г1,999
LV
0345 045 4049
Why is this important?
The Financial Conduct
Authority thinks many
investors do not
understand the long-term
impact of charges on their
investments. A fee of, say,
1%, may seem small, but it
eats into the value of a
pension pot over time.
You lose out on the returns
that money could have
produced had it been
invested.
Early repayment charge applies unless otherwise stated. * Most deals track Bank of England base rate. Notes: SVR = Standard variable rate;
D = г500 cashback; E = No early repayment charge; F = Family Springboard, 10% deposit must be in a Barclays Helpful Start account;
G = г500 cashback for first-time buyers and remortgages; L = Free legal work for remortgages; Help P = Purchases only; R = Free valuation and
legal work for remortgages; S = Remortgage only; V = Free valuation.
Source: landc.co.uk ? 0800 373 300
SAVINGS ACCOUNTS
INSTANT ACCESS
Provider
Account name
Min deposit
Interest rate
Contact
AA 1
Easy Saver Issue 6
г100
1.32%
theaa.com
Post Office Money 2
Online Saver Issue 28
г1
1.3%
postoffice.co.uk
RCI Bank*
Freedom Account
г100
1.3%
rcibank.co.uk
1 Rate includes 1.12% bonus for first 12 months. 2 Rate includes 1.05% bonus for first 12 months.
NOTICE ACCOUNTS
CASH ISAS
INSTANT ACCESS
Provider
Account name
Min deposit Interest Transfers in Contact
AA 1
Easy Access Issue 14
г100
1.16%
Yes
theaa.com
Sainsbury?s Bank
Cash Isa
г500
1.15%
Yes
sainsburysbank.co.uk
What about fund
managers?
They will be required to
highlight trading costs
separately rather than as
part of the overall
performance of a fund.
1 Rate includes 0.96% bonus for first 12 months.
Provider
Account name
Notice period
Min deposit
Interest rate
Contact
FIXED RATE
Secure Trust Bank 1
180-day
180 days
г1,000
1.65%
securetrustbank.com
Provider
Secure Trust Bank 1
120-day
120 days
г1,000
1.55%
securetrustbank.com
Post Office Money 1 Year Fixed Rate Issue 11
Bank and Clients
90-day
90 days
г1,000
1.45%
bankandclients.com
West Brom BS
1 Maximum three capital withdrawals a year subject to required notice.
Account name
Fixed Rate Isa
Term
Min deposit Rate
1 year
г500
1.45% Yes
Transfers in Contact
postoffice.co.uk
2 years
г1,000
1.65% Yes
westbrom.co.uk
Source: Savingschampion.co.uk ? 0808 178 5354
Aren?t we leaving the EU?
Yes, but in the meantime
UK firms must still comply
with EU regulations.
FIXED-RATE BONDS
Provider
Account name
Term
Min deposit
Interest rate
Contact
Investec Bank
Fixed Term Deposit
1 year
г25,000
1.8%
investec.com
Paragon Bank
Fixed Rate Savings Account
2 years
г1,000
2.05%
paragonbank.co.uk
Access Bank UK
Fixed Rate Bond
3 years
г5,000
2.25%
sensiblesavings.co.uk
DEALS ARE LISTED ONLY IF THEY ARE COVERED BY THE UK FINANCIAL SERVICES COMPENSATION SCHEME (FSCS) OR A EUROPEAN EQUIVALENT
Source: Savingschampion.co.uk ? 0808 178 5354
CHILDREN?S ACCOUNTS
Provider
Account name
Account type
Min deposit
Interest rate
Contact
Halifax
Kids? Regular Saver
Regular Saver
г10-г100
4.5%
halifax.co.uk
Santander 1
123 Mini Current Account
Current Account
г300
1%-2.96%
santander.co.uk
Cambridge
3-year Fixed Rate Bond (Issue 1) Fixed Rate Bond
г1,000
2%
cambridgebs.co.uk
1 Interest rates are tiered: 1% on balances of г100-г199; 1.98% on г200-г299; 2.96% on г300-г2,000.
ENERGY DEALS
Table shows the cheapest tariff from the 3 cheapest
suppliers.Excludes
suppliers.
Excludesfixed
fixedtariffs
tariffsof
ofless
lessthan
than12
12
months? duration. Excludes tariffs that do not have
national coverage. Excludes tariffs where payments
are taken in advance of the customer coming on
supply. F=Fixed rates V=Variable rates
Average annual bill
Rate
Contact
Provider
Account name
Min deposit
Interest rate
Rate
Contact
Together Energy
г832
F
0333 150 1699
Coventry
Junior Cash Isa
г1
3.5%
V
coventrybuildingsociety.co.uk
Tonik
г842
F
0333 344 2686
Nationwide
Smart Junior Isa
г1
3.25%
V
nationwide.co.uk
Bulb
г855
V
0300 303 0635
Tesco Bank
Junior Cash Isa
г1
3.15%
V
tescobank.com
Source: TheEnergyShop.com ? 01259 220 270
V = variable rate. Source: Savingschampion.co.uk ? 0808 178 5354
Grandpa, what will you do with the golden ticket?
Ruth Emery looks
at the options
for those lucky
savers who have
pensioner bonds
about to mature
Almost 500,000 savers must
decide what to do with their
pensioner bonds this month,
as the massively popular
three-year product from
National Savings &
Investments starts to mature.
On January 15, 2015, NS&I
launched its 65+ Guaranteed
Growth Bond, available in
one and three-year versions.
As the name suggests, only
people aged 65 and over
were eligible.
The bonds ? unveiled by
the then chancellor George
Osborne as a sweetener for
pensioners fed up with low
savings rates ? paid 2.8% to
those investing for 12 months
and 4% annually to those
with three-year accounts.
Savers were so desperate
to open the high-interest
bonds, they sold at a rate
of about г500,000 a minute
in the first two days.
A total of 441,000
customers invested г4.4bn
in the three-year version
in January 2015. A further
444,000 savers put in
г4.5bn over the following
months. In May 2015, the
bonds were withdrawn
from sale.
Now NS&I is writing to
customers whose three-year
accounts are about to mature
? the letters should arrive
about 30 days before the
account anniversary.
at least г750 and pay at least
three direct debits each
month.
See the tables above for
more Best Buy savings and
current accounts.
?Someone who invested
the maximum г10,000 in
January 2015 for three years
will now be looking at a
healthy lump sum of around
г11,162 ? so choosing what to
do with it is a big decision,?
said Charlie Musson from
the online investment
platform AJ Bell.
However, be warned: a
risk-free 4% interest rate is a
thing of the past. Those with
money to reinvest from their
bonds will have to accept
much lower rates now, or
take on additional risk to
boost returns.
Here are your options.
Do nothing ? and have
your money reinvested
If you fail to respond by the
account anniversary, your
money will automatically be
reinvested in a three-year
NS&I Guaranteed Growth
Bond.
This pays a more modest
2.2%, but is still one of the
best deals on the market right
now. Only two providers
pay more for a three-year
bond: Access Bank UK
(2.25%) and Charter Savings
Bank (2.21%).
Both are covered
by the Financial Services
Compensation Scheme,
which pays up to г85,000
per saver if banks go out of
business, easily covering
the proceeds you will be
reinvesting from the
pensioner bond.
You may feel that switching
from NS&I is not worth the
effort, though. If you had the
full г10,000 in your bond,
you would earn just г17
extra over three years by
moving the cash to Access
Bank UK.
Grandpa Joe and Charlie are about to get a windfall . . .
Get a savings bond
You could stay with NS&I
but change to a one, two or
five-year Guaranteed Growth
Bond, although the interest
on these is not so competitive.
Over one year the rate is
1.5%, for two years it is 1.7%
and for five it is 2.25%.
