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The Sunday Times Business 27 August 2017

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BUSINESS
&MONEY
August 27, 2017 · thesundaytimes.co.uk/business
IN THE MAGAZINE
lley’s patro
Va
n
sa
int
Sili
co
n
MARC ANDREESSEN
TALKS TECH
PLUS LISTEN TO THE FULL
INTERVIEW ON OUR PODCAST
thesundaytimes.co.uk/
dannyinthevalley
thesundaytimes.co.uk/money
PARENTS CAUGHT
IN CHILDCARE
CHAOS
MONEY, PAGE 11
The internet is “very, very
early on” in its evolution and
is about to be unleashed on a
swathe of industries so far
untouched by its power for
disruption, according to one
of the most influential
investors in Silicon Valley.
In an exclusive interview
with The Sunday Times,
Marc Andreessen, the
billionaire venture capitalist
and co-founder of
revolutionary web browser
Netscape, said the next wave
of technological disruption
will have an impact on
sectors previously thought
safe from its reach —
including law, medicine and
construction. A steep drop in
start-up costs is encouraging
innovation, he said.
Andreessen also warned
that anyone who is worried
about the march of robot
technology and its threat to
Big tobacco
rides to
rescue of
wholesaler
Imperial Brands in plan
to prevent collapse of
Palmer and Harvey
Daniel Dunkley
Two global cigarette giants are preparing
a rescue plan for the tobacco wholesaler
Palmer and Harvey (P&H), as it teeters on
the brink of collapse.
Imperial Brands, the owner of Lambert & Butler, and Japan Tobacco International ( JTI), which makes Silk Cut, are
understood to have hired restructuring
advisers at Deloitte and EY to assemble a
rescue package for the business, which
supplies 90,000 shops.
The tobacco giants are said to be planning to create a new company to run
P&H, funded by them in the form of a
loan. The plan comes after competition
authorities ruled out a full takeover by
Imperial and JTI, an option said to have
been explored seriously in recent weeks.
P&H was one of several companies
thrown into turmoil when Tesco
announced its surprise £3.7bn swoop on
the food, drink and tobacco wholesaler
Booker in January. P&H, one of Britain’s
biggest private companies with more
than 3,500 employees, makes 40% of its
sales through Tesco. The takeover deal
spooked its lenders, which feared Tesco
would switch all its buying to Booker.
Just four months ago Tesco agreed to
extend P&H’s contract as part of a refinancing in which Imperial and JTI lent
the wholesaler hundreds of millions of
pounds. The two giants are desperate to
keep the business afloat to avoid disruption to their supply chains. P&H’s fleet of
1,300 trucks is integral to supplying Britain’s supermarkets with cigarettes.
Imperial and JTI are likely to take a further financial hit from any bailout
arranged by Deloitte and EY.
Meanwhile, P&H chief Tony Reed, a
former Tesco executive, is said to be
jobs is fretting over a “fake
problem” and buying into a
“Luddite fallacy”.
He said: “The basic cost of
starting an internet company
has fallen from maybe $20m
[£15m] of upfront capital to at
least half a million, and
actually you see a meaningful
number of companies now
where they’re started on
basically no capital. Every
entrepreneurial experiment
you can imagine on the
internet is being tried.”
12
14
Andreessen was an early
backer of Facebook, where he
is still a director. His venture
capital firm, Andreessen
Horowitz, was also an early
backer of Airbnb, Skype and
Twitter, among about 150
other start-ups.
Despite the upheaval
caused by the technology
industry, Andreessen argued
that the change seen so far is
marginal — what he called
“intra-mural sport”.
Healthcare will be the next
sector to be upended by
technology, he said.
“If [artificial intelligence]
can now tell what’s a cat in a
photo, then maybe it can tell
what’s a tumour in an MRI
better than a person,” he said.
“Today virtually every newly
minted PhD in biology at
Stanford [University] is also a
PhD-level computer scientist.
There’s something really
special happening at the
intersection of medicine and
computer science.”
SUITORS EYE ESTÉE LAUDER
Blueprint for
biotech titans
revealed
Sabah Meddings
A government-backed plan to
create four new British
biotech titans — each worth
more than £20bn — is to be
unveiled this week.
Sir John Bell, a worldrenowned Oxford University
professor and adviser to the
Bill & Melinda Gates
Foundation, will reveal his
recommendations for an
industrial strategy for the life
sciences sector in
Birmingham on Wednesday.
According to industry
sources, the Canadian-born
immunology and genetics
expert will advocate tax
breaks and direct state
investment to give additional
support to Britain’s £60bn
life sciences industry. Among
the measures likely to be
included in the report are:
l The creation of a fund
backed by a coalition of
investors to aid start-ups in
fields such as genomics and
artificial intelligence;
l More funding for basic
research — including new tax
incentives;
l A life sciences
apprenticeship scheme to
train technologists,
healthcare workers and
scientists focused on health
technology;
l A network of technological
institutes to provide training
for more vocational roles in
the sector;
l Better collaboration
between the NHS and
industry, including a
recommendation that
anonymous patient data be
shared to help track the
effectiveness of drugs;
l A plan to boost exports
by creating an agency that
could serve as a single
account manager for foreign
health agencies looking to
buy British.
The report, compiled
with input from across the
industry, is expected to be
followed by a sector deal for
life sciences in the autumn.
The business department
declined to comment.
1,000 pubs sold to
Americans for £220m
scrambling to secure an external rescue
bid. With a September deadline looming,
the wholesaler needs a cash injection of
£50m to stay afloat after a squeeze on
margins in recent months.
P&H generated £2.5bn of sales last year
but after investing in two depots only
made a £618,000 profit. In the spring it
hired the advisory firm PwC to find new
investors. However, the process has yet
to result in a serious offer and sources say
a takeover is increasingly unlikely.
While Sainsbury’s had been tipped as a
buyer, the supermarket chain’s interest is
said to have waned following the collapse
of its £130m talks to take over convenience store chain Nisa. The Co-op has
also been linked with a move to buy P&H,
though sources close to the mutual talked
down that idea this weekend.
Daniel Dunkley
Admiral Taverns, one of
Britain’s biggest pub chains,
is set to be sold to a US
investment fund for £220m.
Admiral, which owns more
than 1,000 pubs across the
country, is in advanced sale
talks with New York fund
Proprium Capital, sources
said. The move comes after
its owner, the hedge fund
Cerberus, launched an
auction process earlier in the
summer.
It is four years since
Cerberus snapped up the
pubs for £200m from then
owner Lloyds Banking Group.
It is set to make a decent
return on its investment after
taking out cash in 2014
following a debt refinancing.
Cerberus is working with
Smoke signal:
Palmer and
Harvey chief
Tony Reed is
trying to secure
an external
rescue bid
One potential suitor said there was no
equity value in P&H, which is largely
owned by its workers. As a result the company’s lenders, including Barclays, are
set to have a significant say in its future.
The wholesaler said: “Having received
a number of expressions of interest from
trade and financial parties, we are confident of a successful outcome.”
l André Calantzopoulos, the chief executive of Philip Morris International, has
played down the chances of a takeover of
US rival Altria, following British American Tobacco’s purchase of rival RJ Reynolds last year. Calantzopoulos said: “I
don’t think this is at all in the plans.
Licensing arrangements with Altria give
us access to the [US] market. We are very
happy with the relationship and I don’t
think anything more is needed.”
SILICON VALLEY’S
QUEST FOR
ETERNAL LIFE
PAGE 6
PUZZLES
PAGE 16
STILL A COUNTRY
BUMPKIN — GTECH
BOSS NICK GREY
INTERVIEW, PAGE 7
Internet age just starting, says tech guru
Danny Fortson
San Francisco
TECH
The company, which has worked with model Kendall Jenner, is thought to be working on a sale
Estée Lauder shares flirted
with all-time highs last week
amid speculation the make-up
giant is working with bankers
at Goldman Sachs and
Evercore on a sale, following a
takeover approach worth
more than $40bn (£31bn),
writes Ben Harrington.
Shares closed at $106.50
on talk that its move to look at
“strategic options” had been
triggered by interest from
L’Oréal. The Paris-based
company is rumoured to have
made an indicative approach
of $122.80 a share. Evercore is
said to have provided a
“fairness opinion”, valuing
Estée Lauder at $140 a share.
Reports suggest several
other consumer good giants,
such as FTSE 100-listed
Unilever, are now looking at
taking part in any Estée
Lauder sale process.
JAB Holding, the
investment vehicle of the
billionaire Reimann family, has
been suggested as a potential
purchaser of the company,
which is still controlled by
the Lauder family.
JAB owns a big stake in USlisted beauty products group
Coty, and City sources said it
could push for a combination
of the two businesses.
Procter & Gamble and
Colgate-Palmolive have also
been tipped as potential
purchasers.
advisers at Sapient Corporate
Finance on the sale talks.
Admiral was set up by the
wealthy Landesberg and
Rosenberg families in 2004,
but hit trouble after a debtfuelled acquisition spree
before the financial crisis.
The company collapsed
under the weight of its near£1bn debt pile and was seized
by HBOS, later part of Lloyds.
The bank eventually
offloaded the company to
Cerberus, but was said to
have made a £500m paper
loss on its loans at the time.
Proprium is best known in
the property market and
owns a stake in the European
hotel chain Motel One.
A deal has not yet been
signed, sources said, and rival
suitors may swoop should the
talks break down.
Provident Financial
faces risk of £200m bill
Aimee Donnellan
and Ben Harrington
Crisis-hit Provident Financial
could be forced to pay more
than £200m compensation to
customers for mis-selling
products said to be similar to
payment protection
insurance (PPI).
Shares in the 137-year-old
lender crashed by two-thirds
last week — one of the largest
single-day falls recorded by a
FTSE 100 company — after it
admitted a new technology
system and an overhaul of its
lending business had wiped
out profits. Chairwoman
Manjit Wolstenholme
indicated that the board was
looking to claw back bonuses
from Peter Crook, who quit as
chief executive last week. He
has earned £34m in his
decade at Provident.
Yet analysts believe the
biggest hit to the company
could come from an
investigation by the City
watchdog into repayment
Continued on page 2 →
2
The Sunday Times August 27, 2017
BUSINESS
DIGEST
CHINESE CHECK
CHIP DESIGNER
RISK ADVISER IN
£13.6M BUYOUT
A financial risk consultancy
has completed a £13.6m
management buyout as it
seeks to expand into new
markets, writes Laura Onita.
JC Rathbone Associates
(JCRA), which advises
clients on debt, private
equity and hedging, made
pre-tax profits of £1.1m on
sales of £12m last year.
The buyout, backed by
the investment business
Connection Capital, marks
the exit of founder John
Rathbone, who set up JCRA
in 1989, and three other
directors. Chief executive
Jackie Bowie, above, aims
to bag more customers in
Canada, Europe and
America. “The business has
matured a lot, but we have
ambitions to grow much
more,” said Bowie, 44.
Hays
180p
170
160
The Chinese investment
group Canyon Bridge
Capital Partners has hired
Citigroup to launch a
takeover bid for
Imagination Technologies.
Sky News reported that
Canyon Bridge had made
“significant progress”
during talks with the chip
designer in recent weeks
and a formal bid could be
tabled in the next fortnight.
Imagination put itself on
the block in June after
losing its contract to supply
Apple with graphics
technology for iPads and
iPhones. Several other
unidentified bidders are
also believed to be in talks
with the company, which is
based in Berkshire.
0.1%
Forget HS2 and build northern
hyperloop, ministers told
‘30-minute link’
between London
and Manchester
Tommy Stubbington
The government has been urged to scrap
HS2 and instead invest billions in futuristic “hyperloop” transport technology
to boost the economy of northern
England.
Hyperloop systems, which are being
developed by US entrepreneurs including Tesla founder Elon Musk, are magnetically levitating pods that travel through a
vacuum tunnel at speeds close to the
sound barrier — potentially putting Liverpool, Manchester, Leeds or Newcastle
within about 30 minutes of the capital.
“Hyperloop could make jobs in London accessible to people living hundreds
of miles away, challenging the northsouth divide and creating a more balanced spread of wealth across the country,” said David Harrison, president of the
think tank Policy North, which was set up
by a group of entrepreneurs from the
northeast.
“Workers would no longer need to
move to London to access the best-paying
opportunities — only to have the benefits
of those positions wiped out by the soaring cost of living there. Similarly, businesses could locate to the north of
England where there is plenty of space.”
Musk’s latest prototype clocked up a
speed of 190mph at a test track in the
Nevada desert earlier this month. Dirk
Ahlborn, another leading hyperloop
entrepreneur, has said the first system
could be ready by 2020.
The technology is “all proven”, Ahlborn told The Sunday Times’s “Danny in
the Valley” podcast in June. “The challenge is bringing it all together in a way
that makes economic sense.”
Despite the tech industry hype, a fully
operational route in the UK is likely to be
a long way off. Policy North, however,
argues that the same applies to HS2 , with
the London to Birmingham route not due
to open until 2026, and connections to
Manchester and Leeds set to take a further seven years.
The think tank also said that building a
British hyperloop would be substantially
cheaper than the projected £56bn cost of
the high-speed rail line.
“The government must stop trying to
deliver our future transport infrastructure with technology that will already be
outdated by the time HS2 is operational,”
Harrison said.
MUSK CONNECTS BRAINS TO MACHINES
As if colonising Mars and building self-driving cars were
not enough, Elon Musk has started to raise money for a
new company that promises to meld our brains with
machines, writes Danny Fortson.
The start-up, called Neuralink, has received
commitments of $27m (£21m), according to a stock market
filing. After this was made public, Musk, 46, quickly took to
Twitter to say that Neuralink was “not seeking investors”.
But he did not elaborate.
The billionaire behind the Tesla electric car and rocket
company SpaceX has revealed few details on Neuralink.
But he is a vociferous critic of artificial intelligence, saying
it poses an “existential threat” to humanity. Neuralink seeks
to create devices that can be implanted in the brain to
allow humans to merge with software — so that, in theory,
mankind will not be left behind by AI-powered machines.
@dannyfortson
Cash set
to flow
again in
Greece
TRAVEL AGENT VIEWS RIVALS
The growth in household
spending in the second
quarter as inflation hit
consumers harder than
expected. The Office for
National Statistics said the
weak pound was “hitting
household budgets” as
overall growth was
confirmed at 0.3%.
Aimee Donnellan
BREXIT HITS CAR
PLANT HOPES
150
140
130
OND J F MAMJ J A
Source: Thomson Reuters
HAYS HURT BY
SLUGGISH UK
White-collar recruitment
specialist Hays is expected
to report a sluggish
performance in its British
business when it reports
full-year profits on
Thursday.
The FTSE 250 recruiter is
expected to report strong
growth in every other
market, with Germany
charging ahead. Hays has
previously stated that hiring
is “challenging” in London.
Group profits are
forecast to hit £206m, up
20% from last year. Hays’
share price has risen 30%
to 171.5p in the past year.
The government’s muddled
Brexit strategy is delaying
investment at one of
Britain’s largest private
companies.
John Neill, boss of the car
parts and logistics provider
Unipart, said he was having
second thoughts about a
potential £5m expansion of
the company’s fuel-tank
plant in Coventry.
“I want to see a
deliverable plan, because
at the moment they are
asking me to invest my
stakeholders’ resources
based on a bunch of
slogans,” Neill said.
The Unipart chairman
and chief executive added
that he would be unable to
run his company without
large numbers of EU
workers.
Boost your efficiency with a
daily huddle, page 7
Compensation blow
for doorstep lender
→ Continued from page 1
option plans. The policies —
marketed to customers as a
tool to ease financial
difficulties caused by illness,
accident or unemployment —
account for nearly 6% (£70m)
of Provident’s annual
revenues. Analysts say if the
company is found to have
mis-sold the policies, the bill
could top £200m.
Wolstenholme told The
Sunday Times it was hard to
speculate about the outcome
of the investigation, saying:
“We believe . . . it is a product
that our customers value.”
City sources said Provident
is working with adviser Ondra
Partners on its strategic and
financing options.
A mis-selling bill would add
to growing concerns about
Provident’s ability to meet its
debt obligations. If its “net
worth”, excluding its pension
fund and its Vanquis Bank
subsidiary, dips below £155m,
lenders could call a default on
its debts. Its half-year results
put the figure at £343m.
“At the current loss rate for
2017 . . . the group could fall
below this level,” said Justin
Bates, a financial analyst at
investment bank Liberum.
Over a cliff, page 5;
Inside the City, page 9
The Inspiring Travel
Company, which plans
holidays for the wealthy,
is in talks to buy two rivals,
writes Aimee Donnellan.
The Chester-based
travel operator, which
featured recently in the
BBC2 documentary The
Millionaires’ Holiday Club,
is seeking to take
advantage of growing
demand among Britain’s
affluent travellers for
luxury bespoke trips.
ITC, which has
previously run charter
flights on Concorde, has
been growing steadily,
with revenues last year up
by 13% to £92m. Profits
were £4.3m, up 10%
year on year.
Jennifer Atkinson,
the chief executive,
said the unnamed
acquisition targets were
part of a planned
expansion. “Consumer
confidence is not
especially high following
Brexit,” she said. “But we
find when you ask people
what they would sacrifice
to save money, holidays are
usually at the bottom of
Draghi sends pound
to eight-year euro low
Tommy Stubbington
The pound has dipped to an
eight-year low against the
euro after European Central
Bank boss Mario Draghi
declined to talk down the
single currency in a muchawaited speech on Friday.
Sterling was trading at less
than €1.08 while Draghi
addressed the annual
gathering of central bankers
in Jackson Hole, Wyoming.
Some traders had been
expecting the ECB chief to
warn the euro was getting too
strong after a big rally so far
this year, but he gave no new
details of plans to reduce the
size of the ECB’s quantitative
easing programme.
Several analysts from
investment banks including
HSBC and Morgan Stanley
expect the pound to fall
further, hitting parity with
the euro by year end.
Official growth figures last
week confirmed the UK
economy expanded by just
0.3% in the second quarter,
half the rate notched up by
the eurozone.
Instead of dropping hints
about the coming shift in
monetary policy, Draghi
warned against rowing back
on new financial regulations
brought in since the crisis,
in comments that echoed
an earlier speech by Janet
Yellen, chairwoman of the
Federal Reserve.
“Any reversal [of
regulation] would call into
question whether the lessons
of the crisis have indeed been
learnt — and thus whether
financial integration can still
be considered safe,” he said.
their list.” Atkinson’s
customers spend an
average of £15,000 per
holiday and favour the
Caribbean. The firm’s
largest booking last year
was a £300,000 splurge
by a family seeking a
bespoke holiday.
Greece is to begin easing cash
controls in its banking system
on Friday, permitting
customers to withdraw more
of their savings.
In a sign of growing
confidence in the economy,
the left-wing government is
preparing to increase the
monthly cap on withdrawals
by 7% to €1,800 (£1,666).
The decision will also allow
farmers, companies and
employees seeking to lodge
their wages to open new
accounts, according to
sources close to Athens.
The move marks another
important step in Greece’s
recovery, after it successfully
returned to the bond markets
last month with a €3bn issue.
Greece imposed
controversial capital controls
on its banks in the summer of
2015 as the government
fought to keep its lenders
afloat. At the time, Athens
was desperately scrambling
to secure a €53.5bn bailout.
Initially, Greeks were
unable to withdraw more
than €60 a day and there
were also strict limits on
international transfers by the
public and businesses.
Restrictions on bank deposits
were kept in place to protect
Greece’s financial system.
David Lloyd lines
up finance chief
Oliver Shah
Draghi: regulations speech
Draghi also warned that
free trade was vital to global
economic growth, in words
that were widely seen as a
rebuke to Donald Trump’s
protectionist rhetoric.
Economic Outlook, page 4
The owner of David Lloyd
Clubs has poached a top
executive from London City
Airport as it grooms the
fitness chain for a £1.3bn sale.
TDR Capital has hired
Patrick Burrows as David
Lloyd’s new finance director.
Burrows, 50, previously
worked at the retailers New
Look and Tesco.
Burrows helped City
Airport’s American private
equity owner, Global
Infrastructure Partners, to
sell the east London hub for
£2bn to a Canadian
consortium led by the
Ontario Teachers’ Pension
Plan last year. He is expected
to play a similar role in David
Lloyd’s auction.
Former Davis Cup tennis
player David Lloyd opened
his first fitness club in 1982.
The chain changed hands
several times before TDR
bought it for £750m in 2013
from shareholders, including
the property entrepreneur
billionaire brothers Ian and
Richard Livingstone.
In May, the competition
watchdog cleared David
Lloyd’s acquisition of 14
Virgin Active gyms after it
offered to drop two other
sites from the deal.
3
The Sunday Times August 27, 2017
BUSINESS
EasyJet bosses
in battle for
McCall pilot seat
Sabah Meddings
Internal candidates are said
to be vying for the soon-to-bevacant chief executive’s seat
at easyJet.
Ahead of the departure of
Dame Carolyn McCall, who is
leaving for ITV, some jostling
for position is taking place,
according to industry
sources.
The budget airline’s chief
operating officer, Chris
Browne, previously at Tui
Travel, is thought to be a
frontrunner, as is Peter Duffy,
its chief commercial officer.
City sources speculated
that a dark-horse contender
could emerge from the
boardroom: Andy Martin, a
former chief operating officer
of Compass, is one of
easyJet’s non-executive
directors.
McCall, who has been at
the helm of the airline for
seven years, announced last
month that she was leaving to
replace Adam Crozier as chief
executive of ITV. She is due to
start her new role at the
broadcaster in January.
EasyJet chairman John
Barton is in the early stages of
searching for her
replacement and is expected
to consider external
candidates as well as the
contenders on the internal
succession plan.
The company that controls
the New York stock exchange
has hired leading investment
bankers to sell a British
energy trading business said
to be worth up to £500m.
Intercontinental Exchange
(ICE) is said to be working
with Goldman Sachs on the
disposal of Trayport — a
London-based software
developer that connects
traders, brokers and
HOTEL CHOCOLAT HEADS EAST
Browne, 57, joined the
board as a non-executive
director early last year and
became chief operating
officer in October. She was
formerly managing director
of Thomson Airways and
chief operating officer of
aviation at Tui.
Duffy, who joined easyJet
in 2011 as marketing director,
was previously UK marketing
director for Audi.
If Martin, 57, is chosen to
fill the top post, it will be his
first executive role since
leaving the catering giant
Compass in 2015.
Other insider candidates
could include Moya Greene,
who joined the board last
month. The 63-year-old is
chief executive of Royal Mail.
A cocktail of challenges
awaits whoever succeeds
McCall, 55. The slide in the
value of sterling since the EU
referendum delivered a blow
to easyJet’s first-half results. It
posted a £212m loss, £82m of
which was blamed on the
weaker pound.
The Luton-based airline,
which employs 6,000 people
in the UK, has announced it
will set up an Austrian
headquarters to operate
flights within the EU.
It is planning to launch a
separate airline, called
easyJet Europe, to operate
the Vienna-based network.
NYSE owner lines up
sale of energy trader
Ben Harrington
RICHARD POHLE
businesses to the energy
market’s electronic trading
systems. It handles about 75%
of European utilities trades.
The Trayport sale follows a
dispute with the Competition
and Markets Authority (CMA)
over ICE’s ownership of the
business. Last October the
authority ordered ICE to sell
it, immediately after it had
been bought from brokers
BGC and GFI for $650m
(£500m).
ICE declined to comment.
Video game makers
under pressure
over ‘skins’ betting
Daniel Dunkley
Sweet move: Hotel Chocolat’s boss Angus Thirlwell plans to open shops in Hong Kong
Angus Thirlwell, the chief
executive of Hotel Chocolat,
is taking his upmarket brand
to Hong Kong in what is the
chocolatier’s first foray
outside Europe, writes
Sabah Meddings.
The 54-year-old, who
opened his first store in
Watford in 2004, has inked a
deal with a local partner in the
former British colony to roll
out a small chain of shops.
Thirlwell said the
expansion, which is being
financed by cash flow, will be
a test case for further shops
across Asia.
“In London, we were
getting a high proportion of
Asian people buying a lot of
products and stuffing them
into their suitcases to take
home,” said Thirlwell, who
listed the company in London
in May last year. “This is the
beginning of what will be
potentially a huge market.”
Hotel Chocolat has 93
shops across the UK and three
MP who pursued Green
snubs new Topshop chief
Oliver Shah
The Labour MP who pursued
Sir Philip Green over the BHS
pensions scandal has refused
to meet the new chairman of
the billionaire tycoon’s
Topshop empire.
Frank Field, who jointly
chaired the parliamentary
inquiry into the department
store’s collapse, has declined
a meeting with Baroness
(Karren) Brady, who replaced
Lord Grabiner as chairman of
Arcadia Group last month.
Brady wrote to Field in July
after he accused Green of
using the House of Lords as “a
recruitment agency for his
companies” and said Brady
was “paid to be on the board
of Taveta [Arcadia’s holding
company] during the
dreadful shenanigans that led
to the closure of BHS”.
Brady’s letter was sent
through the PR department
of West Ham football club, of
which she is vicechairwoman. It said: “She
plans to fully restructure the
Taveta board and is planning
Uber back to
classroom
for lessons
in detoxing
Danny Fortson
San Francisco
Uber, the poster child for
Silicon Valley’s toxic “bro”
culture, has been taken
back to school.
Frances Frei, a respected
company doctor lured from
Harvard Business School in
June, has created a universitystyle course in “management
skills, feedback and
goal-setting”. She said it was
“completely customised” for
the troubled company.
Frei has already taught
10,000 of Uber’s 15,000
Topshop allies: Philip Green and Karren Brady
to appoint two new nonexecutives to help drive her
plans forward. She would be
very pleased to meet with you
next week . . . as she is certain
that she will be able to
provide you with the
confidence in the group that
you are seeking.”
Brady has been a nonexecutive director of Taveta
since 2010. The message
sought to distance her from
the BHS fiasco on the basis
that it was sold to Chappell by
a subsidiary of Taveta rather
than by Taveta itself.
Field said he declined to
meet Brady because his work
and pensions select
committee, which is being
reconstituted following the
election, might want to call
her to give evidence at some
direct employees and is
planning another curriculum
for managers. “It is like a
Harvard Business School
class suited for hyper-growth
companies. That’s what I’m
trying to do, and the
employees are enormously
receptive to it,” she said.
Uber has had a horrible
year that has included sexual
harassment scandals, the
ousting of chief executive
Travis Kalanick, a civil war
among investors and a bitter
legal battle between key
shareholder Benchmark
Capital and Kalanick.
The board is closing in on
either Jeff Immelt, formerly of
GE, or a dark horse candidate
as successor to Kalanick. A
final decision is expected
next month.
Spotify
grilled over
cut-price
listing
Keeping Uber on the
straight and narrow, page 6
Crackdown
on gamers’
gambling
Danny Fortson
Spotify has been called in by
regulators to explain its
controversial plan for a New
York listing.
The move, which could
happen by the end of the
year, is likely to be the largest
tech float since the $24bn
(£18.6bn) market debut by
Snapchat’s parent company
in March.
Spotify, the world’s largest
music-streaming company
was valued at $8.5bn in 2015,
when it last raised venture
capital funding.
point. He said: “I’d be really
happy to talk to her in the
committee room, but I don’t
want any cosy deals, or any
thought of that.”
He said the argument that
she was not on the board of
the Taveta subsidiary that
sold BHS was akin to “a street
magician moving cups and
dice around”.
Grabiner resigned from
Taveta after MPs said his
“complacent performance”
was the “apogee of weak
corporate governance” for
his lack of oversight of
Green’s £1 BHS sale.
BHS was bought by
Dominic Chappell, a former
bankrupt, who ran it for little
more than a year before it
went bust with a £571m hole
in its pension fund. After nine
months of wrangling, in
February Green paid up to
£363m to settle the issue with
the Pensions Regulator.
Brady, 48, who started in
advertising sales, became
managing director of
Birmingham City football
club when she was 23.
However, it has eschewed
a traditional float and
instead plans a direct listing,
a system used mostly by
small companies.
The US Securities and
Exchange Commission last
month demanded a meeting
with Spotify to understand
better how the deal will be
structured.
Direct listings are far
cheaper because they require
no investment banks or
underwriters to set a stock
price, and new shares have to
be issued or sold.
Spotify, founded in 2006 in
Sweden, has more than 60m
paying subscribers yet last
year posted a €539m loss on
€2.9bn turnover. It is under
pressure to go public because
some backers are keen to
realise a return after sitting
on their investments for
nearly a decade.
outlets in Copenhagen, along
with a boutique hotel in the
Caribbean. It has already
announced plans to expand
into Ireland.
Its partner in Hong Kong,
B&S, has built a reputation in
retail after opening a series of
teashops in Taiwan, according
to Thirlwell.
“In Asia, it’s all about retail
expertise on the ground,”
he added. “We’ve been really
pleased with the way they’ve
launched the store.”
The betting industry’s chief regulator has
pledged a crackdown on illegal gambling
sites linked to popular computer games
after a surge in black-market activity.
Sarah Harrison, head of the Gambling
Commission, has revealed that “skins”
betting — using computer-game currencies and upgrades to gamble for real
money — is a priority for the regulator.
An illegal betting market estimated to
be worth $5.1bn (£4bn) a year globally has
emerged from the in-game credits, which
are popular with underage punters.
One in five of the illicit operations shut
down by the watchdog since 2014 facilitated “skins” betting, said Harrison.
“They are parasites off the back of wellestablished gaming platforms,” added
the commission’s chief executive.
“Adopting a Whac-A-Mole strategy
may not be the most effective way of tackling the problem. Our strategy is to attack
these businesses from every angle, to isolate and starve them,” she said.
Harrison called on games operators to
“recognise their responsibility” in tackling the issue, and said pressure would be
put on payments handling companies to
cut their partnerships with illegal sites.
Much of the skins betting market is
linked to the popular game Counter
Strike: Global Offensive (CSGO), which
has sold more than 25m copies worldwide. It has a platform where players can
trade skins, but illicit websites have also
sprung up offering the chance to gamble
the skins for real money.
Valve Corporation, which makes
CSGO, has pledged to shut down the
rogue operations.
There are more than 100 skins gambling sites, according to research by
Eilers & Krejcik Gaming and Narus Advisors, which put the value of the market at
more than $5bn last year. The study
showed about 45% of skins were bet on
esports — tournaments between professional gamers broadcast online. About
38% went on lottery or roulette-style
games unrelated to the games in which
the skins feature.
Young players have been caught up in
the phenomenon too. John Carr of the UK
Council for Child Internet Safety said parents of children as young as 11 had been in
contact about the sites. “To discover a
child aged 11 is spending their pocket
money on gambling, using their parents’
debit card, was distressing,” said Carr.
The popular Fifa game series has also
been dragged into the debate. In February, the Gambling Commission prosecuted Craig Douglas, a well-known YouTuber, and his business partner for
running a website that offered the chance
to bet with Fifa’s in-game currency.
More prosecutions are believed to be
under way. Concerns about computergame betting are due to be discussed
at the European parliament as part of a
special event on September 6.
Tech Bubble, page 10
PROBLEM PUNTERS
More than 430,000 people in Britain
have a serious gambling problem —
50% higher than five years ago.
About 550,000 people are
moderate-risk punters while 1.4m are
considered low risk, according to a
report released by the Gambling
Commission last week.
The figures come as the
government prepares to publish a
review of the industry. It is likely to
recommend strict new measures
to limit spending on fixed-odds
betting terminals in high street
bookmakers. The review, due in
October, is also expected to
address concern about the level of
gambling advertising on television.
Betting companies have warned
that a tough clampdown could
reduce tax revenues by £1bn. But
Tim Miller, an executive director of
the commission, said: “The pace of
change to date simply hasn’t been
fast enough — more needs to be
done to address problem gambling.”
Coming next week
The MBA
List 2017
The definitive guide to the
top degree for business
PUBLISHED ON SEPTEMBER 3 WITH THE SUNDAY TIMES
4
The Sunday Times August 27, 2017
BUSINESS
The truth behind the EU’s City power grab
Iain Dey Agenda
L
et me bring you in on a little
secret. Parts of the City of
London’s “plumbing” — the
valuable clearing infrastructure
that underpins Britain’s role at
the heart of global finance —
have already decamped to the
eurozone. It happened without
anyone much noticing. And for very
understandable reasons.
The clearing system is not really
“plumbing” at all. Thanks to reforms
imposed after the financial crisis, it has
evolved into the insurer of global
finance. It is a risk-management
business, not a collection of pipes or
electrical wires.
About $540 trillion (£420 trillion) of
derivatives are cleared through London
thanks to regulatory moves to push
almost all such trades on to exchanges.
What the clearing system does is ensure
there’s a safety buffer built into global
trading. If someone goes bust, there is
some oil on the wheels of international
finance that keeps things moving for
long enough to sort out problems. As a
by-product of all this, the clearing
system has become the ultimate arbiter
of credit-worthiness — countries as well
as companies. If you are responsible for
taking risk out of the system, you need to
make constant assessments of what
those risks are.
The Greeks, Spaniards, Italians, Irish,
Portuguese and French know only too
well that the clearing system controls
their destiny.
In 2011, when the world genuinely
believed the euro was going to fall apart,
the London Clearing House (LCH) was
forced to react to the falling value of
European sovereign bonds. Where those
bonds had been used as collateral on
other trades, the LCH insisted traders
put up cash to fill the hole.
This was 100% in accordance with
what the world had just agreed should
be done as part of its response to the
financial crisis. Yet it was not exactly
popular at the time.
A number of European countries
believed (with good reason) that the
margin calls simply added to selling
pressures on their bonds, exacerbating
the fall in the price — which then started
to create problems for banks in those
countries. Extraordinary pressure was
exerted on the LCH at the time. Yet it
stuck to its task of preserving the overall
health of the system. Nobody on the
Continent has forgotten about this
recent near-death experience.
There was a particularly loud noise
about the pressure exerted on Italy by
the LCH. And who had only recently left
his post as governor of the Bank of Italy
at the time? Mario Draghi, president of
the European Central Bank.
At the time this crisis erupted, much
of the clearing of repo trades where
eurozone sovereign bonds were used as
collateral took place in London. Now
that business is handled through the
LCH’s business in Paris, which is
regulated like a bank.
This business of trading around
European sovereign debt is only a tiny
part of securities worth $540 trillion
cleared in London. About 95% of that is
the global market in interest rate swaps.
Nonetheless, the fervour of countries
determined to ensure London’s
importance in handling these affairs is
diminished is infused with the painful
memories of what happened to
sovereign bonds. Michel Barnier, the
EU’s chief negotiator, knows about this
stuff. He was influential in creating this
infrastructure. Attempts to get control of
it are not just about biffing David Davis
on the nose. They’re about power.
Dixons Carphone
350p
300
250
200
150
Jun
Jul
Aug
Source: Thomson Reuters
The Continent has
not forgotten
about this neardeath experience
Dixons dilemma
Ahead of Apple’s last set of results,
analysts were braced for a sharp
slowdown in iPhone sales. The latest
version of the ubiquitous smartphone is
going to be bigger and better than ever,
according to Silicon Valley gossips.
There was an expectation, therefore,
that customers would hold off replacing
their phone to get the iPhone 8.
Those fears did not really came to
pass for the world’s biggest company.
Apple shifted 41,026 iPhones in the third
quarter — 627 more than in the same
period last year.
Nonetheless, this exact problem of
deferred purchases was what Dixons
Carphone blamed last week for a
slowdown in trading that prompted a
shock profit warning — one that wiped
a third from its shares.
Seb James, the usually ebullient chief
executive, blamed the fall in sterling for
adding to the broader consumer
malaise. Thanks to the Brexit-induced
slide, handsets of all brands have
become more expensive — prompting
everyone to think twice about upgrades.
Consumers are definitely feeling the
pinch of the weakened pound. Squeals
of pain are emanating from all corners of
the high street. Yet one cannot help but
wonder whether the real problem was
simply that expectations had got a little
ahead of themselves.
James, rumoured to be eyeing jobs
elsewhere after being linked to the ITV
chief executive post, appears to have
been quite happy with his City fan club.
Every slide in the share price has been
seen as a reason to print another “buy”
note, based on the ever-cheaper stock.
Trading at five times earnings, with a
6% dividend yield, it is tempting to make
that argument again. By Christmas we
should have a clearer picture.
iain.dey@sunday-times.co.uk
Sliding sterling is a cause for
alarm, not celebration
Nafta’s a done deal,
China anything but
Stephen King Economic Outlook
Irwin Stelzer American Account
T
here’s something gloriously
inconsistent to be found in the
stage-managed arguments of
Professor Patrick Minford, the
chairman of Economists for
Free Trade.
In the introduction to his
paper, entitled From Project
Fear to Project Prosperity, Minford
argues that the post-Brexit economy
can only succeed through competition —
and that jobs need to be lost in
uncompetitive industries.
Yet he welcomes sterling’s postreferendum decline, claiming that “this
has greatly boosted manufacturing
profits and provided a cushion, which
we believe could well last five or 10
years, during which productivity
adjustment can take place”.
A falling exchange rate has rarely
opened up a path to prosperity. Too
often, it has merely allowed bad
competitive habits to fester — by virtue
of the “cushion” to which Minford
refers.
For those exporters who, for
whatever reason, happen to be
inefficient and unproductive, a drop in
sterling is like manna from heaven; the
profits of their creaking businesses are
given a temporary shot in the arm.
Rather than playing their part in
building a “dynamic modern economy”,
as Minford advocates, the inefficient and
unproductive can take full advantage of
a sterling decline to squeeze in a round
or two of golf on a Friday afternoon,
before downing a couple of gin and
tonics at the 19th hole.
Odd, then, to argue that a sterling
decline is the easy route to a future
productivity nirvana when it helps
preserve the very jobs he rails against.
Those who think that a sterling
devaluation is the answer to the UK’s
Brexit challenge have doubtless been
cheered by the pound’s further
precipitous decline over the past week.
Having reached an eight-year low
against the euro, it is not a million miles
away from parity (at airports, it has
already got there). Against a US dollar
that itself is hardly buoyant, sterling
continues to slide.
Recent currency developments are no
cause for celebration, however. Sterling
is falling because investors in the foreign
exchange markets fear that Brexit will
make Britain worse off. In other words,
sterling’s decline is a consequence of
feared economic weakness, not a cause
of future economic strength.
Admittedly, there have been periods
in the past when a major sterling decline
was followed by a subsequent sustained
economic improvement. Over the past
100 years, the most striking examples
are the UK’s departure from the gold
standard in 1931 and sterling’s exit from
the European exchange rate mechanism
(ERM) in 1992.
Yet the improvements that followed
had less to do with the rekindling of
export-led growth and more with
domestic fiscal and monetary stimulus.
With world trade and global financial
flows collapsing in the early 1930s, the
UK’s economic revival following its exit
from the gold standard depended more
on a domestic housebuilding
programme, not an export revival.
Having had to keep interest rates at
astronomical levels in the early 1990s
(thanks to the higher borrowing costs
within the ERM that were a direct
consequence of German reunification),
sterling’s 1992 devaluation was followed
by tumbling interest rates and a pick-up
in domestic demand.
A falling exchange
rate has rarely
opened up a path
to prosperity
In both cases, escaping from the
straitjacket of an international monetary
system gave the UK the space to pursue
its own domestic agenda.
Because we never joined the euro,
today there is no equivalent straitjacket
to escape from. The adjustment in the
exchange rate is being required to do too
much of the hard work in terms of
stimulating the economy.
It is not obvious that the exchange
rate can easily serve this purpose. In the
modern era, global supply chains hugely
undermine the idea that “British”
products compete with “French” or
“German” products. Look at the Mini, a
car stuffed full of components sourced
from all over the EU. The “I’m Backing
Britain” campaign of the late 1960s was
fairly silly at the time but would be
ridiculous today. The Mini, like so many
British “brands”, is the end product of a
global or regional assembly line.
To the extent that the exchange rate
might play a role in these circumstances,
it’s likely to influence the decisions of
multinationals to invest in the UK rather
than in, for example, France or Poland.
Put simply, the lower the value of
sterling, the cheaper (and poorer) are
British workers in euro or zloty terms.
This argument only works if
multinationals are worried mostly about
price. If, instead, they’re focused on
access to the European single market,
with its multitude of standards and
regulations — otherwise known as nontariff barriers — it’s not at all obvious that
price will be the defining factor.
What matters is the ability to function
within a common regulatory
environment. Companies operating in
the UK but outside the single market
may no longer easily be able to do so.
The temptation will be to go elsewhere.
No amount of exchange rate decline (or,
for that matter, “unilateral free trade”) is
likely to be enough to compensate for
this uncomfortable truth.
Now consider the story from a
continental European perspective. If a
major sterling decline is likely to be so
good for the UK, it is presumably rather
DECLINE ...
Euro-sterling exchange rate
€1.8
1.7
1.6
1.5
1.4
1.3
1.2
1.1
1
2000
2005
2010
2015
Source: Thomson Reuters
... AND FALL
Dollar-sterling exchange rate
$10
8
6
4
2
0
1800
Source: Bank of England
1825
1850
1875
1900
1925
1950
1975
2000
bad for our competitors. After all, when
it comes to exchange rates, the overall
story typically ends up being a zero-sum
game. So is the eurozone quaking with
fear, given sterling’s precipitous drop?
Far from it. Eurozone economic
growth is now double that of the UK.
More important, those eurozone
countries that went through economic
upheaval during the sovereign debt
crisis have managed to rebalance their
economies despite their membership of
the single currency, and hence their
inability to devalue.
Admittedly, the process wasn’t
pleasant: wage cuts, fiscal austerity and
sheer hard graft are hardly the most
enticing of ingredients. Nevertheless,
their exports are doing well, their
economies are expanding once again
and their balance of payments positions
have improved dramatically.
Compare that story with the UK’s
recent history. Unlike our European
neighbours, the UK experienced a huge
exchange rate devaluation in 2008. The
idea was to rebalance the economy away
from debt-fuelled consumption towards
an export-led utopia that would once
and for all put to bed our recurrent
balance of payments problems.
All too predictably, however, the
balance of payments deficit got bigger,
not smaller; the initial competitiveness
gains associated with sterling’s fall were
squandered as productivity growth
slumped; and, to the extent that the UK
now has any growth to speak of, it once
again depends on the willingness of
consumers to spend more, and save less,
of what they earn.
Sterling’s decline will play a role, but
not the one envisaged by those who
think it is the economic equivalent of a
“get out of jail free” card. By raising
import prices and, hence, headline
inflation, a weaker pound serves to
squeeze people’s so-called “real
incomes”. In other words, it makes us
worse off.
That, sadly, is as it should be. Over the
years, the UK has managed to fund a
relatively large balance of payments
deficit thanks not only to the rule of law,
the English language, the convenient
time zone and good corporate
governance, but also to the UK’s
membership of the European Union.
Companies invested in the UK precisely
because Britain was part of the single
market; we attracted large investment
inflows from abroad as a result. Now that
our relations with the EU have been
compromised, there’s a good chance
those inflows will decline. That, in turn,
means we can no longer fund a large
balance of payments deficit so easily.
Yes, of course we’d all like to export
our way out of the problem, but, in the
absence of a magic wand, that’s not
likely to happen, particularly given the
UK’s repeated inability to make
significant inroads into emerging
markets. Instead, sterling’s decline will
be associated with (temporarily) higher
inflation, lower real incomes and
slowing demand. Put another way, the
UK’s balance of payments will adjust not
through higher exports but, instead,
through lower imports.
We’ve had Project Fear. We’re now
being offered Project Prosperity. When it
comes to sterling, however, maybe it’s
time to wake up to Project Reality.
David Smith is away
Stephen King is the author of Grave New
World: The End of Globalization, the
Return of History. He is HSBC’s senior
economic adviser
C
ircuses feature sideshows and
main events. So it is with the
circus that performs daily at
the Trump White House when
it comes to trade policy. The
sideshow currently on offer is
the renegotiation of the 1994
North American Free Trade
Agreement (Nafta) that creates a more or
less free trade area encompassing
Mexico, Canada and the United States.
The negotiators are hard at it, with the
US demanding revisions that create
more American jobs, the Mexicans
fighting to keep the huge American
market open to their goods, especially
automobiles, and the Canadians — well,
their latest demand is that new chapters
be inserted to reflect the leftish Trudeau
government’s “commitment to gender
equality and . . . improving our
relationship with indigenous peoples”.
All trade agreements create winners
and losers, and Nafta is no different.
Now the losers — mostly trade unions
and the workers they represent — want
to become winners by changing rules
that favour “exploitative sweatshop jobs
in Mexico”, while the winners — farmers
and the auto industry — want to avoid
becoming losers. President Trump says
he doubts that a new deal to replace “the
worst deal in history” can be reached, in
which case the agreement will be
terminated.
That’s what ousted strategist Steve
Bannon and a good part of Trump’s
(shrinking) base are demanding. Yet the
reality is that termination would disrupt
the auto industry’s supply chain, badly
hurt farmers in states won by Trump and
violate the first guiding principle laid out
by commerce secretary Wilbur Ross:
“Do no harm.” Instead, there will be a
deal that allows Trump to claim the
creation of new jobs while keeping US
corn, soybeans, rice, wheat and other
farm commodities flowing south to
Mexico; beef and pork moving north to
Canada; Canadian oil flowing south to
US refineries; and products from the
maquiladoras that dot the Mexico side of
the border moving north.
So much for the sideshow. On to the
main event: section 301 of the US Trade
Act of 1974. That little-used provision
authorises the president to “take all
appropriate action . . . to obtain removal
of any [trade] practice that is unjustified,
unreasonable or discriminatory, and
that burdens or restricts US commerce”.
US trade representative Robert
Lighthizer has launched an investigation
to determine whether China’s policies
towards intellectual property (IP) are in
violation of section 301.