According to the comparison
site Savings Champion, the
best one-year rate for a saver
with about г10,000 to invest
is 1.78% (from Post Office
Money), for two years it is
2.05% (from Paragon and
Access Bank UK) and for five
years it is 2.5% (Paragon).
In this case, you would
be better off filling in the
paperwork and investing
your proceeds elsewhere.
Opt for easy access
If you want instant access
to your money ? perhaps
because you think the Bank of
England may raise rates this
year and you would rather
wait until higher-interest
bonds are available ? the
best savings rate is 1.32%,
offered by the AA.
Also look at current
accounts. Nationwide pays
5% interest for a year on
balances up to г2,500 in its
FlexDirect account. There is
no monthly fee, but you must
pay in at least г1,000 a month
to qualify for the 5% rate.
Tesco Bank?s current
account pays 3% on balances
up to г3,000. Again, there is
no fee, but you must put in
Buy Premium Bonds
One Money reader invested
г10,000 in the pensioner
bond ? and is disappointed
by the interest rates on offer
today. ?I am in my early
eighties and need instant
access for any future
investments. My gut feeling
is to buy more Premium
Bonds,? she said.
?I currently have г4,000
worth. At least the existing
holding produces small
prizes of г25, around five
or six per annum, has
almost immediate access
and is safe.?
The maximum you can
hold in Premium Bonds is
г50,000. There are two г1m
jackpots every month and
thousands of other prizes
from г25 to г100,000. The
bonds can be cashed in at
any time.
The odds of winning a
prize for each г1 Premium
Bond is 24,500-1. NS&I,
which administers the
bonds, calculates that the
annual prize fund interest
rate is 1.4% ? although some
customers never win
anything.
?The prizes are tax-free,
which is particularly
advantageous to higher-rate
taxpayers, but it?s important
to bear in mind there?s no
guarantee of a win, so the
money could easily lose value
after inflation,? said Sarah
Coles, personal finance
analyst at the wealth manager
Hargreaves Lansdown.
Invest in the stock market
Today?s savings rates are
negative in real terms when
you factor in the current
inflation rate of 3.1%.
To achieve the same return
as your pensioner bond, look
elsewhere ? perhaps at funds
that include exposure to
corporate bonds or to stock
markets, although bear in
mind that your capital will be
at risk. Buy through a stocks
and shares Isa to ensure
returns are tax-free.
Bonds are traditionally
the lowest-risk investment.
Jason Hollands at the
financial planning firm
Tilney recommends the
TwentyFour Dynamic Bond
and Janus Henderson
Strategic Bond funds.
Musson at AJ Bell said: ?If
you are concerned about
stock market volatility or
prefer a relatively cautious
approach, you could consider
a fund such as Janus
Henderson UK Absolute
Return, which can profit from
falling as well as rising share
prices. The fund has grown
by almost 40% over the past
five years.?
For those who want a
regular income, Hollands
tips the Invesco Perpetual
Global Targeted Income fund,
while Musson recommends
Artemis Income.
Musson added: ?The
FTSE 100 is due to yield 4.3%
in 2018, which beats any
savings rate ? and that
doesn?t take into account the
potential for capital growth.
?However, stock market
investing entails more risk,
so it is important to be clear
on how much risk you are
prepared to accept at the
outset.?
ICONS BY JAMIE JONES
JUNIOR ISAS
Supplier
Top tip
You cannot do much
about the vagaries of the
stock market, but a sure
way to boost returns is to
cut the fees you pay.
Challenge your financial
adviser to tot up all the
fees you have paid since
you started receiving
advice. If you feel the
charges are not justified,
move elsewhere.
Ali Hussain
Cash Isas fall out of favour
after savings tax break
Ali Hussain
Cash Isas have become
increasingly unattractive
for savers as the interest paid
on them compared with
standard saving accounts has
fallen sharply over the past
two years, according to the
data firm Moneyfacts.
The drop in rates has
coincided with the launch
of the personal savings
allowance in April 2016. This
allows individuals to earn up
to г1,000 a year from cash
held outside an Isa without
paying tax.
It?s clear to
see the Isa
market is
in dire need
of a boost
However, rather than
increase Isa rates to attract
customers, banks and
building societies have made
them less attractive than
non-Isa equivalents.
In April 2016, the average
return on a one year fixedrate Isa was 1.31% ? the same
as the average return on an
equivalent non-Isa product.
Today, the average
non-Isa account pays 1.18%,
compared with 1.09% for the
equivalent Isa.
The top easy-access Isa
rate, from Post Office Money,
pays 1.15%. However, its
non-Isa equivalent pays 1.3%.
The best easy-access Isa from
the AA pays 1.06%, but its
non-Isa savers can earn up
to 1.32%.
?The desire for cash Isas
is appearing to die out,?
said Rachel Springall of
Moneyfacts. ?It?s clear to see
the Isa market is in dire need
of a boost.?
The savings allowance
gives every basic-rate
taxpayer the ability to earn
г1,000 interest a year from
cash without paying tax. This
falls to г500 for those paying
40% income tax. Additionalrate taxpayers do not benefit.
To earn г1,000 from a
top-paying easy-access
account you would need to
have about г76,000 saved.
You can salt away up to
г20,000 a year in a tax-free
Isa ? in cash, shares or a
combination of the two.
Savers added г39.2bn to
cash Isas in the 12 months
after the savings allowance
was introduced ? down from
г58.7bn the year before.
By contrast, investment in
stocks and shares Isas rose
over the same period from
г21.1bn in the 2015-16 tax year
to г22.3bn the following year.
If you are saving for the
short term ? five years or less,
say ? it is still worth building
up your Isa allowance with
cash, according to Patrick
Connolly of the adviser Chase
de Vere. This is because any
unused allowance is lost at
the end of the tax year.
?While interest from a cash
Isa is likely to remain tax-free,
this might not be the case
with the savings allowance
under a future government,?
said Connolly.
16
The Sunday Times January 7, 2018
Puzzles
FEEDBACK
Comments about our puzzles
can be sent to puzzle.feedback@
sunday-times.co.uk or Puzzles
Editor, The Sunday Times,
1 London Bridge Street,
London SE1 9GF
GENERAL KNOWLEDGE JUMBO CROSSWORD 91
1
2
3
4
5
6
7
Across
8
9
10
11
12
13
14
16
15
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
33
34
37
38
32
35
36
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
1
Solution to 90
Across: 1 Bohemia, 5 Pesach, 8 Mastodon, 14 Coral, 15 Cinzano, 16 Inscience, 17 The Spiderwick Chronicles, 19 Headwind, 20 The Thief, 22 Moola, 25 Writer?s cramp,
26 Dicksonia, 28 Togo, 29 Limn, 30 South Downs Way, 33 Radamel Falcao, 35 Sofa, 36 Deal, 39 Headreach, 41 Stradivarius, 43 Droll, 44 Pedicure, 45 Attached, 48 Captain
Corelli?s Mandolin, 50 Acid House, 52 Guarani, 53 Emmet, 54 The Trial, 55 Intake, 56 Goshawk
Down: 1 Bycatch, 2 Horse racing, 3 Milk powder, 4 Accidents Will Happen, 5 Penury, 6 Swami, 7 Crockett, 9 Ass, 10 This Is My Song, 11 Don?t Look Now, 12 Neeps, 13 High
wind, 18 Office of Fair Trading, 21 Homesick, 23 Amaryllis, 24 Urania, 25 Watershed, 27 Eurostar, 31 Hussar, 32 Omar al-Bashir, 34 Diamorphine, 37 Epithalamia, 38 San
Andreas, 40 Hydrogen, 42 Schengen, 46 Donetsk, 47 Estate, 48 Coast, 49 Lhasa, 51 Uva
2
3
1
2
3
4
5
Across
6
7
8
9
10
11
12
13
14
15
Down
1 Curriculum (8)
8 Charmingly
old-fashioned (6)
9 Brawl (6)
10 Co-operation (8)
12 Influence (4)
13 See (10)
16 Discarded (10)
17 Destroy (4)
18 Pastilles (8)
21 Novice (6)
22 Little finger (6)
23 Remove hair (8)
2
3
4
5
6
7
11
14
15
16
19
20
Skullcap (8)
Dull (10)
Worst (4)
Military unit (8)
Outdoor swimming
pool (4)
Delighted (6)
Exit (10)
Meant (8)
Believer in nothing (8)
Old banger (6)
Clownish (4)
Bargain (4)
16
17
18
19
Solution to 1554
Across: 1 Dirk, 3 Hallmark, 9 Subsume, 10 Cycle, 11 Responsible, 13 Equity, 15 Rattle,
17 Wherewithal, 20 Lanai, 21 Minaret, 22 Obsolete, 23 Bevy
Down: 1 Discreet, 2 Rebus, 4 Averse, 5 Lucubrations, 6 Ancient, 7 Keep, 8 Run-ofthe-mill, 12 Zealotry, 14 Unwinds, 16 Pelmet, 18 Horde, 19 Also
22
23
x4
CELL BLOCKS
+8
50% OF
IT
? 12 ў 4
DOUBLE
IT
+ 24
+ 30%
OF IT
+3/5
+4
MEDIUM
48 DOUBLE
IT
x3
HARDER
16 SQUARE
IT
+ 14 +1/3
OF IT
OF IT
DOUBLE
IT
x3
ў6
50% OF
IT
- 15% DOUBLE
OF IT
IT
ў9
?2
? 30 + 120
-2
- 1/3
OF IT
ANSWER ANSWER ANSWER
BRAIN TRAINER
22
8
9
10
11
12
14
19
21
23
25
28
29
32
33
34
35
36
38
41
43
45
46
49
51
Which party leader left
his wife for the topless
model Jo Marney, 25,
pictured?