China has announced a $300bn
(£233bn) plan to assure that it becomes
self-sufficient — with 80% of the
domestic market to go to Chinese firms —
and attains global leadership in 10
industries by 2025. Premier Li Keqiang
told the National People’s Congress
those industries would include artificial
intelligence, integrated circuits,
biopharmacy, 5G mobile
communications, robots and electric
cars, among others. Low-end
manufacturing is to be phased out.
The encouragement of the targeted
industries will take three forms. First,
Beijing will provide low-interest loans,
subsidise research and finance the
acquisition of foreign high-tech firms.
Second, it is requiring foreign firms that
want to do business in China to turn over
their IP to a Chinese partner in return for
access to China’s enormous market.
Third, China will continue to steal all the
American IP it can get its hands on. A
report by the Commission on the Theft
of American Intellectual Property puts
the annual value of stolen IP, counterfeit
goods, pirated software and stolen trade
secrets as high as $600bn, with China
“the world’s principal IP infringer”.
That’s 3% of US GDP being hijacked
every year.
Trump, no instinctive free trader,
could ordinarily be counted on to move
quickly to “retaliate”, presumably by
imposing swingeing tariffs — he often
mentions a figure of 45% — on goods
from China. China’s ministry of
commerce says a trade war “would harm
both sides”. True, but not equally.
A new report by the non-partisan
Conference Board, a New York-based
think tank, reckons China would be the
loser. US exports to China account for
only 0.7% of our national economic
Stolen IP costs us
$600bn a year,
with China the
worst infringer
output, while Chinese exports to the US
amount to roughly 3% of its GDP. “A
trade war between the US and China . . .
doesn’t appear to be a major threat to
the US economy,” says Erik Lundh, a
senior economist on the board. And it
would be a major threat to China, which
is heavily dependent on exports to keep
its economy moving at its target growth
rate of about 7%.
The problem is Trump can’t make
a decision “as seen through these data”.
In his first truly presidential speech last
week, announcing a continued
commitment to Afghanistan that ran
contrary to “my instincts” — instincts
such as those that produced the threat of
45% tariffs — he said: “Decisions are
much different when you sit behind the
desk in the Oval office . . . when you’re
president of the United States.”
Trump needs China’s help to rein in
North Korea before Kim Jong-un
develops the ability to mount nuclear
warheads on his intercontinental
ballistic missiles, and is getting at least
some co-operation. China has cut its
exports of petrol to North Korea by 90%,
and voted for (porous) UN sanctions on
the regime. While Trump awaits the
results of his trade representative’s
report, American firms, among them
Apple, Intel, Qualcomm and IBM,
continue to turn over their IP to China in
the hope, forlorn in all likelihood, of
getting a durable piece of its market.
Unlike President Xi Jinping, they are
not students of Lenin, who famously
said, “The capitalists will sell us the rope
with which to hang them” — and the IP
with which to dominate them.
Irwin Stelzer is a business adviser
5
The Sunday Times August 27, 2017
BUSINESS
The Whale, Goldmans
and the missing billions
A manhunt for the
playboy financier
behind the 1MDB
scandal is gathering
pace, writes Philip
Sherwell in Bangkok
GILBERT CARRASQUILLO / JOSHUA PAUL / PARAMOUNT PICTURES / SUPERYACHT TIMES
W
ith its opulently furnished staterooms and
ice buckets brimming
with chilled magnums
of Cristal champagne,
the superyacht Equanimity once enjoyed a
reputation for bacchanalian bashes attended
by Hollywood stars
and supermodels.
Yet the $250m 300ft vessel is now
believed to be idling in the azure waters
off a remote Cambodian island, with no
guests for the crew to entertain and no
sign of its flamboyant party host.
The colossal floating pleasure palace
has been quietly biding its time in the Gulf
of Thailand since June, according to sightings recorded on marine tracking websites. The timing of its arrival there was
almost certainly no coincidence. For that
was the same week the US Department of
Justice listed the Equanimity among
assets for seizure in one of the most spectacular embezzlement and money-laundering investigations in history.
Nor is it just the behemoth of a boat
that has disappeared off the radar — so
has its reputed owner, a podgy Malaysian
playboy dubbed “the Whale”.
Low Taek Jho, a former British public
schoolboy known as Jho Low, is as elusive
now as he was previously ubiquitous,
when he used the yacht to entertain
celebrity chums such as Leonardo DiCaprio and to woo the model Miranda Kerr.
The 35-year-old financier is now the
central figure of investigations on three
continents into the affairs of 1Malaysia
Development Berhad (1MDB), a Malaysian sovereign wealth fund established by
Najib Razak, the country’s patrician
prime minister and a Low family friend.
About $4.5bn is alleged to have been
siphoned off from 1MDB by top Malaysian
officials and their associates, say American investigators. And this month, new
US court filings revealed that the justice
department had escalated its investigation from a civil probe to a criminal one.
That development upped the stakes in
a saga that has the all the plot twists and
characters of a Hollywood movie. So it is
no little irony that misappropriated 1MDB
funds are also alleged to have bankrolled
the defining recent film about financial
fraud and greed — The Wolf of Wall Street,
starring DiCaprio.
The Martin Scorsese movie was
financed by Red Granite Pictures, a Los
Angeles production firm co-owned by
Najib’s stepson, Riza Aziz, who forged a
friendship with Low when the two boys
were at Harrow School together.
Low’s whereabouts are not known and
he may be travelling on Malaysian documents or his passport from St Kitts and
Nevis, the tiny Caribbean nation where
citizenship can be bought for as little as
$250,000. In Asian financial circles, the
word is that he is dividing his time
between China, his ancestral homeland,
and Taiwan, where he was once a frequent visitor as he courted a pop star.
Significantly, neither reported hideout has an extradition treaty with America, where the scandal-tainted 1MDB is
being doggedly investigated. He doubtless also wants to avoid Singapore, where
prosecutors have already secured five
convictions for 1MDB-related misdeeds.
Low is rumoured to be involved in
back-channel talks with the US investiga-
1MDB was set up by Najib Razak; Leonardo DiCaprio in The Wolf of Wall Street
Stormy waters: superyacht Equanimity is listed among assets for seizure
Low Taek Jho, seen with singer Alicia Keys in 2013, is accused of lavishing embezzled 1MDB funds on celebrity friends
tors, possibly to protect relatives who
were involved in his business operations.
US sources have said he is expected to
face charges. Low, 1MBD, Najib, Riza and
Red Granite have all consistently denied
any wrongdoing.
The justice department is also looking
into the role of Goldman Sachs, the Wall
Street giant whose Asian operations
advised 1MDB. Tim Leissner, the veteran
banker who handled Goldman’s relationship with the fund, resigned in February
2016. Leissner, an ex Coutts and Standard
Chartered banker who is married to the
reality TV star and fashion designer
Kimora Lee Simmons, has been banned
for 10 years by the Monetary Authority of
Singapore over the 1MDB affair.
Civil lawsuits lodged in America for the
seizure of assets worth $1.7bn have
revealed how Low allegedly lavished
embezzled 1MDB funds. In the latest filings in June, the Equanimity appeared on
the list, as did the rights to two Red Granite film comedies, Dumb and Dumber To
and Daddy’s Home.
And then there were the gifts. Among
the presents showered by Low on Kerr,
reportedly at one time his fiancée, was a
Valentine Day’s token: a heart-shaped
12-carat diamond pendant. She received
other expensive baubles when the two
were on board the Equanimity.
DiCaprio was the recipient of paintings
by Pablo Picasso and Jean-Michel Basquiat, as well as one of the Oscar statuettes won by actor Marlon Brando, given
to DiCaprio by Red Granite to thank him
for his work.
DiCaprio and Kerr, who in May married billionaire Snapchat co-founder
Evan Spiegel, were quick to hand the gifts
to the authorities and there is no suggestion of any wrongdoing on their part.
The suit also said that Low bought a
22-carat pink diamond necklace worth
$27.3m for the wife of “Malaysian Official
No 1”. American and Malaysian sources
have confirmed the wording refers to
Najib, whose wife, Rosmah Mansor, has a
reputation for expensive tastes.
In an earlier suit, the justice depart-
ment targeted luxury apartments in New
York, a private jet, a Beverly Hills hotel,
more artworks and film rights for The
Wolf of Wall Street.
In a statement issued by a representative, Low criticised the latest US lawsuit
as “a further example of global overreach
in pursuit of a deeply flawed case . . .
despite not having proven that any
improprieties have occurred”. In
response to the Singapore investigation,
the representative said: “No wrongdoing
has been proved in any jurisdiction.”
And in another unusual turn, the US
government asked for a stay on its own
civil lawsuits. Its lawyers said pursuing
the seizures at this time could hamper a
criminal investigation — thereby revealing that one was under way.
Low was born into money. His Cantonese grandfather established the family
fortune through mining and distilleries,
and his father bolstered the wealth with
savvy real estate dealings.
Low was a boarder at Harrow and later
graduated from Wharton School in Penn-
sylvania, a prestigious business school
whose alumni include Donald Trump.
The nickname of “the Whale” was
acquired when he burst into the New
York gossip columns, picking up the tab
at expensive nightclubs for his whole
entourage, including the likes of heiress
Paris Hilton and actress Lindsay Lohan.
He was also widely believed to be the
anonymous buyer who laid out $141m for
Picasso’s Women of Algiers — at the time,
the most paid at auction for a painting.
Low’s extravagant partying first made
news in 2009, the same year Najib established 1MDB. The fund was supposed to
foster economic development through its
investments, but instead investigators
allege that a few people became rich
beyond their dreams while the government-owned body amassed huge debts.
1MDB and Low have always been at
pains to insist they had no formal relationship. Yet according to American and
Singaporean investigators, the flash
young financier was acting as a key intermediary for lucrative deals with Gulf
partners flush with petro dollars.
The fund was soon laden with debts
that reached $11bn. And damning allegations started to emerge via the whistleblower website Sarawak Report, run by
Clare Rewcastle Brown, sister-in-law of
former prime minister Gordon Brown.
Her digging so infuriated Najib that his
government blocked the site and issued
an arrest warrant for the London-based
journalist. A request by officials that
Interpol enforce it was turned down.
During early Malaysian investigations
into 1MDB, which Najib oversees as
chairman of the advisory board, an
extraordinary detail emerged. Mystery
payments totalling $680m had been
deposited in the prime minister’s personal bank accounts. He denied any per-
sonal gain from what he later said was a
donation from unnamed Saudi royals for
political use by his ruling party.
The prime minister sacked an attorney-general who was investigating the
matter, axed doubting cabinet members
and cracked down on questioning media.
The new attorney-general, a Najib loyalist, found there was no case to answer,
but the prime minister has been unable
to quieten the clamour from anti-corruption campaigners and political foes.
Indeed, Mahathir Mohamad, the veteran ex-prime minister who was once
Najib’s political mentor, has at 92
emerged as leader of an opposition coalition and regularly savages his former
protégé. At a recent forum called by
Mahathir to discuss 1MDB, flares and
chairs were hurled by unidentified troublemakers and narrowly missed him.
With elections expected this autumn,
speculation that Low is talking to
investigators has only fuelled the febrile
atmosphere. “The news is likely to strike
horror and dismay into the heart of the
Najib administration in Malaysia,” said
Rewcastle Brown on Sarawak Report.
However, Najib received a boost last
week when Trump invited him to visit the
White House next month, even as US
investigators trawl through the dealings
of the embattled fund that he oversees,
including monies allegedly paid into the
bank accounts of “Malaysian Official 1”.
1MDB, meanwhile, remains mired in
scandal and debt, and has needed an
extension to make a payment of $600m
to an Abu Dhabi sovereign wealth fund.
Equanimity means composure during
times of crisis, but in these stormy times
for Jho Low, it does not seem the yacht
bearing that name will be cruising calmly
back into to its former role as his party
boat any time soon.
Provident’s leap into the future ends in the abyss
Aimee Donnellan
Peter Crook was plotting a
revolution. In February, the
boss of door-to-door lender
Provident Financial
announced plans to ditch
his 4,500-strong army of
self-employed agents. The
part-time debt collectors,
who also drummed up new
business, often from friends
and neighbours, would be
replaced by iPad-wielding
full-timers earning a salary
rather than commission.
Crook wanted a bettertrained team to drag the
137-year-old business, which
he had built into a FTSE 100
stalwart, into the 21st century.
“The model of having
self-employed agents has
served us well,” said Crook as
he unveiled a 14.1% jump in
annual profit. “But there is
more than one way to run this
type of business . . . and the
development of technology
has allowed us to conclude
that we can actually run this
business in a more efficient
and a more effective way.”
Six months later, that
modernisation drive has
brought Provident to its
knees. Last week “the
Provvy” revealed that
technology troubles had
resulted in its debt-collection
rate diving by more than a
third. The Bradford-based
company cancelled its
Provident Financial
£35
30
25
20
15
10
5
0
S ON D J F M AM J J
Source: Thomson Reuters
interim dividend, issued its
second profit warning of the
year and announced that one
of its banking products was
under investigation by the
City watchdog.
Crook, 54, resigned after
more than a decade as chief
executive. He was UK
managing director of
Barclaycard before joining
the company.
Last week’s announcement
proved apocalyptic.
Provident, which provides
credit cards and loans to 2.4m
of the poorest people in
Britain, suffered one of the
largest one-day falls for a
FTSE 100 company. The
share price dropped 66%,
wiping more than £1.7bn off
the market value.
Through two world wars
and the 2008 financial crisis,
Provvy agents kept knocking
on doors to make and collect
small loans. Yet it was
brought to the brink by a
technological revolution of its
own devising.
“Provident has been
damaged by a fundamental
change in the way its business
works,” said Justin Bates, an
analyst at the investment
bank Liberum Capital. He
sees a 95% chance of
Provident’s home collection
division being wound down.
Many of the original agents
were offered the chance to
apply for the new full-time
role of customer experience
manager, which suited some
but not others. More than 350
have been poached by rival
lender Non-Standard
Finance, founded by John van
Kuffeler, Provident’s former
boss. Most importantly, they
bring with them lucrative
potential new leads.
The Provvy’s new 2,500strong team, half of whom
had no previous relationship
with their customers, relied
on iPads that plotted each
Peter Crook: £1.7bn wiped
off company’s market value
day’s meetings on a map.
They could be given 50
customer visits a day to
complete, which equated to
roughly four minutes for each
of them, according to
industry sources.
“That simply doesn’t
work,” said a senior industry
figure. “Sometimes you’ll
knock on the door and a
woman will be in floods of
tears because her daughter
has been taken to hospital.
You need to have time to sit
down and have a cup of tea
and tell her not to worry
about the payment.”
Also, Provident’s decision
to have debt collectors
working full-time throughout
the week was criticised as
wasteful. “Nobody has any
money on Mondays. Tuesday
is when benefits are paid,”
said the industry figure.
Then there were the tech
glitches. Senior company
sources confirmed that the
new software system often
sent agents to the wrong
addresses, at the wrong time
of day and sometimes after
another Provident agent had
already visited.
Manjit Wolstenholme, the
chairwoman of Provident,
has taken on the job of
interim chief executive. She
told The Sunday Times that
the dive in debt-collection
levels meant staff would have
to ditch some of the
technology. “They are going
to have to do things more
manually now; to go around
knocking on doors and
finding out the right time to
call in,” she said. “It’s the
collection that is hurting us.”
Workers complained that
aspects of Provident’s
technology revolution, such
as recording face-to-face
interactions, were damaging
customer relationships. This
may also have limited their
ability to drum up new
business.
“Because of voice
recording, you are unable to
help ‘vulnerable’ customers,”
said a member of the
Provident agents’ online
forum. “One of the first
questions agents expect to
ask is, ‘Do you owe money on
essential bills?’ If the answer
is yes, then basically you
cannot do the loan.”
In other words, some of
the Provvy’s agents had
earned commission by
persuading customers to lie.
Though he did not spell it
out, Crook hoped his new
technology would stamp
this out — and avoid the
threat of a regulatory
clampdown or a mis-selling
scandal. Instead, the rate of
collection collapsed from
90% to 57%.
Investment bankers are
trying to drum up takeover
interest, but Provident is a
tough sell. Rivals such as
Non-Standard are already
moving in on its territory.
A senior banker said he
had received a proposal to
buy Provident at a
knockdown price last week.
The top line of the pitch? “I
know this probably isn’t your
thing, but . . .”
6
The Sunday Times August 27, 2017
BUSINESS
CHRISTOPHER LANE
In the second of two
articles on halting
the ageing process,
Danny Fortson looks
at extreme diets and
diabetes treatments
N
ed David pulled a small
metal canister from his
pocket, unscrewed the top
and spilled a single white pill
on to the table. “You want it?
You can have it. I’ve got
more,” he said, grinning. “It
feels kind of illicit, doesn’t
it?”
David is not a streetcorner drug dealer. He is a successful
entrepreneur, a PhD who has started
five companies. His latest is Unity Biotechnology, a developer of treatments
for age-related diseases. The pill he proffered? Metformin, a common type 2
diabetes treatment that controls blood
sugar levels.
David is not diabetic. At 49, he is trim
and healthy. Yet he is one of a community
of anti-ageing enthusiasts who are quietly
taking the diabetes pill for its other supposed benefit: a dramatically longer and
healthier life. Several people interviewed
for this story admitted to taking Metformin because it has been shown to
increase the lifespan of lab mice by 10%
and hold off a whole raft of age-related
illness. The mice not only live longer but
also live better. This has not been proven,
however, in humans.
Yet for many scientists and anti-ageing
enthusiasts, the research is strong
enough. Arram Sabeti, the 31-year-old
(non-diabetic) founder of catering
start-up ZeroCater, said he “fired” his
first doctor after he refused to prescribe
the medication.
Metformin is not the only treatment
that has been in circulation for decades
now being touted as an anti-ageing wonder drug. Other avenues, such as caloric
restriction, an extreme form of dieting,
have also gained fresh attention amid an
unprecedented wave of research — and
investment dollars — into the business of
ageing. The goal: to make 120 the new 80
and, eventually, to live for much, much
longer.
The most promising candidate today,
however, is Metformin. Derived from the
French lilac plant, the treatment has
been around since the 1950s. In recent
years, many in the anti-ageing crowd
started taking it as a type of ageing prophylactic. One reason was the mouse
research mentioned above. The other
was a 2014 Cardiff University study of
90,000 people that found type 2 diabetics taking Metformin outlived not only
diabetics taking a rival treatment but also
a control group of healthy individuals.
Critically, this was an observational
study: it detected patterns but was not a
rigorous clinical trial that could definitively prove Metformin was the cause. Nir
Barzilai intends to change that.
Barzilai, director of the Institute for
Ageing Research at the Albert Einstein
College of Medicine in Brooklyn (and a
user of Metformin), has proposed the
first clinical trial of the drug as a treatment for age-related diseases such as
arthritis, heart disease and, of course,
diabetes. At the heart of the Targeting
Ageing with Metformin (Tame) trial is a
belief driving much of this new wave of
research: that age-related diseases share
common biological “pathways” that, if
manipulated, can reduce our susceptibility to a menu of old-age maladies all at
once.
The study will cost only $70m
(£54.4m) — a pittance in the medical
world — yet more than two years since its
conception, Barzilai has only been able to
raise $35m from a single donor. Who? He
can’t say: “If I name names, I have to pay a
penalty of $2m, which I don’t have.”
Stephanie
Lederman,
executive
director of the American Federation for
Ageing Research, said the Tame trial “is
going to change the world”.
Metformin’s problem is that it lost its
patent protection decades ago and costs
just 28 cents a pill. No company would
Hunger to survive: Paul McGlothin, 69, founder of Living the CR Way, with wife Meredith Averill, says he feels ‘15 years younger’ after cutting his daily calorie intake by 20% to help boost longevity
Go hungry for years —
or wait for a magic pill
PODCAST
SILICON VALLEY’S
QUEST FOR
ETERNAL LIFE
THESUNDAYTIMES.CO.UK/
DANNYINTHEVALLEY
fund a study, which would enrol 3,000
people and follow their progress for five
years, if there were no money to be made.
So this miracle drug, which has the
potential to keep people alive and, importantly, healthy, for several extra years, is
stuck as a diabetes drug. Except for the
growing number of devotees taking it “off
the books”.
The other pill for which there is great
hope is Rapamycin. Unlike Metformin,
there is no black market in this drug
because it has all kinds of nasty side-effects. Its primary purpose is to prevent
rejection in organ transplant patients. In
mice, however, it has been shown to act
as something of a fountain of youth, holding off a whole host of age-related illnesses and extending life by as much as a
third.
Extrapolate that to humans and the
average lifespan would jump from 79 to
102, and the extra years would, in theory,
be of far higher quality than they are
today.
Researchers at Washington University
are carrying out tests on middle-aged
dogs to see whether Rapamycin will
extend their lives by up to five years. Eric
Verdin, president of the Buck Institute for
Research on Ageing, said it was a potentially potent treatment, more so when
coupled with Metformin.
“People have recently shown in mice
that if you combine Metformin and Rapamycin, you actually get a bigger effect —
way bigger than when you get them individually,” he said.
The wheels of medicine turn slowly, so
rather than wait perhaps decades for
arduous clinical trials to bear fruit, some
people have begun to take out a rather
invasive type of insurance policy: freezing their stem cells for future use. Forever
Labs, a Michigan-based start-up, harvests
stem cells from bone marrow extracted
via a needle to the hip and puts them into
a deep freeze.
Both of its founders, Steven Clausnitzer and Mark Katakowski, have undergone the procedure. Why? Because stem
cells hold great potential as the basis for
medical interventions such as, say, organ
or bone marrow transplants, but as we
age, they degrade. Forever Labs freezes
them so they stay young and potent.
The ultimate goal is that they become a
reservoir to which we return again and
again for rejuvenation. Possibly for ever?
Katakowski said: “We want to treat ageing
itself with these young cellular assets,
and the result of successful health maintenance would be living, yeah, possibly
for ever.”
Forever Labs, which was recently chosen to take part in Y Combinator, the
start-up boot camp famed for turning out
giants such as Airbnb and Dropbox,
claimed that more than 70 people have
frozen their cells so far. Katakowski, 42,
had his cells frozen when he was 40.
“If things progress according to our
goals, when I’m 60 I’ll be rejuvenating my
bone marrow niche with my 40-year-old
cells,” he said. “And so when I’m 60 I will
be partially 40 — I might be an aged
hybrid.”
Paul McGlothin is not banking on any
scientific breakthroughs. Instead, he has
put his faith in bean pasta. McGlothin is
founder of Living the CR Way, a kind of
extreme Weight Watchers, based in New
York. It is founded on the science of
caloric restriction. Going back to the
1930s, research has shown that a sharp,
sustained cut in food intake has a direct
and dramatic effect on life extension.
In practical terms, this means cutting
the 2,400 calories an average adult eats
in a day by about 20%, through intermittent fasting, skipping meals or eating tiny
portions. Verdin of the Buck Institute
called the practice “the strongest and
most robust thing you can do to increase
lifespan”. The problem, he said, is that
few people can actually stick to it.
“It means that you are chronically hungry for about a year or two, then people
eventually adjust. But if you’ve seen
humans who have been on caloric
restriction, just imagine a 6ft 1in man
weighing 135lb [9½ stone]. That’s what
you get.”
Researchers have been working for
years on drugs that mimic the life-extending effects of eating less, but have yet to
bring a compound to market.
McGlothin is doing it the hard way. At
69, and despite claiming that he does no
strenuous exercise, he says he feels “15
years younger”. His resting heart rate is
48 beats per minute, his eyesight
improved to 20/10 after he started the CR
Way and he said any traces of “brain fog”
were cleared away.
The trade-off, however, is extreme vigilance about what he eats. The day he
spoke to The Sunday Times, for example,
he had bean pasta for breakfast, a common morning meal. His diet is heavy on
vegetables and nuts, with meat making
very rare appearances. It sounds bleak,
but he is believer.
“Let’s say in eight years someone
comes up with a marvellous discovery.
We want to be alive and not in such bad
health that we can’t take advantage of it,”
McGlothin said. “Unless people don’t
care whether they are part of the last generation that has to die early, if they want
to be part of the new generation that lives
much longer than normal and in terrific
health then I think they have to take a CR
approach.”
Chronic starvation seems an improbable way forward. Most will probably just
wait for a magic pill. There’s no shortage
of people working to deliver one.
News UK has launched an incubator for early-stage startups
that could be super-charged by our journalism.
Apply here: newsukstartuplab.co.uk
Harvard prof out to keep Uber on straight and narrow
A strategy expert
called in to rid
the taxi-hailing
giant of its toxic
culture talks to
Danny Fortson
in San Francisco
Frances Frei admits she is, by
nature, “criminally
optimistic”. That’s a good
thing. The Harvard Business
School professor has taken on
one of the hardest jobs in
business: saving Uber.
Since she was parachuted
in nearly three months ago,
the company doctor has
come to work every day at the
$69bn (£54bn) ride-hailing
giant’s San Francisco
headquarters wearing an
Uber T-shirt — brave, given
the company’s status.
Yet she is convinced Uber
is not rotten to the core. “The
most surprising thing to me
was that I didn’t find any
novel challenges.” The
context, however, was “super
novel. I’m not sure there are
any peers for the growth
we’ve experienced while also
creating a new industry.”
Uber has, however,
become the exemplar of the
worst of the modern
technology industry; a den of
sexual harassment and
bullying perpetrated for
the most part by privileged
white men. Scandals, bitter
boardroom infighting and the
dramatic defenestration of its
pugnacious chief executive
cemented its image as a
corporate basket-case.
For Frei, that proved
irresistible. She took leave
from Harvard in June to take
on a new role Uber crafted for
her as the company’s first
senior vice-president of
leadership and strategy,
tasked with detoxifying the
company from the inside out.
The stakes are high. Frei
said: “Culture can kill a
company. Full stop.”
There are signs Uber is
coming apart at the seams.
Employee turnover has
increased. Ousted boss Travis
Kalanick has been sued by
investor Benchmark Capital,
which accuses him of
undermining the fruitless
search for his replacement.
Strategy has been left to drift.
The roles of chief executive,
finance director, operations
chief, president, general
counsel and head of
engineering are all vacant.
Several shareholders have
cut the value of their Uber
stock by 15% — equal to $10bn
— amid its mounting travails.
Frei, however, is
unperturbed. She claims the
overhaul is well under way
and, true to her roots, it has
taken shape in the classroom.
She has created a Harvardstyle course in management,
accountability and
communication that is
“completely customised for
Uber. I’ve trained 10,000 of
the 15,000 employees so far.
“It is like a Harvard
Business School class suited
to hypergrowth companies.
The employees are
enormously receptive to it.”
She has pulled off
improbable makeovers
Frei in her Uber T-shirt
before. Uber is eight years
old; Harvard is 381. Yet it was
at the latter, in 2010, that Frei
led a change programme at
the business school, which
has long been seen as the gold
standard. It kept to itself the
fact that for decades, levels of
performance and selfreported satisfaction among
its students differed widely.
American men did best
and enjoyed themselves the
most, while women and
international students lagged
behind. Frei said: “One
deep-seated theory was that
women are more
collaborative than men. They
didn’t want the top grades as
much. That didn’t sound
right to me.”
She led a raft of changes
that, within two years, closed
the grading and satisfaction
gaps. The discrepancies
became a talking point
among students. The school
introduced hand-raising
coaches — 50% of any course
grade is based on class
participation, typically
dominated by men — as well
as software that allowed
teachers to check students’
grading and participation
patterns in real time.
The changes led some to
accuse Frei of creating a
socially engineered nanny
school whose students were
ill-prepared for the real world
of business.
Uber, in a way, is a lesser
challenge. Just 13 days after
Frei started, Eric Holder, a
former US attorney-general,
published a blistering report
revealing deep dysfunction.
He was hired to investigate
Uber’s workings after Susan
Fowler, a former engineer,
published a blog post about
repeated instances of sexual
harassment going unchecked
despite her complaints.
Holder recommended a
47-point makeover of Uber’s
culture and structure. The
report was “a gift”, said Frei.
“People aren’t going to give
you permission to do things
very differently unless you
come from a crisis. Holder’s
report gave us licence.”
The most obvious
problem, she said, was that
Uber had grown so fast that
its layer of middle and upper
managers was green and
undertrained. Of the
company’s 3,000 managers,
63% were in such roles for the
first time. “It’s a startlingly
high percentage,” said Frei.
On top of that was Uber’s
famously flat management
structure. Kalanick was so
desperate for growth that he
handed extreme autonomy to
country and division
managers. “That’s wonderful
for growth but it atrophies
the notion of working as a
team,” Frei said.
Yet if there were to be true
organisational change, many
people just had to go. Uber
was built in the image of
Kalanick, a hyper-aggressive
executive who broke through
entrenched taxi unions and
corrupt local officials with a
take-no-prisoners approach
that left little time for the
nitty-gritty required by a
company that was suddenly
very big, such as human
resources. Uber went from
small San Francisco-based
black car company to a
multinational operating in 70
countries with more than
1.5m drivers.
Sometimes Uber veered
into underhand techniques.
An example was Greyball,
a secret programme created
to evade regulators around
the world.
Amid a revolt from a clutch
of key shareholders, Kalanick
resigned on June 21, just three
weeks after Frei arrived and
eights days after the Holder
report. A number of his key
lieutenants also left. Did he
need to resign for Uber to
change? “We could have done
it with Travis, we can do it
without Travis. His spirit lives
on,” said Frei.
Last week Uber revealed it
lost $645m in the quarter to
June, down from $708m in
the preceding period.
Turnover more than doubled
on the year to $1.75bn. At that
rate, Uber’s $6.6bn cash pile
will last it another 2½ years. It
is in no danger of going
broke. It is in danger,
however, of drifting.
With no semblance of a
normal executive structure,
the day-to-day is handled by a
committee of 16 managers,
Frei among them, who vote
on key decisions. There has
never been a situation quite
like it, she admitted.
Of course, she sees a bright
side. “This leadership team
will be in place when the
chief executive comes. If we
had an interim chief
executive in place, we
wouldn’t have learnt the
team dynamics.”
Ever the optimist. To do
her job, you’d have to be.
7
The Sunday Times August 27, 2017
BUSINESS
Bumpkin
blows hot
and cold
on Dyson
ADRIAN SHERRATT
Cutting a deal: Grey at home with
his Gtech cordless lawnmower
you need to be selling products’ ” and
keeping the money.
He resigned and put down £6,000
apiece on two buy-to-let flats. The rental
income was enough to cover the loans on
both, plus Grey’s own mortgage. He then
lived on £18,000 of savings for 18 months
while he worked on a prototype.
Grey came up with a cordless sweeper,
which he took to Chicago’s Housewares
Show. He struck a licensing deal with
Shark, a Canadian appliances maker.
Shark was “very tight on pricing” but
Grey persuaded it to sell his sweeper for
$79.95, or £49.95 in Britain.
A few months later he received a
phone call from Shark’s production manager. “He said, ‘This thing’s flying and you
need to make loads more,’ ” Grey recalls.
“I did a little dance in the hall.”
The Shark sweeper sold 250,000 a
month, earning Gtech royalties of
$250,000. Grey used the money to prop
up the brand in Britain, which was “an
expensive hobby”. Gtech makes its products in China and has a “constant battle”
with the factories, which are adept at
negotiating ever-higher prices.
After the initial “sweet spot”, Gtech hit
trouble in the 2007-8 downturn as volumes tumbled in America, but it pulled
through. When the AirRam came out in
2012, Grey thought it was on the cusp of
another boom. The AirRam is incredibly
easy to use, he says, pointing to his PR
manager: “If Yvonne can put it together
then anyone can.”
Instead, he was left with an overhang
of unsold stock — he still believes, rightly
or wrongly, partly because of Dyson’s lob-
Nick Grey is delighted to have ‘rattled the
cage’ of a powerful rival with his design
for a cordless upright vacuum cleaner
INTERVIEW
OLIVER SHAH
D
eep inside a laboratory at
Gtech’s headquarters in
Worcestershire, a 3D printer
is spraying out a prototype
of a super-compact vacuum
cleaner. The laser turns a
bed of powder into layers of
white plastic, gradually
building components that
can be slotted together.
“When I first started out, this was what
[former Manchester United manager] Sir
Alex Ferguson would call ‘squeaky bum
time’,” says Nick Grey, Gtech’s founder,
peering into the machine. In years gone
by, a vacuum cleaner designer would
have made a far rougher prototype, then
sent off for costly metal moulds to cast
plastic parts. “If you made a cock-up, it
cost a lot of money. So as a design engineer, this is a dream way to work.”
Grey left his job at the appliances
maker Vax in 2001 to set up his own company, with the aim of producing cordless
vacuum cleaners. Prototype-making is
not the only thing to have changed since
then. Gtech — short for Grey Technology
— has gone from one man in his garage to
a promising brand with more than 200
employees and sales that should hit
£120m this year. It has expanded into
electric bikes and lawnmowers.
Grey, who insists he is still a “country
bumpkin”, took a £4m dividend in 2015.
Gtech’s success has also attracted
unwelcome attention from rivals including the mighty Dyson. In 2012, Gtech
released the AirRam, a bagless, cordless,
upright product priced at £229.95. It
received rave reviews and by May that
year had sold out everywhere.
Grey says he spent Gtech’s £1m bank
balance on more stock and prepared to
push it out with a big advertising campaign in November, without realising that
in the intervening period, “our competitors were busy telling our retail partners
that Gtech are no good at all”.
The production
manager said,
‘This thing’s flying
and you need to
make loads more.’
I did a little dance
in the hall
When the AirRam went into stores,
Grey “stood in John Lewis and saw probably six people on the trot walk in and ask
for a Gtech AirRam, and none of them
bought one”. He tried to listen to the conversations: “They were hearing stories
about ‘you can’t do the stairs’ and ‘it’s not
an actual vacuum cleaner’.”
Grey blamed briefings by rival sales
teams, although a source close to John
Lewis says the department store’s partners would have “no incentivisation” to
push one brand over another. Gtech
pulled its products from John Lewis in
2014 because, Grey says, “we were not
happy sending customers into them”.
After our interview, he emails to say they
are talking once more and he hopes to
“partner with them again this autumn”.
Grey started out sweeping floors at a
lab and doesn’t come across as a corporate bruiser. Gangly and tall, he speaks in
a gentle Midlands accent. He mentions
how much he likes mowing the lawn. He
has tried to turn his everyman quality
into an asset by appearing in his company’s TV adverts, which has the added
benefit of saving money.
Gtech’s boss grew up in Worcestershire, one of seven siblings. His mother
looked after the family; his father had a
business making metal items using a
process known as investment casting.
“I was fascinated with all these bits of
wax — dunking them into things and filling them with metal, and people polishing them,” he says. “I used to hang
around and try not to get in the way.”
Grey left college at 17 with one A-level
in technical drawing. “School wasn’t my
favourite — and I don’t think I was their
favourite either,” he says. Mildly dyslexic,
he was “constantly sticking my arm up
and saying ‘what if we did this . . . ?’ I have
the feeling I was a bit of a pain.”
Grey worked as a bathroom salesman
then got a job fitting double glazing on a
building site. As his second winter “up a
ladder” approached, he applied for an
indoor job as a lab technician with Vax,
which had once had a contract with
Dyson. Grey got the job and was soon
tidying up after its designers, making
copies of drawings and doing the “boring” tests others didn’t want to do.
Grey had always been interested in the
mechanics of cars and motorbikes. He
piped up with ideas. After a while, his
boss, a robust Scot called Alex Laird, let
him take on junior design projects.
“I just felt that I instantly understood
how building and making products
works,” Grey says. “If there were discussions on modifying metal tools, it just
seemed obvious to me what to do.”
He rose to become Vax’s head of engineering. In 1999, the company was taken
over by Techtronic Industries, the Hong
Kong-based manufacturer that later
bought Hoover in America.
At about the same time, Grey became
keen to develop a cordless vacuum
cleaner. His “business brain said ‘You
don’t need to be designing for a living,
Boost your
efficiency
with a
daily huddle
Unipart chief executive John Neill has
improved productivity by listening
to his staff. The NHS could do the
same, he tells Tommy Stubbington
I felt I instantly
understood
how building
and making
products works
THE LIFE OF NICK GREY
VITAL STATISTICS
Born: July 12, 1968
Status: married, with
four children
School: Tenbury High
School in Worcestershire
First job: double-glazing
fitter
Pay: £600,000 in 2015,
when he also took a £4m
dividend
Homes: Shernal Green
in Worcestershire, and
north Devon
Car: BMW 3-series estate
Favourite book: The Chimp
Paradox, by Professor Steve
Peters. “It’s a really new spin
on psychology”
Film: The Shawshank
Redemption
“Join the productivity
revolution!” scream a series
of billboards on the approach
to an industrial estate on the
outskirts of Oxford.
Visitors might be surprised
to learn this was once the
headquarters of British
Leyland, synonymous with
the bloated inefficiency of
state-controlled industry in
the 1970s.
The man behind the
message is John Neill, who
pioneered Japanese “lean
manufacturing” techniques in
this country after taking
charge of Leyland’s car parts
division. Four decades and
one management buyout
later, he has transformed
Unipart, of which he is
chairman and chief executive,
into a logistics empire with
nearly 10,000 staff and
turnover of more than £1bn.
The 70-year-old has even
bigger plans, however. Neill,
born in South Africa but
educated in Scotland,
believes his management
philosophy — called the
Unipart Way — is the key to
turning around Britain’s
dismal productivity record.
The company already sells
its consulting services to
clients including National
Grid, the online retailer Asos
and more than 20 NHS trusts.
Music: “Everything from Rod
Stewart to Justin Bieber”
Gadget: lawnmower
Charity: St Richard’s
Hospice in Worcestershire
Last holiday: north Devon
Favourite music: Grey has a
fondness for Justin Bieber
Neill believes the Unipart Way
can transform the health
service, saving enormous
sums for the taxpayer.
“There’s a few billion at
least we should be able to
save,” he says. “It isn’t about
making people work harder,
but letting people use their
knowledge and experience to
do things more efficiently.”
Unipart’s hangar-sized
headquarters, beside BMW’s
Mini factory at Cowley, is a
working demonstration of
how that might look.
The chief executive
bounds along corridors
emblazoned with examples
of his brand of managementspeak: “No problem is a
Efficient working: John Neill
WORKING DAY
The founder of Gtech wakes
at 7am. Nick Grey needs to
be at work from 8am and
doesn’t like to be late, “so
I end up rushing around,
throwing my clothes on
and grabbing my bag”.
The drive from his home
in Worcestershire to Gtech’s
HQ takes 15 minutes. Grey,
49, checks emails and then
roams around the office.
He rarely travels or works
problem.” Smiling workers,
who seem to share his
messianic fervour,
demonstrate a system of
wallcharts that record, hour
by hour, whether tasks are on
track. The same system is
used to monitor exhaust
systems rolling off the
company’s production lines
and the number of invoices
processed by the finance
department.
Success and failure are
discussed at a
“communications cell” — a
daily huddle where staff
share tips on how to work
faster. This approach allows
“thousands and thousands of
small improvements every
day” that together add up to
a company-wide productivity
boost, says Neill.
There is a slight cult-like
atmosphere to the place, but
his blue-chip client list
suggests he is on to
something.
Britain’s economy could
certainly use such help.
Growth in productivity — the
amount each worker
produces in an hour — has
slowed to a crawl since the
financial crisis, despite the
issue being given top priority
by former chancellor George
Osborne. Britain has also
lagged behind competitors: it
later than 6pm. “You won’t
find me gallivanting off to
play golf. When the clock
strikes six I’ll go home,
relax, spend time with the
kids, put them to bed and
have a bath.”
DOWNTIME
Grey and his wife, Louise,
have four children — Daisy,
11, Henry, 9, George, 5, and
Alfred, 3 — and a miniature
schnauzer, Luna. Grey’s
hobby is mowing the grass.
“I’ve got three ride-on
lawnmowers which I trundle
up and down on. The kids
love sitting on them.”
They also have a holiday
home in north Devon.
takes us five days to produce
what the Germans manage in
four, a statistic quoted by
Osborne’s successor, Philip
Hammond.
There are almost as many
explanations for the
productivity puzzle as there
are economists in Britain,
from lack of investment to
poor vocational education to
the sapping effects of low
interest rates.
Neill insists Unipart is not
bandwagon-jumping. Was he
asked to join Hammond’s
productivity council, a body
set up last year and led by Sir
Charlie Mayfield, the
chairman of John Lewis
Partnership?
He wrinkles his nose.
“There’s nothing I can tell
them except they should do
what I’ve been doing for the
past 30 years. There’s
nothing new to invent here.”
The central premise of the
Unipart Way is that the best
ideas to boost efficiency
come from the workers
themselves. Crucially,
organisations must have
procedures in place to make
sure those ideas are heard
and acted on.
Neill gives a recent
example from an NHS
hospital where the company
is working. After being told by
bying. Gtech suffered a cash crunch in
2013 and Grey was forced to lend “every
penny” of his savings — nearly £1m — to
the company. He told his sales team: “We
need to convert this stock into cash. It
doesn’t matter if we don’t make a profit
on it. I just need that money back.”
They launched a direct-sales campaign
and Gtech’s sales recovered. Grey got a
taste for cutting out the middle man and
withdrew Gtech from all retail outlets last
year. “They all want big margins and then
all they do is discount against each
other,” he says. Gtech has since gone back
into Argos and the shopping channels
Ideal World and Lakeland.
The beef with rivals didn’t end with the
John Lewis row. There have been other
brushes with Dyson. “We had complaints
via the Advertising Standards Authority,
we had the Office of Fair Trading,” Grey
says. “In Germany, someone printed a
brochure with an incorrect claim and
they got an injunction against us, which
was fun.”
Grey describes Sir James Dyson, his
billionaire rival, as an “inspiration”, and
says the company’s aggressive tactics
have been “perfectly understandable”
because “we rattled their cage by making
comparisons”. But he adds: “If people
infringe our patents or make claims that
we don’t think are right, we try and talk to
them. The only person we ever end up in
front of third parties with is Dyson.”
Dyson says: “As Mr Grey admits, we
have sometimes been forced to challenge
Gtech’s misleading claims. Regulators
and courts have upheld our attempts.”
Having overcome various obstacles,
Grey is sitting pretty with 100% ownership of Gtech, which made pre-tax profits
of £12.9m on sales of £66m in 2015. He is
thrifty and doesn’t want to sell a stake.
“I’m very proud that I bought my last
desk for £13, used it for 10 years and then
sold it for £10 when we moved offices,” he
says. Private equity need not apply.
There’s a few
billion at
least we
should be
able to save
a senior consultant that a new
£1m operating theatre was
required, Neill went to see for
himself. He gathered staff
round and asked them what
they thought.
“It was like a fire hose of
ideas,” he says. A nurse told
him that the operating
theatre could carry out one
more procedure a day,
equivalent to an extra
£750,000 of work annually,
simply by employing a porter,
so surgeons would not have
to wait for their nursing
teams to wheel patients back
and forth before they could
get started.
Rather than paying for
another theatre, “they could
save a million pounds on new
kit. It’s so obvious, why
wouldn’t they do it?” he says.
“But when I took it to
management they just said,
‘Oh, yeah, that lot are always
complaining’.”
Neill insists that, at
Unipart, everyone is listened
to. Until recently, one factory
worker regularly had to
spend 45 minutes fetching a
forklift to check what was
inside an out-of-reach bin full
of car parts. He suggested
fixing a camera to the end of a
pole, which helped slice half
an hour off the process, an
innovation that was shared
around the world on the
company’s Facebook-style
internal network.
Neill is talking to the NHS
about rolling out the Unipart
Way nationally, and he is
ready for controversy. There
was union opposition to
changes the company
proposed at HM Revenue &
Customs a decade ago, which
produced £1bn of savings.
There is no need to fear
creeping business
involvement in the NHS, he
says. “In many ways, the
Unipart Way is an antidote to
privatisation. If we help them
to be as efficient as they can
be, why would they need to
ever be in a different
ownership structure?”
8
The Sunday Times August 27, 2017
SMALL BUSINESS
VICKI COUCHMAN
Our fabulous
way of taking
your calls
HOW I MADE IT
RACHEL CLACHER
CO-FOUNDER OF
MONEYPENNY
Kevin Osborne of
MeWe360 is
helping budding
business owners
from minority
backgrounds
End the start-up whitewash
and blue-chips will follow
A project to encourage more ethnic minority entrepreneurs is having an impact, says Peter Evans
K
evin Osborne has an eye for talent. In 1999, he set up Tribal
Tree, a support programme for
disadvantaged youngsters with
an interest in music. It helped
launch the careers of some of
the biggest names in British
urban music, including Plan B,
Rudimental and N-Dubz.
Tribal Tree came to an end in 2007,
but not before Osborne — himself a musician and producer — saw countless examples of the challenges facing young people from minority backgrounds who
want a career in the arts.
He now uses his talent-spotting abilities to help entrepreneurs of black, Asian
and minority ethnic (BAME) origin to
start businesses. Osborne focuses mainly
on creative industries, but the lack of
diversity in start-up companies exists
across all sectors.
Last year a government survey of small
and medium-sized enterprises (SMEs) in
England and Wales with at least one
employee revealed just 5% are owned or
controlled by a person from a minority
ethnic group. The figure drops to 4% for
one-person businesses. Despite efforts
by government and charities, there was
no improvement from the previous year.
“If you come from a particular back-
ground, you just don’t have the network
you need to succeed,” said Osborne, 50.
Four years ago, he founded MeWe360
to help budding business owners from
BAME backgrounds. The project, which
is based in an office in London’s Soho
owned by Sir Paul McCartney, provides
workspace, mentoring and introductions
to potential investors. It has recently
received just over £1m in funding from
the Arts Impact Fund, supported by the
charity Nesta and the Arts Council
England, among others. That’s enough to
survive for five years. From then on,
MeWe360 will begin investing in some of
the companies and rely on those returns.