What happened in the UK
? at the Highland Wildlife
Park in Scotland ? for the
first time since 1992?
When is Divorce Day,
when lawyers expect a
4
5
6
The skill of Bradman and Hutton (11)
A child aged about 12 (7)
A wide-mouthed pitcher (4)
A woman with a fine prospect of happiness behind her (5)
Unable to leave (8)
Area of land with multiple buildings built for the same
purpose (6)
Phenomenon discovered in 1827 by observation of pollen
grains in water (8,6)
Device for retarding a vehicle?s motion (4,5)
Livid (6,3,3,6)
About four months pregnant (7)
A communications innovation first used in the UK in
Norwich (1959) and Croydon (1967) (6,4)
Something used to enhance the fit or comfort of a shoe (5,4)
Something serial used by Bach, Beethoven and Brahms,
but not Satie, Scarlatti and Sibelius (13,5)
To dine (7)
Edson Arantes do Nascimento (4)
Captured by means of force (7)
Today, in Germany (7)
1967 film about partners in crime (6,3,5)
?When it is ____, ye say, It will be fair weather: for the sky is
red? (St Matthew) (7)
Cooker component in black, white and red (7,3)
Desire and expectation rolled into one (4)
With affection for the past (9)
A malefactor who atones for making your writing nonsense
by permitting the compositor to make it unintelligible (11)
The patriotic art of lying for one?s country (9)
The summit of Mount ____ (pictured) is the highest point in
the Malay archipelago (8)
Long-haired toy dog breed (4-3)
Distance(s) most often used in connection with golf and
American football (7)
To represent (someone) (3,3)
A shackle for the free (5)
The river Lucy Honeychurch
wanted to see from her room
at the Pension Bertolini (4)
spike in couples who?ve
had enough over the
festive season and are
calling it quits?
What connects Ann
Widdecombe, Amanda
Barrie and John Barnes?
Which football pundit
found himself in a wee bit
of trouble with the police?
Which job did a South
Korean court say should
be restricted to the blind?
How many people were
killed in jet airline
accidents in 2017?
8 Which tourist attraction
will be limited to 40,000
domestic visitors per day?
9 Which tobacco giant
announced it would be
giving up cigarettes for
the new year?
10 What were guests not
allowed to do at the Snap
Inc New Year?s Eve party?
7
MARK MY
WORDS 89
Readers are invited to guess
what was said last week when
Theresa May was given a
tour of Frimley Park Hospital,
near Guildford, by its chief
executive, Sir Andrew Morris.
See below right for how to
enter.
Send your entries to: puzzle.entries@
sunday-times.co.uk by no later than
Tuesday. Entries should include a postal
address and ?Mark My Words 89? in the
subject line of the email. The best entry as
judged by The Sunday Times will win The
Chambers Dictionary of Great Quotations.
Last week?s winning caption,
for this picture of swimmers
preparing for a Christmas Day
dip, was: ?Wait, David, what
do you mean you haven?t
done an impact assessment??
It was suggested by Oli
Grant of London SW2.
Terms and conditions: Competition closes at midnight on Tuesday.
Over 18, residents of the UK and ROI only. One entry per person. The
winner will be the best entry as judged by The Sunday Times. No cash
alternative to prize in whole or in part. Prize is non-transferable. Your
information will only be used for the purposes of this competition.
Promoter is Times Newspapers Ltd. Not open to staff of the Promoter
and promotional partner or their families.
20
21
EASY
1
2
3
4
5
7
NEWS QUIZ
56
CONCISE CROSSWORD 1555
Down
1 A cake and (in translation) a viceroy of India were named
after this German town (10)
6 Howard ____ was the first person to referee the Champions
League and World Cup finals in the same year (4)
9 To lie about another. To tell the truth about another (6)
13 Clues in italics are from this 1911 book by American satirist
Ambrose Bierce (3,6,10)
15 Google ____ is a video chat mobile app (3)
16 Belonging to me if I can hold it or seize it (4)
17 The ?____ shark? is a roof sculpture in an Oxford suburb (10)
18 A place of retirement for women who wish for leisure to
meditate upon the vice of idleness (7)
20 Girl from the ____ is a Bob Dylan song influenced by
Scarborough Fair (5,7)
22 Relating to claimed events without scientific explanation (10)
24 Informally in the US, to discuss in detail or at length (4,4)
26 A person who talks when you wish him to listen (4)
27 Robert Peel?s Tamworth ____ of 1834 promised a review of
civil and ecclesiastical institutions (9)
30 ____?s picture of the wedding at Cana is the largest painting
on canvas in the Louvre (5,8)
31 ____ was a 2001-4 Radio 4 sitcom about a hormonal wife (3,6)
33 To ____ the wash is to be revealed at last or turn out well (4,3,2)
34 To be 5D, in informal American usage (4,4,3,2)
37 Sunday Times journalist (pictured) with strong views (3,6)
39 The 51D flows through ____ just before it reaches the sea (4)
40 A blackwater tributary joining the Amazon at Manaus (3,5)
42 Cream cheese used in making tiramisu (10)
44 Drawing attention to something to gain advantage (6,4,2)
47 (Latin) What good would that do me? (3,4)
48 Bad handwriting or spelling, as any fule kno (10)
50 A tall vegetable intended by nature to serve as a penal
apparatus (4)
52 Extravagant (3)
53 Jeanne Moreau and Paulette
Goddard played Cщlestine in
film versions of this 1900 novel
by Octave Mirbeau (5,2,1,11)
54 James ____ was primary editor
of the Oxford English
Dictionary from 1879 to 1915 (6)
55 Unbleached linen or its colour (4)
56 The man who proclaims with a
hammer that he has picked a
pocket with his tongue (10)
Just follow the instructions from left to right, starting with the
number given to reach an answer at the end
10
4
2
4
3
2
4
2
2
8
2
4
Divide the grid into blocks.
Each block must be square or
rectangular and must contain
the number of cells indicated
by the number inside it.