There is no single reason for the lack of
BAME entrepreneurs. A report by the
Economic and Social Research Council
suggested some ethnic minority groups
found it more difficult to obtain credit to
start a business, while a perception of discrimination discouraged others from
applying for bank loans.
Politicians continue to grapple with
the problem. Margot James, the minister
for small business, has toured the country talking to company owners about the
importance of diversity to the government’s industrial strategy. Yet progress
has been disappointing.
“There’s a real will to change things,
but the programmes that have been run
haven’t quite done it,” said Osborne.
“The numbers speak for themselves.”
Britain’s biggest businesses set a poor
example. Just 5% of top executives at
FTSE 100 companies are from ethnic
minority backgrounds, according to the
headhunting firm Green Park, and nearly
60% of boardrooms entirely white. The
Parker Review, backed by the government, has set targets for board diversity —
but with little urgency. It recommends at
least one BAME director in all FTSE 250
businesses by 2024, for example.
Could SMEs lead the way? “Small organisations might be at an advantage
because they can start with a blank sheet
of paper,” said Marjorie Strachan, head of
inclusion at NatWest bank.
The benefits would be enormous.
Another government-backed review, led
by Baroness McGregor-Smith, said the
economy could benefit from a boost of
£24bn a year if BAME workers were promoted at the same rate as white staff.
There is cause for hope. For years
there was a chasm between the number
of men and women starting businesses. It
still exists, but the so-called enterprise
gap has narrowed after a surge in femaleled start-ups. In the three years to 2016,
the proportion of women starting busi-
nesses was 45% higher than a decade earlier, according to new research from
Aston University.
There are signs of progress on ethnic
diversity as well, especially in Britain’s
biggest cities. In London, for example,
the number of BAME small business owners is 16%, government figures show.
Programmes such as MeWe360 are
starting to have an impact. Amman
Ahmed left university seven years ago
with £1,000 left from his student loan. He
was determined to start a business, but
his first attempt did not work out and he
was forced to work as a recruitment consultant to pay the bills.
Ahmed had a side project called Music
for Pets, which produced soothing
sounds for restless cats and dogs.
Through MeWe360, he found a business
coach and was encouraged to keep going
with the idea. Music for Pets now attracts
10m hits a month through Spotify, YouTube and Apple Music, and has been
profitable for four years, according to its
founder. The ad revenue was enough for
him to give up recruitment.
“After the failure of my first business, I
was in a lonely place,” said Ahmed, 30,
who is based in Manchester. “MeWe360
introduced me to people who had built
their own teams and been a success.”
Wanting to make better use of
her talents, Rachel Clacher’s
first entrepreneurial urge was
to open a sausage shop. It was
the 1990s and she was
running a small marketing
agency in Chester at the time.
Instead of flogging
bangers, however, she
and her brother, Ed Reeves,
co-founded Moneypenny — a
remote telephone answering
company — in 2000. Clacher
hasn’t looked back since.
The siblings got the idea
while running small
businesses and becoming
frustrated at not having
anyone competent to answer
calls when they were
unavailable. Call answering
services did exist but all they
did was relay messages.
Moneypenny trains its staff to
be remote personal assistants
rather than mere phone
operators. “From our own
experience, we would only
want someone fabulous to
look after our calls,” said
Clacher, 51.
Capitalising on the growth
in outsourcing, the company
now employs 560 people in
Wrexham, north Wales, and
has grown revenue by an
average of 20% each year
since it was founded. Its
10,000 clients range from
one-person start-ups to magic
circle law firms. Last year, it
reported pre-tax profit of
£4.8m on revenue of £25m.
Life has not always been so
sweet for Clacher. She and
Reeves, 49, “scraped
together” £10,000 of their
own money to start the
business and initially had an
overdraft of £16,000. “We
had no money at all and no
one would lend us anything,”
she said. This early frugality
has remained: Moneypenny
has never borrowed a penny.
As a child, Clacher rarely
stayed in one place for long.
Her father, a consultant civil
engineer, headed dam and
hydropower projects “all over
the world” and the family
moved with him. She later
boarded at Howell’s School in
Denbigh before studying
French and business studies
at Sheffield University.
After graduating, she
worked in public relations
and marketing, including a
stint for Save the Children in
Zimbabwe. She then set up an
arts marketing agency in
Chester and worked for
theatres across the northwest
of England.
Clacher settled on
Wrexham as Moneypenny’s
base because her husband,
David, bought an optician’s
practice there and became
the company’s first landlord.
The premises above the shop
is no longer required,
however: last year
Moneypenny opened a £15m
headquarters, complete with
a treehouse and its own pub.
Despite fielding 10m calls a
year, Clacher bridles if her
company is described as a
call centre. “We are the
antithesis of that. How many
call centres have
treehouses?”
Moneypenny’s plans
suggest it will move further
still from simply answering
calls. It is embracing artificial
intelligence, especially voice
recognition software, yet
Clacher does not believe the
rise of such technology will
make Moneypenny’s human
assistants obsolete: “As AI
continues to grow,
interactions with humans will
become the gold standard.”
In the past year, she and
Reeves have stepped back
from the everyday running of
the company, although both
remain directors. She does
miss the energy of running a
start-up, though. “We’ll never
get the headiness of those
early days again. There are
swathes of those first six
years I can barely remember.
I was very busy producing
children and growing the
business.”
Clacher lives in Shropshire,
close to the Welsh border,
with David, an optometrist,
and their three daughters,
aged 18, 16 and 13.
Her advice to
entrepreneurs is: “Be
relentless in knowing what
you want to do, and always
wear your clients’ shoes.”
Peter Evans
’Not a call centre’: Clacher
9
The Sunday Times August 27, 2017
BUSINESS
Oliver Shah
Bell Pottinger in spin-off dilemma
The meltdown at PR firm Bell
Pottinger, which has been
accused of stirring up racial
tensions in South Africa, has
led some of its partners to
think about spinning off into
a new business.
John Sunnucks, chairman
of its financial practice, is
understood to have held
talks with Oliver Hemsley,
founder of the stockbroker
Numis, about funding some
kind of buyout. Tricky — not
least because James
Henderson, Bell Pottinger’s
under-fire boss, and his
fiancée, Heather Kerzner, 48,
own 37%. To add spice, she is
the ex-wife of South African
hotels tycoon Sol Kerzner.
Sunnucks, 58, says this is
“just speculation”.
Hemsley, 54, says: “I
definitely haven’t got any
comment about that, but I
think it’s unlikely.”
Meanwhile, Prufrock was
told Henderson, 52, recently
promised angry partners he
would resign, then changed
his mind. He says this is
untrue: “I’m determined to
sort this out and then decide
what’s best for the business.”
Generous Brucie
is beyond Caring
Tributes continue to flow for
Sir Bruce Forsyth, who died
this month aged 89. “Brucie”
was generous and not averse
to mixing in business circles.
He donated two Strictly
tickets and a backstage glass
of bubbly when hotels
tycoon Surinder Arora held a
charity auction at his
Heathrow Sofitel in 2014.
Forsyth, who lived near
Arora on the Wentworth
Estate in Surrey, also offered
a round of golf for £5,000.
Rag trader turned
restaurateur Richard Caring,
who is handy with a club,
called out: “I’ll pay £5,000
not to play with these two.”
FUNNY BUSINESS
Lyons is down
with his lamb
Among the nine nominees
for this year’s Edinburgh
LETTERS
Comedy Award is Elf Lyons, a
26-year-old whose show is a
fancy-dress mash-up of Swan
Lake performed in Franglais.
Lyons, who describes
herself as “a unicorn leftieleaver”, is the daughter of
ardent Brexiteer Gerard
Lyons, former economic
adviser to Boris Johnson.
Lyons fille tweeted some
advice from her dad after the
nomination emerged: “Just
be yourself. Do a Taylor Swift
and shake it off.”
Wise words indeed.
Lyons, 56, who has coauthored a book called Clean
Brexit, doesn’t seem to have
minded the Gallic twist. At
one point, Swan Lake’s tragic
heroine Odette is described
as “très belle, but un petit
peu of a plank”.
JUST SAYING . . .
Timpson faces
battery charge
If the Pensions
Regulator is
frightened of
landing the whale,
I suppose going
after the sprat is
the next best thing
The MP Frank Field on
the decision to prosecute
Dominic Chappell, who
bought BHS for £1 from
Sir Philip Green
DATABANK
INSIDE THE CITY AIMEE DONNELLAN
How to
get more
from door
to door
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
Green’s chubby
chum exposed
The video of Sir Philip Green
spraying champagne around
in Mykonos shows the porky
Topshop boss was joined in
his antics by an equally
corpulent friend. A viewer
points out this is Bruce
Ritchie, head of the property
company Residential Land.
What would his sensible
backers at the Canadian
pension fund Ivanhoé
Cambridge make of it?
Last week’s interview with
James Timpson prompted
lots of glowing comments
about the key-cutting and
shoe repair chain’s policy of
hiring ex-offenders, but not
everyone was impressed.
Alan Rind, a customer
based in Mayfair, writes in
to say the London Selfridges
branch tried to charge him
£30 to replace the battery in
his watch, when Debenhams
did it for £7 and gave him a
free coffee. “A disgrace,”
Rind declares.
Timpson, 45, says the
Selfridges store is unique and
“if he had gone to any other
Timpson shop it would have
been a similar price” to £7.
Pursuing longevity? It’s
more effective to run
Arram Sabeti’s ambition to
“live longer, but also better”
(“Now Silicon Valley techies
think they can live for ever”,
last week) is admirable but
his search for drugs to reach
such a goal ignores the fact
we already have a treatment.
It is called exercise, but sadly
it is widely rejected.
When the Health Survey
for England measured the
actual exercise taken by
adults it found that just 6% of
men and 4% of women
achieved the government’s
recommended physical
activity level — which had
already been set
disappointingly low.
Many studies of the effects
of physical activity confirm
the importance of long-term
exercise in prolonging life. A
recent study concludes that
runners have a 30%-45%
reduced risk of premature
mortality and live three years
longer than non-runners.
Another study found that
the average active 65-year-old
can expect an additional 12.7
years of healthy life, and
highly active 65-year-olds 17.7
years. When it comes to the
effects of ageing, healthspan
— the length of life spent in
Whitney Wolfe, 28, sued the
dating app Tinder for sexual
harassment after she lost her
job there. Now she runs a
“feminist Tinder”, Bumble.
“It’s the digital equivalent of
a guy walking a cute dog. It
allows women to approach
them without fear of being
judged,” she said.
MAGAZINE, PAGE 8
TWITTER POLL
Yes
No
65% 35%
Will the #pound trade 1:1
with the #euro before the
end of the year?
#economics #markets
#parity #holiday
@ST_Business
good health — trumps
lifespan in many ways.
Hugh JN Bethell, Alton,
Hampshire
Non-Standard Finance
80p
70
60
50
SOND J FMAMJ J A
Source: Thomson Reuters
as the home credit business is
expected to see profits
increase by 16% this year and
50% next year.
The beauty of NSF, a twoyear-old London-based
business, is that it is sticking
with a tried and tested
business model. Door-to-door
lending has withstood
recessions, world wars and
the 2008 financial crisis.
Unlike Provident, NSF has no
plans to change its selfemployed collection “agents”
to full-time salaried staff.
This flexibility means NSF
agents can choose their own
hours and earn commission
for every loan they make.
As with any financial
services company, the threat
of unexpected regulation is
always lurking in the
shadows. Yet analysts claim
the Financial Conduct
Authority is “perfectly
comfortable” with NSF’s
business plan.
Van Kuffeler will reveal
more at an investor day in
November. He is expected to
detail how George Banco will
help boost its profits. The
focus is more likely to be on
his ability to take a greater
share of Provident’s business.
For now, it’s a buy.
@aimeedonnellan
FTSE 100
7,401.46
19,671.33
77.48
1.06%
44.87
0.23%
H:20,081.7
L:17,068.0
DOW JONES
21,813.67
139.16
0.64%
Bigger planes ground case
for third Heathrow runway
A record 75.7m passengers
flew through Heathrow in
2016, up 1% on 2015, and in
DOLLAR
USD > GBP
FTSE 100
$1.29
7,500
W 0.00
12-month high: $1.34
low: $1.15
6,000
NASDAQ
6,265.64
49.12
0.79%
H:6,460.8
L:5,034.4
17.80
0.09%
A
S
O N
D
J
M
A M
J
J
A
FALLERS
Provident Financial: 916p, 50.5% on
corporate chaos Dixons Carphone:
182.5p, 25.7% on profit alert Allied
Minds: 117.5p, 24.2% on loss Nanoco:
27.5p, 16.7% on slide in sentiment
Enquest: 26p, 14.8% on oil field woe
FTSE EUROFIRST
1,470.30
0.98
0.07%
H:27,878.4
L:21,488.8
H:1,559.7
L:1,292.2
SHANGHAI
3,331.52
SENSEX
31,596.06
CAC 40
5,104.33
ALL ORDS
5,803.42
9.82
0.19%
DAX
12,167.94
H:20,318.1
L:16,111.8
F
Source: Thomson Reuters
RISERS
Hikma Pharma: £12.88, 15.1p on
share recovery Computacenter: £10.18,
15% on UK boost NMC Health:
£26.70, 14.6% on growth in visits Kaz
Minerals: 816p, 14% on copper rise
Evraz: 291.4p, 12.5% on metal rally
62.80
1.92%
H:2,490.9
L:2,083.8
NIKKEI
19,452.61
6,500
800.59
2.96%
S&P 500
2,443.05
17.50
0.72%
EURO
EUR > GBP
HANG SENG
27,848.16
H:22,179.1
L:17,883.6
Western central banks dare
not unwind their QE
The first large economy to try
unwinding its quantitative
easing (QE) will crash,
effectively ensuring no other
will try it. Any co-ordinated
unwinding by (western)
central banks would play into
the hands of those not
mentioned by Tommy
Stubbington (Economic
Outlook, last week), namely
China and Russia.
Talking about what was
normal before QE is
irrelevant, and it is worrying
that it is central bankers —
who got us into this mess —
doing the talking. This is the
new normal.
David Diprose, Thame,
Oxfordshire
THE ECONOMY
H:7,599.0
L:6,654.5
FTSE 250
the airport’s annual report its
chief executive, John HollandKaye, wrote: “Major airlines
added more seats per aircraft
. . . to grow capacity at the
airport” (Letters, last week).
The airlines, having
already invested in bigger
aircraft, will not pay extra
airport charges to fund a
third runway that is clearly
not needed. The average
number of passengers per
flight rose from 150 in 2007 to
170 in 2016, and a moderate
further rise to 250 will
provide the 50% increase in
traffic supposedly to be
attained by the new runway.
Holland-Kaye has
destroyed the case for the
runway by prescribing its
antidote.
John Busby, Bury St Edmunds
Wooden pallets are as
green as they come
I was staggered to read your
observation last week that
wooden pallets are “not
environmentally friendly”
(“Smart pallets and the not so
smart boardroom”).
Wood is the most
renewable material from
which to make them. Our
industry sources wood for
pallets from sustainable
forests; every part of a
harvested tree is used
productively, and replanting
exceeds harvesting.
Wooden pallets are
reusable, repairable and
recyclable. They are made
from a sustainable material
that absorbs and stores
carbon dioxide from the air —
900kg of CO2 for every cubic
metre of wood — so they
reduce the carbon footprint
of any company using them.
Other kinds of pallet cannot
compete with these
environmental credentials.
I would also take issue with
the statement that pallets are
“boring”, although my family
and friends may disagree.
John Dye, president, Timber
Packaging & Pallet
Confederation
THE WEEK IN THE MARKETS
credit lender, will ramp up an
already aggressive push into
the home credit business.
Investors are already piling
in. NSF’s stock jumped by
10% to 72p in the three days
after Provident’s woes
became public.
NSF has three businesses:
home credit; a lender called
Everyday Loans; and
TrustTwo, a business that
recently expanded through
the acquisition of a sub-prime
bank, George Banco, and
offers loans to people who
have a guarantor.
Results are encouraging. In
the half-year to June 30, NSF’s
revenues increased by 16% to
£52m, profits increased by
26% to £5.4m and the interim
dividend ballooned by 67%
to 50p. The top brass are
hoping to pay out half their
profits in dividends.
This will be welcome news,
Revelling in the misfortune of
others is unseemly, but
bosses at Non-Standard
Finance (NSF) will be hardpressed to avoid a private
smile or two this weekend.
The doorstep lender is
reaping the rewards of the
travails of its much larger
rival, Provident Financial.
Last week, the Provvy’s
share price collapsed by 66%
when it ditched its dividend
after announcing problems
with collecting its loans and a
regulatory investigation into
its Vanquis Bank division.
John van Kuffeler, the
chairman of NSF, has wasted
little time capitalising. As the
former chief executive and
chairman of Provident, he
had poached 353 Provvy debt
collectors by end of July and
has set his sights on hundreds
more. In the coming months,
NSF, the third-ranked home
SIGNALS
AND NOISE . . .