2
TETONOR
MODERATE
Each number in the main grid
can be formed by adding or
multiplying a pair of numbers
in the strip below the grid.
Each pair of numbers should
be used twice: once as part of
an addition and once as part
of a multiplication. For
example, a 10 and 24 in the
main grid may be solved by
the sums, 4 + 6 and 4 x 6,
respectively. Enter each sum
in the boxes below its answer.
Any blanks in the strip must
be deduced, bearing in mind
the numbers are listed in
ascending order.
2
17
90
30
22
28
19
42
13
72
42
17
171
120
23
70
23
5 5
7
9 10
14
19
POLYGON
From these letters, make
words of four or more letters,
always including the central
letter. Answers must be in the
Concise Oxford Dictionary,
excluding capitalised words,
plurals, conjugated verbs
(past tense etc), adverbs
ending in LY, comparatives
and superlatives.
How you rate
21 words, average; 28, good;
36, very good; 44, excellent.
EVENT
Cryptic crossword workshop
A n e xc l u s i ve o p p o r t u n i t y fo r s u b s c r i b e r s
Join us on Saturday, February 3 in York for a workshop with Tim Moorey, crossword
setter for The Times and The Sunday Times. Guests will learn insider tips for mastering
the Quick Cryptic Crossword and receive a copy of his book How to Crack Cryptic Crosswords.
Book tickets now at mytimesplus.co.uk
This Times+ event is open to UK subscribers only. For full terms and conditions, visit mytimesplus.co.uk
17
The Sunday Times January 7, 2018
MEPHISTO 2993
1
2
3
4
10
Across
Tim Moorey
5
6
7
8
1 Union money?s invested
in a fine city, ultimately
like Cologne (7)
7 An Indian measure is
expensive, no end of
loot (4)
10 Pros back for snub in
Edinburgh (5)
11 Amphibian awfully lax
catching nothing by
chance (7)
12 Radiation measurement
test follows three notes (9)
13 Pieces for one only
heard (4)
16 Inquire?! (6)
17 Odd fish in dam as
before (6)
18 Social security payment,
initially no charge (5)
19 One politician leaving
Mexican port is a Central
American (4)
21 Old impostor useless
when speaking (4)
22 Will?s affair in California
upset Sue (5)
23 Might once used by
Maurice on violent thug (6)
25 Greek character longs to
get Playboy pics? (6)
27 Incomplete school pack (4)
29 Question with difficulty
maids in S American
trees (9)
30 Scots own guards weak in
battle (7)
31 Unruly youngster tearing
around certainly puffed (5)
32 Friendly relations leaving
area infested with
insects (4)
33 One wouldn?t laugh at
engaging upper-class girl,
for instance (7)
9
11
12
13
14
16
17
15
18
21
23
19
20
22
24
25
26
27
28
29
30
31
32
NAME
33
...................................................................................
ADDRESS ...................................................................................
...................................................................................
Post your solution to The Sunday Times Mephisto 2993,
PO Box 29, Colchester, Essex CO2 8GZ, or email
puzzle.entries@sunday-times.co.uk. The first correct solution
picked at random after next Saturday wins Whitaker?s Concise,
worth г25. Four runners-up will each receive г20. The Chambers
Dictionary 13th edition is the primary reference. Readers are
invited to visit Tim Moorey?s website at timmoorey.info
Solution to 2991: Across: 1 Cloze, 5 Hangars, 11 Advice, 12 Eat
up, 13 Sparrier, 14 Sprout, 15 Dongle, 16 Taffia, 18 Uniformities,
20 Suspiciously, 26 Cantos, 28 Trochi, 29 Irrupt, 30 Not to say,
31 All in, 32 No-ball, 33 Slyness, 34 Geese Down: 1 Caestus, 2 Ldopa, 3 Overfish, 4 Zip-off, 5 Heptarchists, 6 Academicians,
7 Neroli, 8 Garnet, 9 Ruelle, 10 Spree, 17 Fistulae, 19 Systyle,
21 Uproll, 22 Pectin, 23 IPhone, 24 Unrobe, 25 Etnas, 27 Opals
Solution to 2992: Across: 4 Scarpines, 11 Haut, 12 Ague-cake, 13 Arab, 14 Orra,
16 Sartorius, 17 Anoa, 18 Sansa, 19 Right whale, 22 Proseltes, 26 Leear, 27 Naos,
30 Stornello, 31 Moch, 32 Blag, 33 Acervate, 34 Sate, 35 Sonnetary Down: 1 Chaser,
2 Carabinero, 3 Tuareg, 5 Caxon, 6 Aggro, 7 Rupiah, 8 Perusal, 9 Narine, 10 Seanad,
15 Rostellate, 20 Tortive, 21 Llamas, 22 Percen, 23 Sno-cat, 24 Tellar, 25 Stogey,
28 Arita, 29 Oncer
SUDOKU
CHESS
Down
WARM-UP
1 Relative pressure shown
up in letters from
abroad (4)
2 Ring dated chaps on land
wanting introductions (7)
3 Rather fat seaman in
launch (9)
4 Type of algae, great deal
loaded by porter in
America (12)
5 School teams value
degree (9)
6 Echo remark initially
about part of Koran? It?s
well-proportioned (12)
7 Fly on after Cuba (4)
8 Preposterous game ? it?s a
fiddle (5)
9 Fox is only half-seen
before reaching highstreet store (8)
14 Poet's faint with piercing
alarm signal (9)
15 Endless rubbish, it?s also
known as Buddhist
literature (9)
16 Turkish officer?s question
and answer followed by
another boring mosque
leader (8)
20 Natives mostly boasted
sole supply (7)
24 Windows foremost in
operating computers,
usually Chinese units (5)
26 See about top of mountain
covered by trees (4)
28 Black lead in tawdry play
forgetting lines (4)
CROSSWORD 4780
David Howell
The World Rapid and Blitz
Championships took place
over the final days of 2017 in
Riyadh, Saudi Arabia. The
marathon event and its
generous prize fund attracted
the majority of the world?s
top talent. Indeed, the field
was so strong that I found
myself paired against higherranked opposition in almost
every round.
In the Rapid part of the
event, Viswanathan Anand
won gold after a sparkling
performance which proved
that age is truly no hindrance
in chess ? even at quicker
time controls. In the blitz
section, however, it was
Magnus Carlsen who stormed
to victory.
In a tournament full of
surprises, blunders, and
spectacular moves, it was the
following game featuring the
15-year-old Andrei Esipenko
which really stood out.
White: Sergei Karjakin
Black: Andrei Esipenko
World Rapid Championship,
Riyadh
2017
________
с Dk4 g 4]
р0pDnDp0p]
▀ 1nDpD D]
▐D 0 ) DN]
▌ D 0Q) D]
▄D DPD DP]
█P)PG DPD]
┌DKDRDBDR]
┴┬├─┼╞╟╚
15?c4! Black sacrifices a
pawn. In return, his pieces
will swarm towards the
white king. 16 dxc4 Ba3 17
Bc1 17 b3 Nc5 18 Qf3 d3 is
fatal. 17?Nc5 18 Qf3 d3!
Cutting the white queen out
of the game. 19 cxd3 Na4
20 Rd2 Nd4 21 Qf2 Nc3+
22 Ka1 Qb3!! One of the
most picturesque moves
that one can ever hope to
play. The tactics all work in
Black?s favour. 23 bxc3 23
axb3 Nxb3 is checkmate.