2.75
0.02%
71.38
0.23%
H:3,331.9
L:2,969.1
4.91
0.08%
H:5,442.1
L:4,310.9
H:5,983.2
L:5,138.9
S&P TSX
15,055.99
103.66
0.69%
H:12,951.5
L:10,174.9
H:32,686.5
L:25,717.9
H:15,943.1
L:14,319.1
€1.08
V 0.01
12-month high: €1.20
low: €1.08
YEN
YEN > USD
¥109.32
U 0.15
12-month high: ¥118.66
low: ¥100.06
Consumer prices index
current rate
prev. month
CPI including housing
current rate
prev. month
Retail prices index
current rate
prev. month
Average weekly earnings
on prev. month on last year
Unemployment
current rate
prev. month
Manufacturing output
Latest month
prev. month
Retail sales
on the year
on last month
prev. month
latest 12 months
V 0.31
12-month high: $58.37
low: $43.57
GOLD
DOLLARS/TROY OZ
$1,292.94
V 2.86
12-month high: $1,344.94
low: $1,126.52
2.6%
2.6%
2.6%
3.5%
3.6%
0.6%
£506
1.48m
2.1%
4.5%
4.4%
0.0%
1.3%
0.2%
0.3%
UK trade
balance (£bn)
latest month
-4.6
-2.5
-37.4
Gross domestic
product
latest quarter
prev. quarter
annual change
0.3%
0.2%
Budget deficit
(PSNB) in £bn
latest month
prev. month
year to date
+0.2
6.2
22.8
OIL
DOLLARS/BARREL
$52.41
2.6%
1.7%
10-YEAR BOND YIELDS %
variation
12 months
high
low
UK
1.05
▼0.03
1.56
0.51
US
2.17
▼0.03
2.64
1.52
JAPAN
0.01
▼0.02
0.16
-0.09
GERMANY
0.38
▼0.03
0.59
-0.16
TOP 200 COMPANIES
Rank by market cap
Z
48 3i Group
186 3i Infrastructure
84 Admiral
176 Aggreko
157 Alliance
30 Anglo American
46 Antofagasta
152 Ashmore
54 Ashtead
26 Associated British Foods
10 Astra Zeneca
125 Auto Trader
28 Aviva
109 Babcock International
29 BAE Systems
193 Balfour Beatty
19 Barclays
73 Barratt Developments
132 BBA Aviation
147 Beazley
114 Bellway
175 Berendsen
96 Berkeley
22 BHP Billiton
120 B&M European
197 Bodycote
121 Booker
4 BP
3 British American Tobacco
71 British Land
188 Britvic
23 BT
151 BTG
55 Bunzl
56 Burberry
168 Capital & Counties Properties
104 Capita
43 Carnival
199 Centamin
44 Centrica
200 Cineworld
165 Close Brothers
129 Cobham
47 Coca Cola HBC
24 Compass
80 Convatec
27 CRH
92 Croda
155 CYBG
74 DCC
198 Dechra Pharmaceuticals
Price Change
on week
951.0
196.0
1932.0
846.5
724.5
1339.5
1022.0
370.3
1586.0
3184.0
4498.5
344.2
521.5
803.0
599.0
269.4
194.3
613.0
301.4
520.5
3175.0
1258.0
3698.0
1437.0
358.6
937.5
200.8
445.5
4835.0
603.0
750.0
290.1
680.0
2332.0
1786.0
265.3
632.0
5320.0
153.3
197.1
648.0
1544.0
135.5
2600.0
1638.0
286.7
2720.0
3896.0
289.9
6920.0
1901.0
+10.5
–1.4
–33.0
+5.5
+6.0
+59.5
+78.5
+15.5
+15.0
+44.0
+51.5
–11.3
–0.5
–12.0
+15.5
–4.1
–1.4
+3.0
–1.6
+1.5
+5.0
–14.0
+13.0
+86.0
–12.2
+18.0
+5.5
+5.5
+83.0
–8.0
+4.5
–2.3
+16.0
+26.0
+40.0
–8.2
–20.0
+30.0
+1.3
–4.5
–45.5
+22.0
–0.7
+46.0
+8.0
+0.4
+49.0
+88.0
+1.0
+105.0
+52.0
52-week
Yield
high
low
960.0
199.2
2178.0
1066.0
729.0
1409.5
1022.0
375.5
1751.0
3190.0
5508.0
435.9
544.0
1105.0
677.0
298.4
239.2
621.5
323.7
525.0
3252.0
1292.0
3719.0
1480.5
380.6
940.5
212.3
519.3
5643.0
674.0
755.5
397.6
730.0
2465.0
1818.0
324.8
1058.0
5380.0
190.5
236.8
740.0
1715.0
175.4
2612.0
1757.6
344.0
2920.0
4020.0
302.2
7540.0
1954.0
604.5
183.0
1732.0
765.0
566.0
779.8
480.7
274.1
1182.0
2361.0
4007.0
338.9
418.7
803.0
519.5
256.1
164.7
438.9
236.2
361.9
2213.0
733.0
2330.0
968.1
232.5
569.0
168.0
417.5
4258.5
578.0
523.5
282.0
534.5
1988.0
1247.0
263.1
452.4
3349.0
114.9
192.2
534.5
1273.0
110.7
1615.0
1370.7
225.0
2449.0
3072.0
249.4
5860.0
1235.0
2.8
4.0
2.7
3.2
1.8
1.4
4.5
1.5
1.1
4.7
0.8
4.1
3.3
3.6
0.3
1.5
3.0
3.2
2.0
3.4
2.5
5.0
1.7
1.4
1.7
2.3
7.2
3.2
4.8
3.3
5.0
1.7
2.1
0.6
5.1
2.1
9.1
6.1
2.7
3.7
1.3
1.3
2.0
2.0
1.9
1.5
1.0
P/E
Mkt Cap
(£m)
- 9298.1
- 2015.1
24.2 5502.0
17.3 2168.1
- 2549.0
13.5 18814.7
40.6 10075.5
14.5 2619.4
15.9 7917.7
22.9 25206.9
19.2 56939.6
22.1 3348.2
34.5 21095.0
13.0 4059.9
18.0 19072.1
- 1858.2
14.8 33099.4
10.9 6172.9
20.7 3109.7
14.2 2736.3
9.3 3898.8
23.6 2171.7
8.2 5057.5
38.2 30349.4
25.1 3586.0
23.1 1794.9
23.4 3579.5
50.0 87672.4
19.4 90146.2
41.0 6209.8
17.6 1977.4
18.0 28900.6
79.1 2623.0
29.3 7832.2
27.5 7829.5
91.5 2249.1
113.9 4217.3
18.4 11352.3
11.9 1766.2
19.7 10826.4
21.3 1755.0
11.9 2342.3
- 3239.8
32.1 9472.8
23.4 26938.4
- 5594.9
21.4 22747.0
26.5 5264.4
- 2559.3
30.8 6163.8
128.4 1771.3
Rank by market cap
Z
137
7
90
182
98
144
106
36
42
124
41
101
83
6
12
194
184
189
167
105
102
65
181
161
141
134
118
170
150
1
160
130
20
122
139
79
128
61
162
53
39
173
126
110
67
148
158
138
86
163
103
119
Derwent London
Diageo
Direct Line Insurance
Dixons Carphone
EasyJet
Electrocomponents
Evraz
Experian
Ferguson
Foreign & Colonial
Fresnillo
G4S
GKN
Glaxo Smith Kline
Glencore
Grafton Group Units
Greene King
Great Portland Estates
GVC Holdings
Halma
Hammerson
Hargreaves Lansdown
Hastings
Hays
HICL Infrastructure
Hikma Pharmaceuticals
Hiscox
Homeserve
Howdens Joinery
HSBC
IG
IMI
Imperial Brands
Inchcape
Indivior
Informa
Inmarsat
InterContinental Hotels
Intermediate Capital
Intertek
International Airlines Group
International Public Partnership
Intu Properties
Investec
ITV
IWG
Jardine Lloyd Thompson
JD Sports
Johnson Matthey
Jupiter Fund Management
Just Eat
Kaz Minerals
Price Change
on week
2718.0
2568.0
386.0
182.5
1216.0
633.0
291.4
1520.0
4540.0
613.0
1580.0
290.0
321.0
1519.5
352.8
771.0
658.5
590.5
755.0
1105.0
561.0
1371.0
320.4
171.5
160.8
1288.0
1286.0
716.0
421.8
742.8
679.5
1161.0
3242.0
839.0
413.1
686.5
724.0
3852.0
879.5
4948.0
616.5
161.6
244.7
596.5
160.9
298.6
1161.0
310.9
2809.0
529.5
634.0
816.0
–89.0
+18.5
+0.9
–63.0
–74.0
+2.0
+32.3
+5.0
–40.0
+4.0
+47.0
–8.3
+5.3
+29.5
+9.4
–5.5
+0.5
–9.0
+1.0
+7.0
–5.0
+31.0
+0.7
+1.7
–1.6
+169.0
–21.0
+1.5
–2.2
+6.6
+12.5
+1.0
+72.5
nc
+2.0
–10.5
–6.5
–72.0
–7.0
+114.0
+5.0
+0.2
–1.0
+18.5
–5.8
–1.7
–9.0
–32.1
+28.0
+8.0
–1.0
+100.0
52-week
Yield
high
low
3007.0
2594.0
411.3
389.0
1431.0
639.0
291.5
1705.0
5145.0
618.5
1827.0
341.1
376.5
1722.5
353.9
794.5
840.0
739.0
819.5
1178.0
609.5
1447.0
325.0
174.6
179.7
2297.0
1373.0
787.5
475.7
769.5
957.5
1319.0
4130.0
859.5
419.5
733.5
850.5
4468.0
926.5
4948.0
633.5
162.2
316.0
627.5
219.6
365.2
1224.0
456.0
3540.0
546.5
715.0
816.0
2359.0
1956.5
333.8
180.8
873.5
300.4
125.8
1383.0
4142.0
492.6
1091.0
220.0
299.6
1459.0
174.1
469.0
649.5
587.5
594.0
886.5
530.5
1148.0
209.0
128.9
159.5
1119.0
982.0
523.0
356.0
546.9
450.7
911.0
3120.0
590.5
279.3
629.5
603.0
3155.3
573.5
3038.0
362.7
151.5
244.7
448.4
160.9
237.8
947.5
258.4
2727.0
393.4
496.0
171.2
1.6
2.3
3.8
4.4
1.9
2.1
2.2
1.6
1.5
3.2
2.7
5.3
0.8
1.6
4.9
1.7
1.2
4.0
1.8
3.1
1.7
4.9
2.0
1.9
1.8
2.5
5.2
4.6
3.3
4.8
2.5
2.3
2.8
5.8
2.0
2.9
1.3
2.9
4.1
5.6
3.6
4.0
1.7
2.8
0.5
2.6
2.8
-
P/E
Mkt Cap
(£m)
51.7 3029.2
23.8 64648.0
16.6 5307.5
8.6 2104.8
19.5 4830.0
30.4 2795.0
- 4173.0
22.1 14203.1
25.6 11489.8
- 3357.7
26.6 11642.9
15.8 4499.6
22.9 5512.9
38.6 74726.8
30.5 50784.6
19.5 1827.0
13.5 2041.1
- 1929.3
- 2270.0
32.3 4190.0
14.0 4450.0
33.1 6502.9
22.6 2105.7
19.2 2474.7
- 2877.3
24.1 3098.2
11.1 3674.6
30.3 2224.7
14.4 2654.8
96.5 148932.4
14.7 2493.6
24.2 3157.6
30.5 31081.4
19.7 3499.2
22.1 2978.4
27.5 5656.8
21.6 3301.7
22.2 7318.4
11.8 2467.4
29.2 7985.6
8.5 12933.2
9.4 2181.3
21.9 3315.8
12.2 3976.4
14.5 6476.9
20.7 2730.3
21.5 2543.0
16.9 3025.8
14.0 5436.4
17.1 2423.5
60.4 4306.8
16.3 3645.2
Rank by market cap
Z
66
172
57
34
15
38
145
95
82
113
100
99
143
88
58
77
196
18
154
75
85
195
45
142
94
123
159
52
136
133
108
78
14
62
11
171
16
127
87
116
13
135
32
187
21
2
5
112
115
63
169
Kingfisher
Ladbrokes Coral
Land Securities
Legal & General
Lloyds Banking Group
London Stock Exchange
Man
Marks Spencer
Mediclinic International
Meggitt
Melrose
Merlin Entertainments
Metro Bank
Micro Focus International
Mondi
Morrison Supermarkets
National Express
National Grid
Nex Group
Next
NMC Health
Ocado
Old Mutual
Paysafe
Pearson
Pennon
Pershing Square
Persimmon
Phoenix Group Holdings
Playtech
Polymetal International
Paddy Power Betfair
Prudential
Randgold Resources
Reckitt Benckiser
Redrow
Relx
Renishaw
Rentokil International
Rightmove
Rio Tinto
RIT Capital Partners
Rolls-Royce
Rotork
Royal Bank Of Scotland
Royal Dutch Shell A
Royal Dutch Shell B
Royal Mail
RPC
RSA Insurance
Saga
Price Change
on week
295.4
116.0
988.5
263.2
64.9
3976.0
167.8
312.9
753.0
506.0
235.1
460.5
3490.0
2314.0
2096.0
251.4
353.9
970.2
677.0
4143.0
2670.0
289.4
210.1
581.5
621.5
811.5
1045.0
2616.0
775.0
977.0
945.5
6805.0
1821.5
7570.0
7381.0
601.5
1667.0
4551.0
294.4
4035.0
3661.0
1957.0
906.5
228.5
255.8
2142.5
2172.5
393.2
914.5
666.0
200.6
+2.3
–3.3
–13.5
–3.6
+1.0
+32.0
+3.0
–4.2
+32.5
+9.1
+4.8
nc
+14.0
+140.0
+28.0
+7.8
–8.6
+9.9
+12.0
–7.0
+340.0
+5.9
+6.4
–1.0
+16.5
+11.0
–42.0
+95.0
+7.0
+0.5
+15.0
–375.0
+10.5
+75.0
+124.0
+14.0
–3.0
+90.0
–1.1
–14.0
+231.5
+20.0
+5.5
+2.7
–1.7
+28.0
+27.0
+1.0
+32.5
+14.0
+2.3
52-week
Yield
high
low
386.2
162.0
1133.0
276.0
73.1
3983.0
169.0
395.5
1040.0
510.0
261.2
537.0
3834.0
2660.0
2116.0
252.9
380.0
1206.6
848.8
5680.0
2670.0
325.0
229.1
595.0
880.0
944.0
1250.0
2631.0
893.5
1016.0
1115.0
9635.0
1885.5
8015.0
8108.0
611.5
1717.0
4607.0
299.3
4346.0
3679.5
1979.0
979.0
267.4
269.0
2282.5
2377.5
525.0
1079.0
666.0
225.9
293.1
111.3
939.0
205.7
52.4
2621.0
108.3
309.9
679.0
410.6
145.8
425.9
2397.0
1955.0
1511.0
192.5
334.7
922.5
464.5
3617.0
1282.0
238.5
184.9
305.7
573.0
768.0
1045.0
1663.0
697.5
767.0
731.5
6805.0
1304.5
5470.0
6514.0
369.1
1282.0
2416.0
206.0
3631.0
2257.0
1700.0
639.5
194.6
170.4
1798.5
1882.5
391.8
720.5
495.9
182.7
3.4
2.6
3.8
5.4
3.9
1.1
4.2
6.0
1.1
3.0
0.3
1.4
2.6
2.4
2.0
3.5
4.9
5.7
3.8
0.4
4.2
8.4
4.2
4.2
5.9
2.9
1.9
1.9
2.2
1.0
2.1
1.7
2.0
1.0
1.1
1.1
3.2
0.5
2.2
6.8
6.7
5.7
1.9
2.4
3.8
P/E
Mkt Cap
(£m)
10.9
69.1
10.2
30.9
46.9
43.5
24.3
13.5
22.2
45.0
18.5
19.4
15.4
18.6
26.5
9.5
43.4
161.7
20.8
25.7
20.5
13.3
15.7
12.6
24.3
31.3
24.7
9.5
29.9
32.2
7.9
29.6
17.7
26.3
28.4
28.8
14.4
24.9
59.5
14.3
6494.5
2221.0
7816.6
15674.5
46579.4
13788.1
2779.6
5083.8
5549.6
3925.3
4563.8
4677.8
2805.7
5314.8
7697.4
5871.9
1811.0
33270.6
2570.8
6092.5
5454.4
1823.5
10357.9
2819.9
5112.4
3379.5
2509.3
8073.6
3044.7
3100.5
4066.7
5731.6
47100.8
7115.4
51884.3
2224.4
34135.2
3312.6
5409.1
3732.5
50438.9
3058.9
16680.9
1988.3
30379.0
95913.2
81370.7
3932.0
3794.6
6810.5
2242.7
Rank by market cap
Z
60
93
49
76
91
89
146
17
33
97
40
72
183
81
164
140
107
178
37
156
25
69
50
191
131
68
180
35
190
153
117
59
177
149
185
9
70
166
8
111
64
179
192
174
51
31
Sage
Sainsbury, J
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
TalkTalk
Tate & Lyle
Taylor Wimpey
Templeton Emerging Markets
Tesco
Thomas Cook
TP Icap
Travis Perkins
Tui
Tullow Oil
UBM
UDG Healthcare
Unilever
United Utilities
Vedanta Resources
Vodafone
Weir
Whitbread
William Hill
Witan Investment Trust
Wood
Worldpay
WPP
Price Change
on week
693.5
236.1
3376.0
429.0
527.5
2249.0
987.5
3750.0
955.0
497.3
1391.0
1565.0
1839.0
2349.0
510.5
2423.0
5670.0
391.0
1404.0
537.0
777.1
1189.0
441.6
197.0
678.5
196.8
764.5
184.2
124.8
465.2
1471.0
1306.0
156.5
678.5
811.5
4510.5
913.0
822.0
219.6
1813.0
3677.0
248.8
1041.0
568.0
419.0
1437.0
–0.5
–1.0
–4.0
+8.5
+5.5
+28.0
nc
–14.5
+3.0
–0.3
+23.0
+16.0
+17.0
+65.0
+33.1
–2.0
+60.0
–11.2
–33.0
+5.5
+25.7
nc
+10.0
+3.0
+3.0
+4.0
+21.0
+7.7
+0.6
–3.8
–12.0
–19.0
+4.2
–18.0
+8.0
+57.0
+15.5
+68.0
+0.6
+72.0
–116.0
+8.6
+9.0
–6.0
–4.6
–127.0
52-week
Yield
high
low
756.0
281.7
3503.0
431.9
540.5
2553.0
994.5
5323.0
1007.0
501.5
1391.0
1684.0
1863.0
2419.0
515.0
2834.0
5835.0
418.0
1599.0
538.5
846.7
1238.0
441.6
219.1
807.0
203.3
764.5
218.7
125.7
497.5
1702.0
1340.0
333.6
764.5
866.5
4519.0
1056.0
1102.0
233.1
2083.0
4307.0
324.2
1047.0
894.5
430.4
1921.0
599.0
228.7
2657.0
302.3
403.3
2073.0
872.5
3613.0
750.5
380.1
1067.0
1339.0
1447.0
1708.0
224.9
1906.0
4125.0
268.3
1379.0
315.0
607.1
908.5
424.0
152.5
659.0
138.9
558.5
160.6
66.2
333.6
1331.0
1001.0
145.6
673.5
612.5
3092.0
854.5
489.4
190.5
1492.0
3408.0
240.0
814.0
565.0
256.6
1420.0
P/E
Mkt Cap
(£m)
2.0 30.7 7495.9
5.0 14.3 5169.8
2.6 19.4 9013.0
0.7
- 6001.5
3.1 7.5 5266.5
3.6 16.1 5308.9
1.5 22.8 2755.2
0.6 74.9 34040.3
3.5 26.2 16416.6
2.7 22.6 5045.9
1.7 18.5 12170.8
2.7 14.5 6189.1
2.4 18.8 2041.6
2.5 15.2 5562.9
0.4
- 2352.8
2.2 260.5 2888.6
1.3 32.0 4169.7
- 10.4 2159.8
6.4 8.9 14158.0
1.0 33.8 2551.9
- 1682.0 25574.4
2.5 55.8 6284.9
4.3 23.7 8741.3
8.1 32.8 1881.3
4.1 12.5 3152.9
0.9 11.0 6439.2
1.1
- 2132.0
- 227.4 15081.8
0.4 178.3 1916.7
3.6 29.4 2577.8
3.0 294.2 3693.3
4.1 19.6 7666.7
- 2164.5
3.2 30.3 2672.7
1.2 34.0 2015.2
2.6 25.3 57739.7
4.2 14.4 6225.6
4.7
- 2277.7
5.5
- 58466.1
2.4 90.7 3956.9
2.5 15.9 6743.4
5.0 13.2 2134.2
1.8
- 1864.1
4.5 96.1 2176.4
0.5 49.9 8380.0
3.9 10.6 18314.1
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
10
The Sunday Times August 27, 2017
BUSINESS
It’s better to start off
with nothing than to
fret about money
TECH BUBBLE DANIEL DUNKLEY
Child
gamers
turned to
gamblers
in a click
Luke Johnson Animal Spirits
S
tarting a business doesn’t
have to be complicated.
Sometimes, making it simple
works better.
To begin with, you don’t
need a breakthrough idea.
Lots of businesses start by
chance rather than design.
I discovered my calling by
accident, at the age of 18.
I was hosting riotous parties for fun in
my university digs. The authorities
threatened to kick me out. So my co-host
and I persuaded the local nightclub,
which was normally shut on Monday
evenings, to let us use it that night to
throw parties for our student friends,
who would pay for drinks.
We then realised we could charge
money on the door — and our student
parties became a business.
Consequently, my medical career
started to fade from view. There had
been no commercial plan — just a desire
to meet more girls and avoid getting
thrown out of university.
You don’t need lots of capital, either.
In 1980, when we started our parties, we
had no money at all. Obsessing about
raising money can slow you down, and
often leads to waste. Moreover, lots of
would-be entrepreneurs use a lack of
capital as an excuse to defer taking the
plunge. Anita Roddick, the founder of
the Body Shop, said in her book Business
as Unusual: “Every element of our
success was really down to the fact that I
had no money.” That included the
concept of recycling bottles, because she
couldn’t afford to buy enough new ones,
and painting the walls of her first shop
dark green; it covered up the damp
patches. Having no money forces you to
be both creative and frugal — valuable
skills for any entrepreneur to possess.
In 2017, a physical location is no
longer a requirement for many types of
From time to
time, those
who don’t
know what
they don’t
know break
the rules and
succeed
enterprise, thanks to the digital
revolution.
For example, WordPress, the software
behind about a quarter of the world’s
websites, is run by a 400-strong team
who are mostly working from their
homes scattered across 141 cities in 28
countries. This means the company
never discriminates against potential
recruits just because of their location. It
can hire the best people from anywhere
in the world. Big headquarters buildings
are history; the most dynamic
companies operate in a distributed
manner, rather than via a traditional
command-and-control model directed
from the centre.
Another thing entrepreneurs don’t
have to be endowed with is experience.
Everyone starts somewhere, and from
time to time those who don’t know what
they don’t know can break the rules and
succeed. Simon Mottram, founder of the
cyclewear brand Rapha, which was
recently sold for £200m, said: “I had no
track record of creating clothing or
building an ecommerce business. I had
zero cycling experience, aside from over
30 years as a customer.”
You can always hire experts and
obtain advice — and besides, when
you’re starting out, making mistakes is
how you learn.
Entrepreneurs don’t need to have
received lots of qualifications, or come
from privilege, in order to do well. This
newspaper’s Rich List is packed with
high achievers who lack university
degrees, including the jeweller Laurence
Graff, Mike Ashley of Sports Direct, the
housebuilder Tony Pidgley, Phones 4u
billionaire John Caudwell, Simon Cowell
and Sir Richard Branson.
Others from humble backgrounds
who are now billionaires include
François-Henri Pinault of Kering,
Leonardo Del Vecchio of Luxottica,
Howard Schultz of Starbucks and the
designer Ralph Lauren.
I have met plenty of business
founders from modest beginnings who
have an essential fire in their bellies
partly because they came from nothing.
By contrast, an awful lot of rich people
end up with spoilt children who are
entirely lacking in ambition.
Meanwhile, not every business
founder wants to start an airline. Huge
ambition is not always appropriate;
thousands are content to develop a
niche operation servicing select
customers, generating a decent living
and making the owner proud.
There is a lot of focus in the start-up
world on “scaling” businesses and
becoming the next Facebook.
Yet that journey is only available to a
minuscule number — and, anyway, it
doesn’t suit the vast majority of
entrepreneurs. As David Ogilvy, the
legendary ad man, put it: “The pursuit of
excellence is less profitable than the
pursuit of bigness, but it can be more
satisfying.”
What you must possess, however, if
you want to build a genuine business is
commitment, numeracy and
enthusiasm. In a way, these personal
characteristics — emotional and
intellectual qualities — are the magic
ingredients.
It is no coincidence that almost all of
the best venture capitalists say
management is the most important
element of any business proposition —
rather than the concept, or the financial
circumstances. Ultimately, human
capital matters far, far more than any
physical assets.
Luke Johnson is chairman of Risk Capital
Partners and the Institute of Cancer
Research. luke@riskcapitalpartners.co.uk
@LukeJohnsonRCP
On the case: Sarah
Harrison, chief of the
Gambling Commission
The video game CounterStrike: Global Offensive
became a problem for Luke
when his apprenticeship
wages began to disappear.
The first-person shoot-em-up,
played by 26m people
worldwide, allows gamers to
buy “skins”— cosmetic
updates that alter the
appearance of its many
weapons and characters.
For most, skins are simply
a way for gamers to share
their experience with
others, but for people like
Luke, 17, they have become a
serious problem. Unlicensed
betting sites offering the
opportunity to gamble skins
have emerged from the
darker corners of the
internet, leaving young
gamers hooked on gambling
from an early age.
After enjoying some early
wins on a black market site,
Luke wasted more than
£2,000 on skins betting in
three months.
He told his story on a
gambling forum: “I can’t get
over what I have lost in the
past few months, so I
constantly add more to win it
back. I can’t tell my parents,
they will not understand and
only be really angry at me.”
Unregulated video game
betting sites have brought a
black market gambling crisis
into Britain’s bedrooms. Most
of the sites are targeted at
young people and unwittingly
funded by parents’ debit and
credit cards.
The games industry
generates more than $100bn
(£78bn) in annual revenues —
roughly 10 times what
Hollywood makes in box
office ticket sales. But the
online currencies created
to make games more
interesting — and pump up
publishing revenues — are
being used by children to bet
on the outcome of
multimillion-pound
professional gaming
tournaments, or as tokens to
play casino-like games.
The industry claims to be
rooting out this bad practice,
but there is little incentive to
do much more than pay lip
service to self-regulation.
Fifa, Britain’s most popular
football game, has been
swept up in the crisis, with
third-party websites offering
the chance to gamble using its
in-game virtual currency.
Such sites have drawn the
attention of UK gambling
authorities, with several
investigations already under
way. The issue is also to be
discussed by the European
parliament as part of a special
event on September 6.
The Gambling Commission
is hot on the topic. According
to its chief executive, Sarah
Harrison, roughly 20% of the
sites now being shut down by
the commission are those
that trade in-game credits.
The commission struck its
first blow in February. Craig
Douglas, a YouTube
personality known by the
alias NepentheZ, and his
business partner Dylan Rigby
were prosecuted for running
a website connected to Fifa,
known as FutGalaxy.
FutGalaxy allowed gamers,
many underage, to bet Fifa’s
virtual currency on real
football matches and virtual
games. Douglas was fined
£91,000 for promoting on
YouTube a site in which he
also had a business interest.
Rigby was fined £164,000.
In a similar case in
America, two YouTubers
were sued for running CSGO
Lotto, which allowed
gambling with CounterStrike: Global Offensive skins.
Trevor Martin, a YouTube
personality with 5m
subscribers, was accused of
promoting CSGO Lotto
without disclosing his
stake in the venture. The case
led to a class-action lawsuit
being filed against Martin and
Valve Corporation, the
company behind CounterStrike, whose “Steam”
marketplace allows thirdparty sites to link to its games.
However, campaigners
worry this is all too late for a
generation raised on such
games.
“People are growing up
exposed to this,” said Marc
Etches, chief executive of
Gamble Aware. “There is a
blurred line between
gambling and video games.”