23?Qxc3+ 24 Bb2 Bxb2+
25 Rxb2 Qc1+ 26 Rb1 Nc2+
Now White is forced to part
with his queen, but this only
delays the inevitable. 27
Qxc2 Qxc2 28 g3 b5
Esipenko is relentless to the
end. Black opens lines for
the final attack. 29 cxb5
Rd4 White resigns
1
2
1
3 5 8
3
8
Hard
6
3 1
7
5
5 8 4
26
4
23
22
8
26
9
16
21
5
10
13
8
10
10
24
15
9
13
13
12
22
21
18
21
10
21
22
M
26
10
26
17
17
2
21
26
10
7
13
13
14
10
13
3
9
13
4
17
21
5
14
22
19
21
10
25
19
2
4
4
2
5
1
6
BRIDGE
13
1
1
4
2
2
25
6
22
4
14
Today?s deal turned up in an
online practice session.
3
Both vulnerable, Dealer West
/
.
v
,
19
13
10
24
6
/
.
v
,
10
21
2
15
G
26
24
1
26
13
14
26
4
6
5
13
/
.
v
,
21
3
14
6
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
1
2
14
15
G
3
4
5
6
7
8
9
16
17
18
19
20
21
22
KENKEN
M
10
11
12
13
23
24
25
26
Q9532
J 10 7
A
KQ84
874
4
K J 10 9 8 5 3 W
A6
19
20
5
Sally Brock
5
2
4
3
11
6
5
13
26
21
22
N
S
/
.
E v
,
K J 10
86532
Q2
10 5 3
A6
AKQ9
764
J972
West opened the bidding with
three diamonds. The first
decision was whether or not
North should bid. I agree with
the decision to pass. There are
several reasons for this: (1) it is
very minimum, (2) partner
might respond in a four-card
suit when spades would play
better, (3) the 4 points in
diamonds would be better in a
different suit.
The next decision was what
South should bid in the pass-
...................................................................................
Across
KILLER SUDOKU EASY
16
3
9
8
9
11
9
6
22
7
17
23
CODEWORD
7
18
13
3
22
12
14
11
3
16
12
4
7
13
8
14
10
8
8
UN J U S
P
I
E
K I N Q
E
G U
E VOK E
P
S
F AN T
M E
C AMBR
A
E
BU T T E
L
E
Y
E ARN E
S
North
East
1.
Pass
Pass
1/
2NT
Solution to 4778: Across: 1 Misprinted, 7 Peace on earth, 13 Escort, 14 Prosaic,
15 Fenestra, 16 Ravenousness, 17 Iceni, 18 Reap, 19 Revisits, 21 Arsenal, 22 Dollop,
23 Yours truly, 26 Christmas Day, 28 Xerxes, 29 Able-bodied seamen, 33 Medical
examiners, 35 No dice, 37 Apparentness, 40 Pay-per-view, 41 Sleigh, 43 Batgirl,
45 Sparsely, 47 Asia, 48 Unlit, 49 With one voice, 51 Nihilist, 52 Heroism, 53 Viagra,
54 Deteriorates, 55 Honesty bar Down: 2 Instate, 3 Progenitrix, 4 Intro, 5 Typists,
6 Dromedary, 7 Praises, 8 Auction bridge, 9 Enfeebles, 10 Nannied, 11 Australasia,
12 Tarragona, 20 Intestate, 24 Obese, 25 Usage, 26 Cabbies, 27 Mesentera,
30 Leave it at that, 31 Essay, 32 Emcee, 34 Imaginative, 36 Divisionary, 38 Palestine,
39 Tabulator, 40 Pilot fish, 42 Houdini, 44 Inwards, 45 Snowman, 46 Lacerta, 50 Elves
CLUE WRITING CONTEST 1690: LIMESCALE
Readers are invited to compose a clue for the word above.
Clues must be original, cryptic, and similar to those in the
Sunday Times crossword. Send your entry by email to
puzzle.entries@sunday-times.co.uk. The best entry selected
after next Saturday wins г20.
Winner 1687: Steve Randall, Reading
Jarlsberg: Vessel?s stopped by large mass of ice, there are holes in it
For a full report, visit thesundaytimes.co.uk/cluewriting
Winners Crossword 4777 H Westley, Chesham, Buckinghamshire, N Ball,
Plymouth, Devon, W Peat, Grantham, Lincolnshire, O Richards, Bristol Mephisto
2990 B Turner, Yeadon, West Yorkshire, N Evans, Altrincham, Greater Manchester,
RC Flett, Bearsden, East Dunbartonshire, J Randle, Lymm, Cheshire, J Spragg,
Oxford Teaser 2882 M Dragicevic, Huddersfield, West Yorkshire, B Scott, St Columb
Major, Cornwall Chess 1093 P Skelly, Bedford Sudoku December 17 R Badham,
Southampton, Hampshire
TODAY?S SOLUTIONS
NEWS QUIZ
/
.
v
,
K 10 9 3
A5
743
A543
South
Pass
2.
4/
BRAIN TRAINER
Pass
Pass
All Pass
POLYGON
Plan the play on the king of
clubs lead.
Solution next week.
N AU S E A
M S
T
U
U I CK S AND
C
M
I
R E A L I S T
O
X
N
A S T I C A L
E
O
S
I C MU S I C
O
A W H
RNU T
I C E
D
I
P M
R
E C Z EMA
TETONOR
T
26
KENKEN
245
66
13
SPOT THE MOVE 1094
Moving the pinned knight with 1?
Nxd7! wins material. If 2 Bxd8 gxh1Q
wins. Or 2 Bxg2 Qxg5.
Each row, column and 3x3 box must contain the digits 1 to 9.
The digits within each group of cells joined by dotted lines
must add up to the figure in the top-left-hand corner of each
group. Within each dotted-line group, a digit cannot be
repeated.
1 Rxe5+! breaks the defences.
After 1?dxe5 2 Qc5 the threat of Qe7+
is unstoppable.
TEASER 2883
31684
TEASER 2884
Des and Mike
CELL BLOCKS
4
34
3 23 7 35 3 22 6 28
52
29
69
25
2 3
4 13 7 22 3 23 3 22
168 154
28
17
3
6 28 7 22 8 20 4 13
288
42
160
44
8 36 7 35 8 20 8 36
3
3 3 4 6 7 7 8 8 13 20 22 22 23 28 35 36
DWV E AM T P R B HQ I
U S N J L YGX K F O Z C
15
SPOT THE MOVE 1095
All the digits 1 to 6 must appear in every row and column. In
each thick-line ?block?, the target number in the top left-hand
corner is calculated from the digits in all the cells in the block,
using the operation indicated by the symbol.
Solution to 4779: Across: 1 Sedative, 5 Opt out, 10 Appal, 11 Nails down,
12 Conversation, 15 Coax, 16 Bierkeller, 18 Cat burglar, 19 Isle, 21 Heir apparent,
24 Come again, 25 Motto, 26 Butter, 27 Cellared Down: 1 Spatchock, 2 Dependants,
3 Tiller, 4 Vanishing cream, 6 Pushover, 7 Oboe, 8 Tiny, 9 Victoria sponge, 13 Flesheater, 14 Priesthood, 17 Fuselage, 20 Mammal, 22 Scab, 23 Omit
LAST WEEK?S SOLUTIONS
17
17
West
1 Contrary to most, grand
dons hating showers?
(7,3,5)
2 Line from song off a
record (5)
3 God, a good walk
spoiled around
harbours ? due to this?
(8)
4 Bloke entertaining Earl
is good value (5)
6 Cheery Greek character
about to obtain lead
over European (6)
7 Terribly dull tie is not a
good match (3-6)
8 Woman in article took
out what happened
around 10? (3,5,7)
9 Bit of seepage with locks
under pressure (8)
15 I love travelling on tours
to house of ill-repute (9)
16 Genial new nurses
beginning to nurture
small biases (8)
18 Feeling awfully tense
holding one set of holy
works (8)
21 Very harsh split ending
in divorce (6)
23 Big argument? No good
going back over it! (5)
25 Go light (5)
The first correct solution opened after next Saturday wins a 10-carat rolled gold
Cross Century II fountain pen worth г230. The next three win г120 10-carat rolled
gold Cross Century Classic ball pens. All have lifetime guarantees. Post solutions to
The Sunday Times Crossword 4780, PO Box 29, Colchester, Essex CO2 8GZ, or email
puzzle.entries@sunday-times.co.uk
This week?s problem
E
Down
1 Object to play after expertise
is seen with poem (8)
5 I want to be 12 and barrel
about around Norfolk town
mostly (6)
10 A crossword might give
you one flipping laugh a
minute! (3,6)
11 One of the army brass must
advance left in surge? (5)
12 Contrary uni boss drinks in
King?s Head out of habit (5)
13 Early Trump era atrocious,
distressing essentially (9)
14 10 workers touring large,
empty edifices without
residents (10)
17 Amaze boss having made
latest start on numbers (4)
19 Detest husband, a tyke
without any substance (4)
20 Tough as aggressive old goats
might be? (4-6)
22 Gang up with nerd to hamper
one working in Beds? (9)
24 Zero-hour contract worker
possibly getting old rate (5)
26 Fuss about love (5)
27 See Spot go for a new
treatment in March? (5,4)
28 Street in poverty built a home
out of bits of wood (6)
29 Charlie Brown returned
blocks that girl had
grabbed (8)
Eventually East has to ruff
and lead away from the king
of spades.
Note that if South had
doubled three diamonds, the
final contract would have
been four spades, which
goes down on either a heart
or a club lead, as West can
score a ruff.
BBO (bridgebase.com) is
great for practice and for
online teaching. If you have
been playing for a while and
want to improve your game,
online bridge lessons are the
best way forward. Anyone
interested is welcome to email
me at sally@sallybrock.com.
N
...................................................................................
ADDRESS ...................................................................................
McShane-Anand, Riyadh
2017. How did Black turn this
seemingly balanced position
in his favour?
W
25
29
NAME
с D D D D]
рD D D 0k]
▀ D Dq0 D]
▐D D D Dp]
▌pG D D )]
▄) D DQ) ]
█ D D DNI]
┌DrD D D ]
┴┬├─┼╞╟╚
AQJ52
KJ2
K62
87
24
27
28
Spot the Move 1096:
Black
to play.
________
/
.
v
,
23
26
To enter, complete the Hard or Very Hard puzzle and call 0901 292 5275 (ROI 1516
303 500), leaving your answer (the numbers in the three shaded squares) and
contact details. Or text SUNDAY1 (Hard), or SUNDAY2 (Very Hard), followed by a
space, then your answer (three numbers) and contact details ? eg SUNDAY1 123
John Smith, etc ? to 84901 (UK only). Calls cost г1.00 (ROI ?1.50) plus your telephone
company?s network access charge. Texts cost г1 plus your standard network charge.
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midnight on Saturday. If you call or text after this time you will not be entered but
may be charged. When entering by phone or text, please provide your FULL name
and address details, as incomplete entries may be charged but not entered.
STUCK? Call our clue line to get four clues for either puzzle on 0901 322 5004 (ROI
1514 515 120). Calls cost 75p (ROI 76c) plus your telephone company?s network
access charge. For full terms and conditions, visit thesundaytimes.co.uk/comprules.
SP: Spoke, 0333 202 3390 (Mon-Fri 9am-5.30pm)
out seat. I held that hand and
decided that I was good
enough to bid, but I didn?t like
to double with only a
doubleton spade. I preferred
to bid my strong four-card
heart suit, and partner raised
me to game.
West led the ace of clubs
and switched to a diamond.
The contract looked good on
any 4-2 heart break or better.
With one spade, four hearts,
one diamond and three clubs
in the bag, all I needed was
one diamond ruff in the
dummy. It looked as if clubs
were breaking 4-1, in which
case hearts were probably 4-2
or better.
I won the ace of diamonds,
played a heart to my hand
and ruffed a diamond in the
dummy. There are several
ways to succeed now. One is
to cross back to the ace of
spades and ruff another
diamond. Then draw some
trumps and cash some clubs.
The alternative is to
come back to hand with a
trump, and play out all
trump and club winners.
20
abed, abrade, adda, adder, adhere, ahead, area, bard, bardee, bare, bareheaded,
bead, beaded, bear, beard, bearded, bedad, bedhead, behead, brad, brae, bread,
breaded, breadhead, dada, dare, dead, dear, debar, dhaba, drab, dread, eared, haar,
hade, hard, hare, head, header, hear, read, redhead, rehab, rhea
In the grid, each number
represents a letter of the
alphabet ? all 26 letters are
used. Use the initial clues in
the code table to work out the
rest of the code.
STUCK? To get four random
extra letter clues, call 0901
322 5309 (ROI 1514 415128) or
text STCLUE to 84901 (UK
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22
15
Send your solution to: The Sunday
Times Teaser 2885, PO Box 29,
Colchester, Essex CO2 8GZ or email
puzzle.entries@sunday-times.co.uk.
The first two correct solutions opened
after next Saturday win г20.
17
21
VERY HARD ? PRIZE 1199
of the head was a single digit
multiple of the weight of
the shaft. What was the
height of my mallet?
16
19
7
shaft, the smaller of which
was less than the height of the
head. Each of these three
distances was a whole prime
number of cm, and taking
the three distances together
with the height of the mallet,
no digit was repeated.
I worked out that the weight
15
Easy 4; Medium 155; Harder 656
CODEWORD
heavier cuboid head, both
of uniform density. Knowing
the total weight of the
mallet, I wanted to work
out the weight of the shaft.
I found the point of balance
along the shaft and
measured the distances
from there to each end of the
8
1 Ukip?s Henry Bolton 2 A polar bear was born 3 Tomorrow 4 Celebrity Big
Brother ? they are contestants this year 5 Former England player Trevor
Sinclair is accused of urinating in police car while drunk 6 Massage
parlour worker 7 None. It was the safest year ever 8 The Taj Mahal
9 Philip Morris (to concentrate on vaping) 10 Post pictures on the
company?s app, Snapchat
John Owen
Croquet Mallet
My croquet
mallet is less
than a metre
high and
consists of a
cylindrical shaft
attached to a
7
18
3
TEASER 2885
6
13
14
2 4 5
1
6
2
5
11
12
7 5 4
6
4 5
4
10
9
Each row, column and 3x3
box must contain the digits 1
to 9. Winners will receive a
Collins English Dictionary &
Thesaurus.
3
9
Send your solution (first move only), to Sunday Times Spot the Move 1096,
The Sunday Times, PO Box 29, Colchester, Essex CO2 8GZ, or email to
puzzle.entries@sunday-times.co.uk. The first correct answer drawn after next
Saturday wins г20.
HARD ? PRIZE 1198
2
David McLean
SUDOKU
WARM-UP
KILLER SUDOKU
8
4
3
2
1
6
9
5
7
2
9
6
5
8
7
4
3
1
7
5
1
3
4
9
6
2
8
4
2
8
6
3
1
7
9
5
9
3
5
7
2
4
8
1
6
6
1
7
9
5
8
3
4
2
5
8
4
1
7
3
2
6
9
3
6
2
8
9
5
1
7
4
1
7
9
4
6
2
5
8
3
2
5
3
1
4
9
6
7
8
8
1
4
7
6
5
9
2
3
6
7
9
2
3
8
5
4
1
9
6
8
5
2
1
7
3
4
5
3
2
9
7
4
1
8
6
PRIZE 1196
1
4
7
3
8
6
2
5
9
4
8
1
6
5
2
3
9
7
3
2
6
8
9
7
4
1
5
7
9
5
4
1
3
8
6
2
4
6
5
2
2 4
4
2
PRIZE 1197
3
2
18
The Sunday Times January 7, 2018
MONEY
FAME AND FORTUNE
TERRY WAITE
After I was
kidnapped,
writing
set me free
MIKE LAWN
What was your first job?