@MrDanDunkley
MONEY
11
The Sunday Times August 27, 2017
MONEY
THE POST-MATCH
BEERS ARE ON HIM
PAGE 18
INVESTORS MAY BE
LEFT IN THE DARK
BY NEW RULES
FROM BRUSSELS
IAN KING, PAGE 12
TO SCRAP OR NOT TO
SCRAP? THAT IS THE
£2,000 QUESTION
PAGE 13
12
14
PUZZLES
CROSSWORDS,
SUDOKU & MORE,
PAGES 16-17
Follow us on Twitter @ST_Money
Parents caught in childcare chaos
LORNE CAMPBELL
A government
scheme providing
30 hours of free care
has been branded
an ‘absolute joke’
as people struggle
to register, report
Nina Montagu-Smith
and Lottie Jackson
T
he government’s Childcare
Choices programme is descending into chaos ahead
of this week’s deadline for
parents to take full advantage
of the benefits. Under the
scheme, launched in April,
parents of three and fouryear-old children in England
are entitled to 30 hours a
week of free care — up from 15 hours now.
They must sign up by Thursday to be eligible for the extra free hours during the
coming school term.
Separately, parents of children aged
up to 12 can get tax relief on childcare
costs. For every £8 paid, the government
adds £2, up to a maximum of £2,000 a
year for each child — the equivalent of
20% tax relief.
But the scheme has been plagued with
IT problems, prompting concerns among
parents that they may lose out on hundreds of pounds.
Many parents and childcare providers
have told Money they have yet to receive
the access codes they need to register
in time to qualify for the extra 15 hours.
Others complain that the codes they have
received do not work.
HM Revenue & Customs said last week
it had begun a compensation scheme for
parents unable to apply for tax relief
on childcare fees. They will be able to
apply directly to HMRC rather than
through the childcare website.
However, the Department for Education admitted it had no policy in place to
help parents in England who miss this
week’s deadline to register for an extra
15 hours of free childcare for three and
four-year-olds. It said: “Parents should
speak to their preferred provider to see
what options there are.”
Last week Nicky Morgan, chairwoman
of the Treasury select committee, wrote
to Jon Thompson, permanent secretary
at HMRC, to demand answers. “It’s concerning that some parents have struggled
to apply for childcare funding due to
technical issues with the government’s
childcare service website,” said Morgan.
Helen Galletley has been struggling to register on the website since her son, Jacob, turned three last month
If I do not receive
the access code
by August 31, it will
cost me £840
YOUR STORY
Have you tried to register with
Childcare Choices? What happened?
Email money@sundaytimes.co.uk
“Thousands of parents are still unable
to apply for the childcare to which they
are entitled in the way that the government has envisaged.”
Helen Galletley, 38, a retail store manager from Holmfirth, West Yorkshire, is
relying on receiving 30 free hours of
childcare for her son Jacob so she and her
wife, also Helen, 41, can both go to work.
After battling with the Childcare
Choices website for several weeks, Galletley has yet to be able to register. She risks
losing a total of £840 for the coming term
if she misses Thursday’s deadline.
Galletley started her application after
Jacob turned three in July. She entered
her government gateway identity number and password — used for filing tax
returns and other HMRC services — and
a code was sent to her mobile phone.
But when she entered the code in her
online application on August 3, the system told her it did not match any records
— that is, it could not find her details. She
called the helpline (0300 123 4097).
“I was told there was a technical problem with my application and they would
It’s the final lap for PPI, so don’t
waste time on a claims chaser
The deadline is
looming for people
who were mis-sold
policies, says
Aimee Donnellan
Britain’s biggest lenders
will send 1.2m letters to
customers in the coming
weeks to tell them they could
be owed thousands of pounds
in compensation for mis-sold
payment protection
insurance (PPI).
The postal assault is part of
a wider consumer campaign
to be launched by the
financial watchdog this week.
Arnold Schwarzenegger is
rumoured to be the face of
the marketing drive that will
encourage consumers to
make new claims and
resubmit rejected ones.
The clock is ticking. The
Financial Conduct Authority
(FCA) has set a deadline of
August 2019 for consumers to
lodge complaints. About 12m
claims have already resulted
in customers receiving
compensation.
Television, radio and
cinema advertisements, as
well as giant billboards, will
set out how members of the
public can win compensation
without lining the pockets of
claims chasers.
Claims companies often
take about 40% of any claim
as a commission. A recent
Sunday Times investigation
into these “no win no fee”
outfits revealed that directors
and owners of the top
five companies had taken
nearly £65m in loans and
dividends over the past
three years.
PPI claims firms intend to
continue to harass people
into using their services.
They are ramping up
their own TV and radio
advertising, as well as calling
and texting customers.
The 1.2m letters being sent
by the banks mainly concern
previously rejected claims
that the lenders are
reconsidering in the wake of a
2014 Supreme Court ruling.
The court decided that
Susan Plevin, a retired
lecturer, was due
compensation because the
72% commission on her
PPI policy had not been
disclosed properly to her.
A study published in 2015
by Autonomous Research,
chaired by the former City
minister Lord Myners,
warned the financial
services industry could face a
£33bn bill if the court ruling
on disclosing commission
were applied across the
board.
Banks disagree with these
estimates. They say 30%-40%
of recent claims have been
made by time wasters who
either never bought PPI or
did not have an account with
the respective bank.
Lenders have paid
out more than £30bn in
compensation and recently
set aside another £1.8bn for
future claims.
More than 64m PPI
policies were sold to about
30m people between 1990
and 2010. PPI offered peace
of mind that your mortgage
or loan would be repaid if you
lost your job or were struck
down with a serious illness.
The FCA, however,
concluded that many
customers did not need or
understand the cover.
Martin Lewis, founder of
the consumer website
moneysavingexpert.com,
said the typical PPI policy
had commission of 67%
and paid out rates of
about 10%.
Lewis expects a barrage of
claims to continue to hit the
banks. “Some people think
PPI has been dealt with, but
this will be the beginning of
the main phase.”
Lewis said he had opposed
a deadline on claims and
banks needed to make it
easier for customers to
establish if they had been
sold PPI in the past.
How to claim compensation
Want to lodge a claim without
handing money to a costly
claim company? Follow
these simple steps:
l Make a list of the banks
you have held accounts with
over the past 30 years.
l Locate as much paperwork
as possible relating to loans,
mortgages, store cards,
overdrafts, financing deals
Continued on page 12 →
raise the issue with the technical team,”
Galletley said. “I asked for someone to
call me back to update me. I’m still waiting for that call back.”
A few days later, she was told her application was “stuck” in the system. A third
time she asked that someone senior call
her back — to no avail.
“If I do not receive the access code
before the August 31 deadline for registering, I will not get the additional 15 hours
free for this term,” she said. “This will
cost me £840. The people on the helpline
just tell me that there’s no timescale to fix
the problem.”
Childcare providers have reported
similar concerns. One, Sarah Firth, from
Letchworth in Hertfordshire, said even
after parents had received codes they
could not find her on the system. She has
tried since April to get the problem
solved, calling multiple times. On one
occasion, she was cut off after being told
the service was experiencing high levels
of calls.
“Part of my trouble is I can only
call when I am child-free, which is rarely.
I’m a childminder and a mother of two
young children. It’s cost me a fortune
in calls.”
These are far from the only problems
reported to Money. The site frequently
crashes, causing delays and the need to
re-register, and some providers have not
received payments made by parents.
Emma Appleby, a childminder from
Norfolk, said: “It has taken the Childcare
Choices team seven months to change my
address and in that time they refused to
talk to me as their records were showing
my old address. They finally amended it
this week and were happy to talk to me.
TAX RELIEF FOR
WORKING FAMILIES
Parents can apply for tax relief on
childcare fees for youngsters under
16, and for an additional 15 hours of
free care a week for pre-schoolers,
through the Childcare Choices
website (childcarechoices.gov.uk).
These benefits are available to
parents who are in work and each
earning less than £100,000 a year.
If you have had problems
registering to claim tax relief on
childcare fees, you can claim
compensation: find out more at
tinyurl.com/childcarecomp.
And today I received seven copies of the
same letter.”
Sofi Sullivan, a childminder from
Ross-on-Wye in Herefordshire, said:
“This month, parents have not been able
to pay us using the scheme. They have
had to pay us direct and then we have
had to invoice HMRC for them to be
reimbursed the tax relief. It’s an absolute
joke.”
The new system replaces the childcare
voucher scheme through which employees could claim up to £930 in tax and
national insurance contributions relief
per year, per parent (depending on their
tax bracket) via their employers for
children up to the age of 15.
That programme closes next April, but
parents already enrolled can continue to
use it if they prefer to remain in the old
system.
12
The Sunday Times August 27, 2017
MONEY
BRIEFING
BUMPER TAX YIELD
ON MOVING HOME
YOUNG PAY £2,861 A
YEAR TO RUN A CAR
AUGUST SETS RECORD
FOR CASH DISPENSED
If you would like to receive the
free weekly Money email bulletin,
visit thesundaytimes.co.uk/
moneybulletin. You must be
a digital subscriber.
The tax take from family
estates and homes
continues to rise. HM
Revenue & Customs figures
show the government
raked in a record £1.2bn in
stamp duty on house
purchases in July, compared
with £973m in July last year.
Britons also paid £427m
in inheritance tax (IHT) last
month compared with
£380m the year before.
NFU Mutual says IHT
receipts soared by 20% to
£2bn in the first four months
of 2017 — the fastest rise in
seven years.
At £2,861, the average yearly
cost of running a car equates
to 20% of a young driver’s
£14,402 average take-home
pay, the app-based insurer
Cuvva has found.
August will be a record
month for cash withdrawals
in the UK, according to
forecasts by the ATM
Industry Association —
despite the rise in popularity
of contactless payments.
As more people have chosen
to take holidays in the
UK this summer, the
organisation is predicting
that consumers will break
last August’s cash
withdrawal record of £280m,
as recorded by the cash
machine network Link,
to pay for days out and
holiday treats.
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
TOP FIRMS’ PENSION
DEFICITS HIT £62BN
Pension deficits of the UK’s
350 largest listed firms rose
£12bn to £62bn in 2016, 70%
of total pre-tax profits, data
from Barnett Waddingham
will show this week.
HOMES IN CAMBRIDGE HOW THE FOOTSIE
COST MOST TO RUN
HAS PERFORMED
QE like heroin:
need ever
increasing
fixes to create
a high
Lord Macpherson of Earls
Court tweets about the
Bank of England’s policy
of printing more money
The cost of running a home
in the UK now accounts for
almost half of household
income where a couple are
both working, according to a
study by insurer More Than.
The group found the average
three-bedroom house costs
£18,197 a year, including
mortgage repayments. This
is the equivalent of 42% of
take-home pay for a couple
who each earn the average
wage of £27,271. Research
found houses were cheapest
to run in Port Talbot, south
Wales, and most expensive
in Cambridge.
The FTSE 100 edged up 1% last week to close at 7,401 as
shares in the troubled doorstep lender Provident Financial
recovered on news of a planned management shake-up.
+8.6%
over a year
(up 13% with dividends)
+8.5%
over three years
(up 21.9% with dividends)
+28.1%
over five years
(up 54.8% with dividends)
+19%
over 10 years
(up 73.7% with dividends)
Inflation: In July, CPI was 2.6% and RPI was 3.6%
Look out: this EU change could
leave private investors in the dark
New rules on fees might spell the end for City analysts — and the informed commentary people use when buying and selling shares
Bundled commissions, he argued,
were also in some cases encouraging
fund managers to trade on behalf of their
clients more than they needed to. In addition, they have created grubby situations
in which, for example, an investment
bank has won profitable work floating a
company on the stock market because its
analysts have written obligingly about it.
It is also an open secret in the City that
a lot of analyst research goes unread
because it is useless. Northern Rock
was still the subject of many more “buy”
recommendations than “sell” even as
uring last year’s referendum queues were forming outside its brancampaign, the “leave” side ches in September 2007.
The UK stock market’s biggest beasts,
frequently accused the EU of
churning out rules with little such as BP, Royal Dutch Shell and Vodaregard for their likely impact fone, are followed by legions of analysts.
on the lives of ordinary folk It is hard to see how many of them come
far from Brussels. That was up with original ideas or insights that genalways debatable: even the uinely benefit their clients.
So for anyone with their money tied up
Department for Exiting the
EU has tacitly acknowledged in a pension fund, the EU legislation
in its position papers that some regula- sounds pretty good, as the costs assocition from Brussels benefits consumers by ated with managing their retirement savstandardising safety and quality stan- ings should fall.
The new rules won’t be so good,
dards and making them the paramount
though, for the millions of Britons who
consideration when goods are sold.
There is, nonetheless, a piece of EU like to buy and sell shares on their own
legislation looming that will undoubtedly account or as part of a self-invested perhave consequences for millions of private sonal pension.
Some fund managers, including M&G,
investors who buy and sell shares — and
have said they will absorb the cost of
not necessarily for the better.
If you know anyone who works in analyst research themselves. Yet with a
financial services and you say the words few exceptions, getting someone to pay
“Mifid II” to them, chances are they will for something they previously got for
put their head in their hands. Unless, of nothing is hard. The expectation is that,
course, they work in their firm’s compli- when fund managers have to stump up
ance department and are raking in over- themselves for research they previously
regarded as free, they will stop doing so.
time in readiness for the rule change.
If fund managers decide they can
The second phase of the Markets
live without most analyst
in Financial Instruments Directresearch, it will mean fewer
ive, to give it its full name,
analysts. This means less
comes into effect on Januinformed
commentary
ary 3 next year. The first
about individual compaphase, implemented in
nies. And that, in turn,
November 2007, sought
Even though
will hit ordinary investo increase competition
work stops,
tors, many of whom only
in financial services and
expenses run on
have their interest piqued
harmonise rules. This next
Cato the Elder
in a particular company
one aims to strengthen prowhen a piece of broker
tection for investors in the
research is quoted in the media.
wake of the financial crisis and to
The measure may also make establishimprove transparency.
So far, so good. Yet among the changes ing the share price of an individual comproposed is something called “un- pany on the market more difficult. Broker
bundling”. This will require stockbrokers recommendations assist “price formato charge fund managers separately for tion” by offering reasons to buy or sell.
This is particularly likely to be the case
research produced by their analysts. At
present, most lump in the cost of this for the small and medium-sized busiwith their broking commission which, nesses on which many private investors
in effect, means the clients of the fund love to take a punt. Bank of America Merrill Lynch estimates analyst coverage of
managers pick up the tab.
There is a logic to this: in 2001, Paul small and medium-sized companies had,
(now Lord) Myners, then a leading fund by March this year, fallen by one-third
manager and later a City minister in the since September 2011.
Without research to generate interest
Brown government, wrote a report in
which he concluded broking commis- in many of these companies, the ease
sions were too high and investors were with which their shares can be bought or
sold — “liquidity”, in the jargon — will
being ripped off.
TIMOTHY D EASLEY
PERSONAL
ACCOUNT
IAN KING
D
HOW TO
INVEST
£10,000
The second in our series on
building a balanced portfolio
Alan Miller,
chief
investment
officer of
SCM Direct
In our regular series we ask
an expert for tips on how to
invest £10,000. This week
Alan Miller of the online
investment manager SCM
Direct explains how to use
exchange-traded funds
(ETFs) to create balance.
ETFs are like shares, in
that they can be bought
and sold using a stockbroker.
They provide a low-cost
way of tracking a particular
market, such as the
FTSE 100. Miller, 53, is
critical of the hefty fees
levied by many poorly
performing funds with
traditional active managers.
He invests alongside his
clients in SCM’s pure-ETF
portfolios. “For long-term
investors, I would
recommend a portfolio of
70% in shares and 30% in
bonds,” he said. “This
ensures exposure to rising
markets in the good years
and protection during
corrections.
“After the falls in sterling
since Brexit, it is a good
time to invest partly via
sterling-hedged ETFs.”
For the theoretical
£10,000, Miller recommends
Investors could miss out on potential star performers — analyst coverage of small and medium-sized companies is down by an estimated one-third since 2011
decline. Some smaller companies may
conclude it is not worth their while to be
listed on the UK stock market and choose
to float elsewhere, depriving small shareholders of potentially exciting investment opportunities.
All is not yet lost: smaller companies
may end up paying analysts to cover
them — a similar arrangement to the one
in which issuers of bonds pay ratings
agencies such as Moody’s and Standard &
Poor’s to assess their creditworthiness.
There are several businesses already
operating along these lines, such as
Edison Investment Research, which has
won plaudits by refusing to give coverage
to companies about which it is sceptical.
Provided there is enough of such
research, and it is clearly branded as a
marketing communication and recognised as such by investors, it may not be
such a bad outcome after all.
Ian Cowie is away
WE NEED A BAN ON PENSION COLD CALLS NOW, NOT WHEN MINISTERS GET ROUND TO IT
As Money reported last
week, the Department for
Work and Pensions (DWP)
plans to ban cold calls
relating to pensions, as part
of efforts to tackle fraud.
Criminals have plundered
an estimated £44m
from retirement savings
during the past three years,
according to official figures,
and the scams have
increased since 2015, when
the former chancellor
George Osborne abolished
the obligation to buy an
annuity on retirement and
allowed people aged 55 and
over to withdraw money
from their pension pots.
So no one can doubt the
need for a clampdown on
nuisance marketing. A fair
number of these calls, text
messages and emails are
coming from the claims
management firms that
were so successful in
persuading us to make
claims for mis-sold payment
protection insurance. More
recently, some have been
encouraging people to
make fraudulent claims
for falling ill while on a
package holiday.
Before everyone starts
celebrating, though, the
DWP has said it will legislate
on cold calls only when
parliamentary time allows.
As Sir Steve Webb, a former
pensions minister, has
pointed out, this is not good
enough. He notes that, even
if a measure were included
in an act of parliament some
time next year, there would
need to be more detailed
secondary legislation.
Unless ministers make
this a priority, Webb
suggests, pensions cold
calling could still be going
on in 2019 and 2020.
There is also a danger
that exemptions from the
proposed ban — where
customers have requested
information from a
company, or there is an
existing client relationship
— will create loopholes that
scammers can exploit. So
the legislation will need to
be formulated carefully.
This is a measure that
was promised as long ago
as last year’s autumn
statement. Before the
general election got in the
way, it was supposed to
have been enacted in the
Financial Guidance and
Claims Bill now grinding its
way through parliament.
The government helped
to create this mess. The
government needs to sort it
out — and quickly.
Ian King is business presenter for Sky News
a buy-and-hold strategy with
seven ETFs. This provides a
diverse portfolio containing
about 3,000 shares and
more than 600 bonds, at a
cost of 0.3% a year.
The portfolio has
produced a total return of
7.9% over the year to date.
Here Miller outlines the
ETFs and suggests what to
allocate to each of them.
SPDR FTSE UK All Share
(allocate £3,000)
This ETF, part of State Street
Global Advisors, has risen by
just under 13.7% in the past
year. Its main holdings
include HSBC, which makes
up 6% of the portfolio, and
the oil giants Shell and BP.
The fund tracks the FTSE
All-Share index and includes
companies of all sizes. The
annual charge is 0.2%.
PowerShares FTSE RAFI
US 1000 (£1,400)
This ETF invests in stocks
according to four
fundamental measures of
value rather than simply
their size. It therefore has
much lower exposure to
technology stocks such as
Netflix and Google. It has
delivered 15% growth over
the past 12 months and
costs 0.39% a year.
iShares Core MSCI
Emerging Markets (£1,200)
Focusing on emerging
markets including China,
South Korea, Taiwan, India
and Brazil, this fund offers
exposure to big companies.
Tencent, the leading Chinese
internet provider, makes up
4% of the portfolio, followed
by Samsung, Alibaba and
Taiwan Semiconductor.
The fund has grown 25.8%
over the past year and the
annual cost is 0.25%.
DB X-Trackers MSCI EMU
(£700)
This fund provides exposure
to 10 European countries,
hedged into sterling, and has
an annual charge of 0.25%.
The largest holding is the
French oil company Total,
followed by the drug firms
Sanofi and Bayer. The return
over a year is 20%.
Lyxor JPX-Nikkei 400
(£700)
This ETF provides exposure
to 400 stocks listed in Tokyo
and is hedged into sterling.
It has grown 22% in a year
and costs 0.25%.
UBS Bloomberg Barclays
US Corporate Bond
(£1,500)
This ETF invests in US-listed
corporate bonds, hedged
into sterling, from big names
such as Apple and Goldman
Sachs. The charge is 0.23%
and the return over the
past year was -0.77%.
Pimco Emerging Markets
Local Bond (£1,500)
Brazil, Mexico, India and
China each account for about
14% of the holdings of this
ETF, which invests in bonds
issued by emerging markets
countries and denominated
in local currencies. The value
of the fund has grown 8.1% in
a year and it charges 0.6%.
It’s not too late to claim
→ Continued from page 11
and credit cards before
2010.
l Once you have located
your paperwork look out
for the term PPI on a policy.
Also look out for phrases such
as: accident, sickness and
unemployment insurance
(ASU), account cover, credit
insurance, credit protection,
loan care, loan insurance,
loan protection, loan
repayment insurance,
mortgage payment
protection insurance,
payment cover or protection
plan.
l If you think you have been
mis-sold PPI go to the FCA’s
website at fca.org.uk or call
the watchdog’s hotline on
0800 101 8800 to access free
information and tools to
launch a claim.
l Consumer sites such
as which.co.uk and
moneysavingexpert.com also
offer free tools and template
letters to start your own
claim, which will allow you
to keep 100% of any
compensation you receive.
Writing to the bank
Your letter to your bank
should include your name,
address and previous
addresses they may have on
file for other loans,
mortgages and credit cards.
You should also include the
dates from which you had
the product or PPI, if you
know them.
The bank that sold you
PPI will not charge you to
look into a query and you
should receive a response
in 40 days.
If the bank tells you that
you were sold PPI you need
to decide whether you want
to make a mis-selling
complaint.
What to do if your claim was
previously rejected
If your PPI claim was rejected
but could now be covered by
the Supreme Court ruling,
you are likely to receive a
letter from your bank before
November.
This letter will offer you
the opportunity to resubmit
the claim — and explain that
if the cost of your PPI was
made up of more than 50%
commission and you weren’t
informed, you could get
back the difference plus
interest.
If the court ruling does
not apply to your case but
you still think you might be
entitled to compensation,
you can contact the
ombudsman at financialombudsman.org.uk.
Consumers who appeal
against rejected claims at
present have more than a
50% chance of having their
claim upheld at the biggest
PPI providers.
Making a complaint against
a bank for mis-sold PPI will
not affect your relationship
with that lender.
13
The Sunday Times August 27, 2017
MONEY
Not ready for the scrapheap quite yet
TOM STOCKILL
The offer of a hefty
discount on a new
car is tempting, but
this old diesel is
part of the family,
says Nicholas Hellen
T
he gags started when our car
ticked past 100,000 miles on
the clock. They became a
touch repetitive when, a few
years ago, we breached the
150,000 barrier. Now we are
approaching 180,000 I tell my
children that if they’ll just
keep quiet in the back seat, I’ll
take them the final 50,000
miles to the moon.
How do I make my insurer laugh? Tell
them my car has been stolen. How do I
double the value of my car? Fill it with
diesel. Very original — ha ha.
But now the tables have been turned
and I can afford to smile. Thanks to a
scrappage scheme announced last week
by Ford, our much-mocked jalopy, a
2003 Volkswagen Passat, is going to be
worth a full £2,000 when we trade it in
for a new motor.