I applied early from school to the
Grenadier Guards before returning to
college after getting a medical discharge.
Out of college, my first job was as
education adviser on the staff of the
Bishop of Bristol. Luckily, it provided
Frances and me with a grace-and-favour
house in Bristol.
Do you invest in shares?
I have a financial adviser at Rathbones
who does it on our behalf. My wife and I
have been with him for many years and
we trust him implicitly. Our sole request
is that our money has to be ethically
invested, so nothing in armaments.
We?re cautious investors and I leave the
team to get on with it and don?t meddle.
Years in captivity taught the humanitarian
self-reliance ? and this helped him land a
life-changing book deal, says Sarah Ewing
A
fter a stint in the Grenadier
Guards in his twenties,
Terry Waite, 78, has spent
50 years dedicated to
humanitarian work. While
working as an envoy for the
Church of England in the
1980s, he was sent to
Lebanon to secure the
release of four western
hostages, including the journalist
John McCarthy. He was kidnapped
himself in January 1987 and spent almost
five years in captivity before being
released in November 1991.
Since his release, he has devoted
himself to charity work and launched a
speaking and writing career ? his latest
book is Solitude. He lives in London
and Suffolk with his wife, Frances, 78.
They celebrated their golden wedding
anniversary in 2014 and have four adult
children, three daughters and a son.
How much money do you have
in your wallet?
Normally I?m penniless. I do keep a
couple of coins in the car for parking,
but I?m pretty hopeless with cash. My
friends say I emulate royalty, but I don?t
do it deliberately.
What credit cards do you use?
I?ve had a Visa for decades, but I don?t
use any of the fancy add-ons or rewards.
I prefer to arrange my travel insurance
What?s better for retirement
? property or pension?
A bit of both.
What has been your best
business decision?
Signing a good deal for my first book,
Taken on Trust. I was writing it in my
head while still in captivity and it poured
out onto paper at Trinity Hall. It?s still
in print after 25 years. It was the
springboard for my writing career ? I?ve
completed another five books. It can be
hard to put a value on your work, but I
had an excellent editor who fought for
me. That book deal gave me enough to
buy our cottage in Suffolk and to
establish the Hostage UK charity ? and
gave me a financial cushion to continue
with my writing.
separately with InsureandGo because
of my special circumstances. I find some
of the insurance deals you get with cards
don?t actually meet your needs. Despite
having been kidnapped before, I don?t
find it hard to get insured.
Are you a saver or a spender?
Definitely a saver ? I always fill up at
Asda because their petrol is about as
cheap as you?ll get. My frugal habits are
ingrained in me. My father was the
village policeman in Styal, Cheshire,
and money was always tight.
I remember when I was 14, in 1953,
and the school had organised a trip to
Paris, costing г15, which was a lot of
money in those days. Obviously, we
couldn?t afford it and sitting in the
My parents could
not a?ord the г15
school trip to Paris.
I thought, ?I?ll never
see the world now?
writing. What attracted me was its
location, close to Cambridge ? at the
time I had a fellowship at Trinity Hall.
After spending so many years in
isolation, I?ve grown to value solitude
and peace and quiet. I felt like I was
going back to my roots, having grown up
in a small village. But it?s easy to get to
London ? from Sudbury it?s about an
hour and a half into Liverpool Street.
Terry Waite, pictured at Trinity Hall, Cambridge, says: ?Despite having been kidnapped, I don?t find it hard to get insured?
classroom with three-quarters of the
kids gone on the coach, I thought,
?There goes my opportunity, I?ll never
see the world now.? It?s always given me
empathy for kids in poor families.
(emmaus.org.uk), which helps tackle
homelessness and poverty. This is a
hard time of year for people in bleak
situations ? often they?re homeless
through no fault of their own.
Are you better off than your parents?
Without a doubt. Dad had a very difficult
time during the Depression when he was
homeless in his twenties. He survived by
sheer determination. Very often he went
without eating, but eventually he was
able to get simple lodgings and got back
on his feet and had a successful career
in the police.
It?s one of the reasons I became
president of the charity Emmaus
How much did you earn last year?
I haven?t had a proper salary for more
than 25 years. When I came out of
captivity, I knew I couldn?t go back to
traditional salaried work, even though
my job at Lambeth Palace had been left
open for me. I decided to try to earn a
living writing and lecturing, and then
give my time to various charitable
organisations that speak to me, so in
addition to Emmaus, it?s charities such
as Hostage UK.
I wouldn?t have had the courage to
branch out had I not had years of
captivity where I had nothing. I had to
learn to be totally self-reliant. This really
affected my attitude when I came out.
Limited
time
only
Have you ever worried about how
you were going to make ends meet?
Yes, twice. Right after I was married in
1964, I was working on the Bishop of
Bristol?s staff, I was being paid a small
salary and each month my wife and
I were pushed right to the end of our
bank account. We budgeted carefully,
knowing the exact amount to the penny
we spent on food. We constantly
wondered how we would manage if
there was a crisis. Luckily there wasn?t.
Then, after 15 years in Africa doing
humanitarian work, we returned to the
UK in 1978. Mortgage rates were about
14% and having never been paid much,
it was a real worry how we were going to
manage. We were brought up in an era
when you didn?t live in permanent debt,
whereas now you?ve got the credit
generation.
We found a house in Blackheath,
southeast London, which was nowhere
near as popular as it is now. It cost
г35,000 in 1978 and I paid off the
mortgage years ago. We?ve kept it and
one of our daughters lives there now. I?m
never tempted to check to see what it?d
be worth now. I recognise in retrospect
that we were a fortunate generation,
given the cost of buying property or
even renting now. How can youngsters
do it, without inheriting?
Apart from the house in Blackheath,
do you own any other properties?
Yes, a former wheelwright?s cottage in
Hartest, near Bury St Edmunds in
Suffolk. The village features in the
Domesday Book, which has resonance
with me. I bought the cottage after
publishing my first book, Taken on
Trust, in 1993. I wanted a place where I
could escape the noise of London and
have all my books and papers together,
to be able to be alone and get on with
What?s your money weakness?
Books! Our house is coming down with
books, every room is packed. I keep
promising myself I?m going to catalogue
them properly, but that?s an awful task.
I?m still old school enough to like CDs so
I have lots of those, too. I get sent lots as
I?m president of Llangollen eisteddfod.
What?s one thing you?d change about
the business or financial world?
I?d like to see the money we put into
overseas development get to the people
who need it. I?ve seen so much where
thousands and thousands has gone into
the pockets of corrupt dictators and
been mismanaged. There should be
better and more transparent
management. I?m not saying all our aid
money is going in the wrong way. The
public should be able to see the basic
accounts ? where?s the money gone,
how?s it being spent, what has it done?
I think this would encourage more
people to donate. Charities need to
make sure their money is going as
far as possible and isn?t spent on
unnecessary admin and overheads,
such as flashy offices.
What would you do if you won
the lottery jackpot?
I don?t do the lottery but if I did get a
windfall, I?d make sure my four children
were adequately compensated. They
had a tough time growing up, while I
was in captivity, so I feel responsible for
making amends. I?d also like to see some
of the people who?ve been supportive of
me over the years get a surprise.
Waite was released in November 1991
What is the most important lesson
you?ve learnt about money?
While you must make sensible plans for
the future, live each day as it comes and
live it as fully as you can. Don?t let your
worries about the future consume
your today.
You can try ?open banking?, but
my account is for my eyes only
PETER
CONRADI
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Are you getting the best deal on your
current account? Paying too much for
electricity or gas? What about your
credit card, broadband or home
insurance? There is something
about the arrival of the new year that
prompts us to think about whipping
our finances into shape.
But what if a company came along
offering to sort it all out, leaving you
free to concentrate on the more
interesting things in life?
That, essentially, is the promise
implicit in the so-called open banking
revolution. From Saturday, it will be
possible, with a few taps on your
smartphone, to allow a company
access to your bank details.
With your permission, your new
financial personal assistant could
go through your current account, look
at everything you spend money on and
work out how you could get the same
goods and services more cheaply.
What?s not to like?
Quite a lot, actually. For a start,
there?s the matter of privacy. Don?t get
me wrong, I?m not one of those people
who sees the spread of the cashless
society as a plot by government and
big business to spy on us. Yet that
doesn?t mean I want all and sundry
to know my spending habits.
The other concern is security. Over
the years I have been the target of a
number of financial fraudsters. Armed
with nothing more than my name and
address, conmen have managed to
buy expensive phones and secure
four-figure credit lines from mail-order
companies. My experience is, I fear,
increasingly common.
So imagine what the crooks could
get up to if they also had information
about your bank account and the
companies with which you have had
dealings. Then think of the time and
effort required to call fraud helplines
and cancel credit cards once you
discovered the wrongdoing.
The providers of these new
open-banking services will, no doubt,
seek to convince us of quite how
fraud-proof they are. And many people
will be convinced. One of the first
companies to take advantage of this
financial revolution, Yolt, which is
backed by the Dutch bank ING, has
already signed up more than 100,000
people for its money management app.
I, for one, remain to be convinced.
Call me a Luddite, but I would rather
carry out my financial detox myself
(find some tips to do the same on
page 12).
Fees for a job well done
Ruth Emery?s column last week about
the merits of using a financial adviser
generated a healthy mailbag, with
readers evenly divided. Some are happy
to leave it to the professionals to
manage their money, while others balk
at the idea of handing over 1%-2% of
their wealth regardless of how well
their investments perform.
So, here?s an idea: what about a
?no win, no fee? system? If your adviser
makes money for you, they get a cut
? say, 10% ? of the profits. If they lose
you money, they get nothing or, better
still, cover part of your loss.
If that?s too crude, why not judge
their performance relative to a
benchmark such as the FTSE 100? Such
a pricing structure would reward the
best advisers and let clients know what
they are getting for their fees.
Are any advisers already doing that?
If not, are they ready to give it a try?
Please let us know.
@peter _conradi
they
matured. Unfortunately, Yorkshire did
not mention in its online application
form that if we switched before the
independent financial adviser
(IFA) ? especially for people
like me, with a pretty
mainstream income and
finances. You?re never likely
to notice the charges as
they?re usually deducted at
source, and many people?s
ignorance of baffling financial
matters could be standing in
the way of a much-improved
retirement situation.
Adrian Bamford, on
thesundaytimes.co.uk
These guys charge high fees
for providing advice that can
be deduced pretty easily by
most switched-on people.
They suggest a 1% charge
is reasonable, yet this is
between 25% and 30% of
the current natural yield of a
UK portfolio. Therefore, IFA
clients must dig into their
capital or make higher-risk
investments to make up those
costs and obtain a reasonable
income from their portfolio.
David, on
thesundaytimes.co.uk
I keep in touch with the
economy, buy and sell shares,
spread bet and so on, and my
portfolio is doing well. I do
not need an IFA to tell me
the obvious ? that I should
pay off my debts, invest in
tax-efficient instruments and
top up my pensions.
Reverse Swing, on
thesundaytimes.co.uk
Pooch protection
A key part of pet insurance
is the third-party liability
cover for when Fido causes a
multi-vehicle pile-up while
retrieving his ball (?The dog?s
eaten its lead ? and mauled
my wallet?, December 24).
For dog owners, an
alternative is to join Dogs
Trust. For an annual
membership fee of г25
(г12.50 if you are over 60) you
Jill replies
Your letter provides a timely warning
for the many readers who will be
transferring their Isas before the end of
the tax year and at the start of the new
one. In the past transfers could take
weeks, if not months, to be processed,
so I?m not surprised you were caught
out by this transfer taking less than
24 hours.
You are particularly angry with
Halifax for failing to warn you that you
would lose interest. But I have seen the
letter that the bank sends to savers in
the run-up to the end of an Isa?s term.
This points out that you could face
charges if another provider requests
the transfer of funds before your Isa
account matures.
Maybe Halifax could have sent you an
email or letter to check that you really
wanted to close the accounts early, but
transfers are initiated by the bank or
society receiving the money and I felt
the wording used by Yorkshire Building
Society on its transfer form could have
pointed out the potential risks.
Yorkshire agreed. It has adjusted your
accounts to reimburse you for the г503
interest lost through Halifax?s early
closure penalty. It added: ?We have also
updated our e-Isa transfer form so
customers more clearly understand
what maturity date information we
need.?
CAN WE HELP YOU?
Please email Jill Insley at
questionofmoney@sunday-times.co.uk
or write to Question of Money,
The Sunday Times, 1 London Bridge
Street, London SE1 9GF.
Please send only copies of original
documents. Letters should be
exclusive to The Sunday Times. Advice
is offered without legal responsibility.
We regret Jill cannot reply to everyone
who contacts her.
same provider a few weeks
ago, to get a better interest
rate. I?m also keen to open
a stocks and shares Isa this
tax year. Am I allowed to
do this?
MD, Sheffield
P45
A financial adviser can help with budgeting, tax and pensions
get г1m third-party liability
insurance as well as a 24-hour
emergency helpline.
GP, Wadhurst, East Sussex
Meals on drones
I agree with Ian Cowie?s
suggestion that, in the
internet age, the problem of
not being at home when a
parcel arrives deserves a
hi-tech solution (?Amazon
and its Swedish pal have the
key to unlock huge returns?,
last week). I also agree that
delivery by drone is not going
to take off. The idea that the
book I order or even the
takeaway from down the road
will be delivered by drone is
just, well, pie in the sky.
ME, Bedingfield, Suffolk
A better legacy
While your piece on family
finances and inheritance tax
was accurate, it may have
painted an unduly pessimistic
picture for many readers as it
did not mention changes in
relation to main-residence
property (? ?Tis the season
to sort your finances?,
December 24).
Since April 6 last year,
there has been an additional
г100,000 nil-rate band when
a residence is passed on
death to a direct descendant.
This will increase in annual
increments to г175,000 in
2020-21, after which it will
rise in line with the consumer
prices index.
This will save my
daughters г40,000, and if I
get to April 6, 2019, then
inheritance tax will apply to a
very small sum, which will
reduce to zero on April 6,
2020. These changes mean I
do not feel it is worth taking
steps to minimise my liability,
whereas without them it
would be prudent.
PB, Sudbury, Suffolk
Ruth Emery replies: Yes. You
are allowed to open ? and
pay into ? one of each type
of Isa every tax year. So
you can start a cash Isa, a
stocks and shares Isa, an
innovative finance Isa and a
lifetime Isa in 2017-18.
You can then split the
annual allowance of г20,000
between all four accounts. If
you wanted to pay г5,000
into your Virgin Money Isa,
you could put up to г15,000
into your new stocks and
shares account.
Savers are allowed to have
lots of Isas, which they
accumulate over the years.
The golden rule, however, is
that you can open only one
of each kind of Isa every tax
year. So you will not be
allowed to set up another
cash Isa before April 5, but
you can open a stocks and
shares account.
We love to receive your
feedback on stories and
your views on any issues
you would like us to
investigate. Always
include your name and
address when contacting
us. Letters may be edited.
WRITE TO
Money, The Sunday Times
1 London Bridge Street
London SE1 9GF
One year, two Isas EMAIL
money@sundaytimes.co.uk
I have a cash Isa with Virgin
Money, which I opened
several years ago. I started
another cash Isa with the
TWITTER
@ST_Money
15
The Sunday Times January 7, 2018
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