Let’s pause a minute. All those years
we’ve been driving in one of the worstpolluting vehicles on the road (it complies with the antediluvian Euro 3 emissions standards) and instead of us being
penalised and ordered off the streets,
Ford — following the example of BMW,
Vauxhall and Mercedes-Benz — will deal
with the problem for us.
The company promises to take our old
diesel off our hands, dispose of it safely
and give us a discount on one of its shiny
new models.
There’s another bonus that those of
you who have never battled with rust,
temperamental electronics and saggy
seats might struggle to understand.
My car does not define me; there is no
hidden meaning in the wheels parked
outside our front door. When invited to
posh parties, you will not find me parking
around the corner. Yet I had been vaguely
dreading the moment I had to step into a
car showroom in search of a replacement
and answer that loaded question: so what
model is sir driving at the moment?
Under the scrappage scheme, it won’t
matter, will it? I’ll just be in a long line of
environmentally responsible people joining the recycling queue. “I just happened
to find this clunker parked outside . . . ”
In fact, we have a higher opinion of our
car than that. Recently it handled a
2,000-mile trip to the Dordogne and the
Alps without a murmur, leaving flashier
models overheating on the hard shoulder. Last Sunday it achieved 58.5mpg on
an excursion involving stop-start London
traffic and steep country lanes: it really
does burn less fuel and emit less carbon
than a petrol car — though diesel vehicles
emit more nitrogen oxides.
The Passat has cost us only £700 a year
in depreciation and £500 in maintenance
for the 11 years we’ve owned it. It has
never let us down and we like it.
But it seems clear the game is up for
diesel and for older vehicles in particular.
From October, cars that do not meet Euro
4 emissions standards — typically petrol
and diesel cars registered before 2005 —
will pay an extra £10 a day on top of the
£11.50 congestion charge to drive in central London between 7am and 6pm on
weekdays.
A number of councils are already
charging higher fees for parking permits
for older diesels. Cities including Nottingham, Bristol, Manchester and Southampton are making plans to establish clean
air zones from 2019, which may involve
charges for driving diesel cars. Last
month Michael Gove, the environment
Diesel is now a dirty word, but Nicholas Hellen’s 14-year-old VW Passat is nudging 180,000 miles and still going strong. It can carry all his cycling gear and ‘recently handled a trip to France without a murmur’
WHAT’S THE BEST SCRAPPAGE DEAL FOR YOU?
Ford
Vauxhall
ll
BMW/Mini
ini
Mercedes-Benz
des-Benz
Which cars can
be traded in?
Any make or model, petrol or
diesel, provided it was first
registered before Jan 1, 2010
Any vehicle considered
Any diesel car rated Euro 4 or
lower — likely to be those
registered before 2011
Any diesel car rated Euro 4 or lower
Which new cars
are available?
Focus, new Fiesta, B-Max,
C-Max and new Kuga, but not the
Mondeo or other larger models
Adam, Corsa, Meriva, GTC, Astra
and new Mokka X, though not all
variants of these models
Petrol or diesel models with
emissions up to 130g/km,
which means most of the
range, plus electric models
Diesel or plug-in versions of most
models or Smart electric drive
How much
discount will
I get?
£2,000, including the value of the
car you trade in
Up to £2,000, including the value
of your old vehicle
£2,000. This is in addition to
the second-hand value of the
car you trade in
Up to £2,000 on diesels and
plug-ins, £1,000 on Smart electrics
— again in addition to the
second-hand value of your old car
How long
have I got?
The new vehicle must be
registered by Dec 31
New car must be ordered and
registered by Sept 30
New car must be registered
by Dec 31
New car must be ordered by Dec 31
and registered by Mar 31, 2018
Anything else in
the small print?
You must have owned your
old car for more than 90 days
Trade-in car must have been
registered in your name and
address for at least 90 days
Trade-in car must have been
owned by you for at least a year.
New one must be registered to
the same name and address
You must have owned the trade-in
car for at least six months
‘Classic cars’ will be offered to
owners’ clubs
It may be sold on, depending
on the resale value
Euro 1-3 cars will be ‘recycled in an
environmentally compatible way’
What will happen
It will be scrapped
to my old car?
secretary, announced proposals to ban
the sale of conventional petrol and diesel
cars from 2040.
Then there are those unfortunates
who bought their cars through personal
contract purchase lease deals and may
end up in negative equity if they hand
them back early. This is because of a fall
in second-hand resale prices.
In short, we owners of old diesels need
to find a way out. Ford, the UK’s bestselling marque, will accept any diesel or
petrol cars made before 2010 in exchange
for £2,000 off some of its models, such
as the Fiesta and Focus, until the end of
the year.
Vauxhall’s similar scheme, due to run
until the end of next month, allows you to
turn your clunker into a discount of up to
£2,000 on many of its cars.
The same sum is on offer from Mercedes and BMW, though in both cases it is
restricted to those trading in diesels rated
Euro 4 or lower — which essentially
means those registered before 2011.
So are motorists being tempted? When
I called him last Thursday, my local Ford
dealer in Wimbledon, southwest London, said business had been brisk in the
first two days of the scheme. Indeed, he
had sold a car to his brother-in-law,
another financially embarrassed member of the media.
I also learnt that the trade-in discount
could be added to other offers and
finance deals, in which case I might wish
to stretch my budget to a Focus Titanium
priced at £4,950 less than the list price of
about £22,000, depending on the model.
He was adamant the scrappage offer
was an extra saving, underwritten by the
manufacturer, and not just a way of relabelling a discount that a dealer might
offer to any canny negotiator.
Should I take the plunge? A government scheme, which offered drivers
£2,000 to trade in their old cars, led to
400,000 new sales in 2009-10, so the
latest offers are also likely to be popular.
As the dealer explained, scrappage is
most attractive to those whose cars are
worth the least and not so great for
I like the fact that
finding a scratch
on my Passat in
the supermarket
car park does not
ruin my day
higher-value ones; even if your car would
fetch, say, £5,000 on the open market,
Ford would still not give you more than
£2,000 to scrap it.
Vauxhall’s scheme works on the same
principle. BMW and Mercedes, by contrast, are more generous: their £2,000
discount is in addition to the value of the
vehicle traded in.
Given the paltry value of the Passat,
that’s not an issue in my case. And yet . . .
and yet. It’s not just that I hesitate to
scrap a perfectly sound car, but also that
in the long child-rearing years, I’ve got
used to treating my trusty Passat as a
utility. I like the fact that finding a scratch
on it in the supermarket car park does
not ruin my day.
I will think again before the end of the
year, but for now the verdict is on the side
of inertia. A new car won’t change my life.
So was my chat with the dealer a waste
of time? Not quite. I seized my chance to
defend the vehicle’s honour. It costs
£71.30 to fill up the tank. Tell me, I asked,
how much is the car worth with an empty
tank? “£100.” For the time being, it has
earned its reprieve. I’m thinking of finishing that drive to the moon.
@nicholashellen
When a swindler comes to call, will the bank protect elderly savers?
Nina Montagu-Smith
When Paul Lang discovered
last month that his
82-year-old parents, David
and Carole, were about to
hand £7,500 to a rogue
plumber, he was fortunately
able to intervene in time.
But Lang, 51, from north
London, was dismayed to
be told by RBS that it would
have gone ahead with
instructions to make the
payment. This came as
an unpleasant surprise
because the couple had fallen
victim to a £275,000 shares
scam a few years earlier
— a fact the bank was well
aware of.
Although his parents had
used the same branch of
RBS (then Williams & Glyn)
since 1979 — and never
made any overseas money
transfers — in 2013 the bank
approved their sudden,
out-of-character decision to
make several large transfers.
These included payments
totalling more than £160,000
to recipients in Portugal,
about £107,000 to the
Seychelles and more than
£8,000 to Cyprus.
The shares the couple
thought they were buying did
not exist and the money was
never seen again. RBS
washed its hands of any
responsibility, telling the
couple: “As you had
authorised the transactions/
payments, the bank accepts
no liability.”
Lang said: “My parents
lead a simple life and their
normal average transaction
is small. But as long as they
identified themselves, the
bank was happy to transfer
large amounts to various
overseas destinations, even
though it was way outside
their normal spending
pattern. My parents even
took out an equity release
loan on their house to finance
some of it.
“A couple of weeks ago
they almost parted with more
money when a fraudster
posing as a plumber called
at their home. He said there
was a major fault with a
neighbour that would cause
structural damage to their
home and he needed to hire a
machine to fix the problem.”
The “plumber” initially
asked for the £7,500 in cash
but when the Langs said this
was not possible, he said they
could transfer it instead.
“Thankfully my parents
called me and so nothing
further happened.
Age UK says fraudsters often callously target older people
“However, in an email
conversation with the chief
executive’s office at RBS, the
bank confirmed that had
my parents called to transfer
the money, as long as they
identified themselves the
bank would have transferred
it, even though RBS knew
what had happened
previously.”
Asked about the case by
Money, RBS said it would
have allowed the Langs to
transfer the £7,500 to the
rogue plumber if it had
been convinced this was
what they wanted to do, but
said it would “definitely have
asked additional security
questions to try and identify
if the customer was the
victim of a scam”.
RBS also defended its
handling of the 2013 fraud,
saying: “We made sure the
customer wanted to transfer
the money. We were
instructed to do so by the
customer in writing and over
the phone.”
Lang nevertheless believes
banks should have better
systems in place to spot what
is happening in such cases
and raise the alarm.
He cites research by
Dr Henrietta Bowden-Jones,
a consultant psychiatrist and
director and lead clinician
of the National Problem
Gambling Clinic in London,
who says there is a good
reason older people become
targets for fraudsters.
“Elderly people are more
vulnerable than most to
becoming victims of financial
scams as their mental ability
to assess risk may be
declining in keeping with
other age-related brain
changes,” said Bowden-Jones.
The sharp rise in the
number of bank transfers
over the past decade has
compounded this problem.
The consumer group
Which? says UK consumers
now make more than 70m
bank transfers a month,
compared with 100m in an
entire year a decade ago.
Last year Which? lodged a
complaint with the financial
regulator urging it to make
banks give customers better
protection from scammers.
“Banks place too much
responsibility on consumers,
expecting them to protect
themselves against these
increasingly sophisticated
scams,” said Gareth Shaw of
Which?. “The industry needs
to take swift action to prevent
countless more unsuspecting
consumers being tricked
into losing life-changing
amounts of money.”
The Which? advice on
scams is at which.co.uk/
consumer-rights/scams.
Age UK, the charity for
older people, is also calling
on banks to do more to
safeguard elderly people by
spotting suspicious activity
on their accounts, such as
large or unusual payments to
unfamiliar recipients.
“Fraudsters will often
callously target older people
with scams, preying on
vulnerabilities such as
loneliness, financial
pressures and bereavement,”
said Caroline Abrahams,
director of Age UK.
“Many older people feel
their bank is there first and
foremost to protect their
Their ability
to assess
risk may
decline as
they get older
hard-earned savings, and in
cases like this the banks are
failing in that duty. Once
people’s life savings are gone
they are gone for ever.”
There is no legal
requirement for banks to
compensate customers
where fraud has occurred if
the customer was responsible
for transferring funds or
giving fraudsters access to
their bank account.
However, awareness about
vulnerable customers is
growing. This year Barclays
launched a pilot scheme in
partnership with Manchester
city council that aims to train
bank staff to spot the signs of
mental illness in customers to
help protect them from fraud.
Lloyds says it has stopped
customers of Lloyds, Halifax
and Bank of Scotland losing a
total of £1.1m to fraudsters in
the nine months since an
industry-wide initiative,
known as the Banking
Protocol, was launched. It
aims to identify customers
who may be scam victims.
“Where we are suspicious,
we will contact the customer
to verify the payment before
proceeding,” said Lloyds.
Its staff receive regular
training to identify suspicious
activity on an account and
discuss it with clients.
HSBC this year launched
a guide, Managing your
Money with Dementia, to
make it easier for customers
affected by the disease to look
after their financial affairs.
Developed in conjunction
with the Alzheimer’s Society
and Alzheimer Scotland, it
includes advice on keeping
track of spending, fraud
protection and how to enable
others to support customers
with their finances.
YOUR STORY
Do you know someone who
was defrauded? Should
their bank have done more?
money@sundaytimes.co.uk
14
The Sunday Times August 27, 2017
MONEY
He said he
was from my
bank . . . and I
believed him
somebody from the Barclays fraud unit
would contact me within 48 hours.
Two days on, no contact had been
made. I attempted to call on several
occasions but kept hitting a brick wall.
I have subsequently received a stream
of emails and texts from Barclays saying
standing orders and direct debits could
not be honoured because of a lack of
funds. But a week on, I still haven’t
heard anything about the fraud itself
from Barclays.
‘Confession time — which one of you has the spending habit?’
QUESTION
ON
OF MONEY
EY
JILL INSLEY
LEY
Fighting your financial
and consumer battles
I
have been the subject of a banking
scam that could cost me nearly
£25,000. The Metropolitan police
have told me this was one of the
cleverest and most elaborate
stings they have encountered.
On Friday, July 28, at about
6.50pm, I received a phone call
on my landline from somebody
purporting to be from Sky
television. They asked me if I was
satisfied with the service and how my
Sky boxes were performing. I told them
the recent torrential rain had made the
service intermittent.
The man asked how long I had been
subscribing to Sky and how much I was
paying a month. I said I could not give
an exact figure and provided
approximations: 15-18 years on the first
and about £90 on the second. He also
asked for my date of birth.
He told me there was a better
alternative for somebody of my age with
my length of connection to Sky. He asked
for bank details but after giving my sort
code and account number, I sensed a
problem. He insisted a Sky operative
would come to my house the following
Monday to provide new viewing cards
and carry out connection tests.
I realised I had been wrong to provide
these details and decided to phone
Sky to report what had happened.
Before I could do so, the phone rang at
7.05pm with somebody purporting to
be from my bank, Barclays. He said
irregular activity had been spotted on
my Premier account and somebody
was attempting to fraudulently transfer
money to a bank account in Nigeria.
This could be prevented immediately
if I followed his instructions.
I questioned his legitimacy and he
told me to stay on my landline to him
while I used my mobile to ring a number,
0345 734 5345, which he gave me, to
check authenticity. It was a Barclays
number and although I didn’t actually
speak to a human being, I assumed this
to be proof he was genuine.
I was then guided through various
transactions to transfer the money into
a new numbered account for which he
gave me the details. I moved money
from all my accounts — Premier, a joint
account with my wife, a savings account
and two further savings accounts for my
children. I now realise after reading
Barclays’ guidelines on scams and fraud
that this was a catastrophic mistake.
BLESS ME, WHAT’S
HAPPENED TO MY
CREDIT RECORD?
I recently noticed multiple
credit searches by a
company called LexisNexis
on my Callcredit report.
There would normally be
nothing wrong with this,
except some of the searches
used my name and date of
birth alongside an address
and postcode I have no
connection with — although
it has some similarities to
my actual address.
When I looked up the
incorrect postcode on the
Post Office postcode finder,
the only address listed
was a monastery for
Carmelite nuns.
I wrote to Callcredit
asking for these searches to
be deleted but it refused,
saying only the person who
authorised the searches
can delete them.
These are “soft searches”
and do not affect my credit
rating, but I am concerned
my name has somehow
erroneously been linked by
Callcredit and LexisNexis to
this address and postcode
— and this may be used to
facilitate fraud or adversely
affect me in future.
Jill replies
You sent me your credit
record, which sure enough
indicated that you had been
living as part of a nuns’
community in Glasgow.
I could also see that the
checks were in relation to
insurance.
LexisNexis Risk Solutions
offers a credit checking
service to insurance
The entire call lasted more than two
hours and, at the end, I was told the
conversation had been logged. I would
be able to see all the details by visiting
my branch of Barclays in Northwood,
northwest London, at 9.30am on the
following Monday for an appointment
with John Waller. I was given a “Barclays
registration number” for him.
companies. You visited a
comparison website in
January to get quotes for
car insurance.
Rather than having
multiple insurers ask the
credit reference agency for
your details, LexisNexis Risk
Solutions usually sends one
request, creating a soft
footprint that has no
adverse impact on the
consumer’s credit history.
The company says that
in your case, 30 insurers
contacted by the
comparison site wanted to
carry out an identification
check on you. Just one of
the 30 presented your
address in the wrong
format. “Because of this
unusual situation, we were
unable to process it
correctly,” said LexisNexis.
This meant it sent two
requests to Callcredit,
The caller identified himself as Robert
Earl and provided his own registration
number. I was told not to use online
banking to check my accounts as they
would be deactivated all weekend
because of the changes.
Naively I assumed all was well until
I arrived in the branch for my meeting,
to be told there was no John Waller.
one using your correct
address and the other using
the monastery’s address.
Callcredit was able to
sort out the correct address
and provided the
information.
Callcredit said the
incorrect address appearing
on your credit record should
not put you at any risk of
fraud, or of having
applications rejected. Soft
searches are visible only to
the consumer and the
company that carried them
out, and are not used in any
lending decisions.
In any case, the incorrect
footprint has now been
deleted.
LexisNexis says it is not
sure which insurer was
involved, but adds that it has
changed its system to
ensure this does not happen
again.
I was then forced to stand at the
Barclays counter for 2½ hours while I
explained what had occurred. I was
afforded no privacy, being told that as
it was holiday time and the bank was
shortstaffed with only two employees,
they could not leave the counter.
After finally finishing the report, I was
given a case number and was told
Jill replies
I was worried that, having moved all
your money to the fraudster’s account
yourself, you would not qualify for a
refund from the bank. However, I
pointed out to Barclays that you felt your
plea for help, once you realised your
mistake, had been badly handled by the
branch staff and the fraud team.
Barclays investigated the case and
decided its service to you was not
up to scratch. It had taken four days for
Barclays to make contact with the bank
that received your payments after you
reported the fraud. While it was highly
unlikely that any of your money was still
in the receiving account, there was
always a chance.
“When someone reports a scam to us
we aim to secure any funds remaining by
swiftly contacting the receiving bank,”
Barclays said. “Unfortunately on this
occasion there was a slight delay and,
as a result of this, we have returned
£24,900 as a gesture of our goodwill to
our customer.”
You left for a pre-arranged family
holiday in Greece after telling me about
your situation and said the worry ruined
the first week of your trip. “Thank you
for making the second week infinitely
more enjoyable than the first,” you said.
“I am a very lucky man.”
You certainly are. The police may
have told you this scam was elaborate,
but it was really very simple. Having
made you panic about the security of
your bank account, the fraudsters did
not need your Pin, card reader or online
passwords because you did all the work
of moving your money for them.
Barclays points out no bank or the
police will ever ask anyone to move
money from their account, even if an
attempted fraud is suspected.
To find out more about the different
types of scam and how to protect
yourself, visit tinyurl.com/
barclays-secure
CAN WE HELP YOU?
Please email your questions to
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.
Postpone that retirement party —
it’ll do wonders for your pension
Many are
opting to stay
at work and it
can really pay
off, says Nina
Montagu-Smith
Are you counting down the
months to state retirement
age or, like a rising number of
working-age people, do you
expect to keep plugging away
for some time afterwards?
The good news is that
working for five more years
could boost your projected
retirement income by as
much as two-thirds.
The employment rate for
people aged 65 and over
more than doubled from
4.9% to 10.2% in the three
decades to 2015, according
to government data. As life
expectancy continues to rise,
and with more pressure on
pension savings in an age of
ultra-low interest rates and
rising inflation, that figure
looks set to keep growing.
The age at which you can
draw your state pension,
meanwhile, is rising too.
Between October 2018 and
October 2020, the pension
age for both men and women
SHOULD I DELAY MY
STATE PENSION?
Although it can pay to
defer your state pension,
holding off is not as
advantageous as it was
following changes that
came into force last year.
If you have reached state
pension age since April
2016, you will receive an
extra 1% for every nine
weeks you defer — just
under 5.8% a year. Under
the old system the figure
was 10.4% a year.
If you are receiving the
FIVE MORE YEARS AT WORK
Retiring
at 65
Pension income
Pot
£105,496
£457 a month
Retiring
at 70
Pension income
£771 a month
Pot
£151,884
Source: Aegon
Figures assume continuing pension contributions
of £355 a month until retirement, annual investment
growth 4% net of charges
will rise to 66; between 2044
and 2046, it will go up to 68.
However, figures prepared
by the insurer Aegon show
the extent to which delaying
stopping work can increase
your retirement savings.
Take a 65-year-old who has
built up a pension pot of
£105,496 — the average
among those aged 54 and
over, according to Aegon
research — after paying £355
a month into a personal
pension. If they retire and
buy an annuity, this will give
them a pension of £457 a
month. If they keep working
— and contributing — for
another three years, the pot
could grow by £25,542, giving
them an extra £164 a month
(assuming investment growth
of 4% after charges). Keep
going for five years
and the value of their fund
would reach £151,884,
boosting their pension to
£771 a month.
Those in defined-benefit or
final-salary schemes can
often choose to defer taking
their pension too.
According to the adviser
full new state pension of
£159.55, your pension is
£8,296.60 a year. Delay
taking it until the age of 66
and it will rise by £479 a year
(£9.21 a week) plus inflation,
as measured by the
consumer prices index, the
adviser LEBC calculates.
Wait until 70 and you will get
£2,701.40 a year (£51.95 a
week) extra, plus inflation.
When you are four
months from your state
pension age, you can
choose to claim it or delay.
You do not have to take any
action if you plan to defer.
But is it worth it? “The
attractiveness of deferring
the state pension is much
reduced since the changes
in 2016,” said Kay Ingram,
director of public policy at
LEBC. To make deferring
worthwhile, you need to live
for another 19 years once
you start drawing the
pension.
This element must also be
taken as income rather than
a lump sum and will rise in
line only with the consumer
prices index. Unlike the rest
of the pension, it will not
benefit from the “triple
lock”, under which
payments rise by a minimum
LEBC, most private sector
schemes will increase your
pension by 6% to 8% for each
year of deferral. At 7%, after
five years, you could receive
£1,402 a year for every £1,000
you were initially promised.
Terms differ from scheme
to scheme and you cannot
contribute more to a definedbenefit pension after you
reach scheme retirement age.
A poll by Censuswide for
Aegon found people of
working age increasingly
expect to work past the state
retirement age.
Just 12% said they would
cease work on reaching state
pension age and 9% will stop
before then. A quarter of
respondents said they
expected to continue working
full-time for as long as they
are able, and a further
quarter expect to carry on
working part-time.
Millennials have also got
the message: 31% of those
polled expect to work fulltime for as long as they can,
27% will continue part time
and just 3% expect to retire at
state pension age. “Those of
working age today are waking
up to the likelihood they’ll
not retire [as early] as their
parents, and are no longer
picturing state pension age as
the defining retirement
moment,” said Steven
Cameron at Aegon.
of either 2.5%, the rate of
inflation or average
earnings.
A better alternative would
be to start drawing your
state pension once you
reach state retirement age
and pay it into your personal
pension, particularly as you
can continue to earn tax
relief on contributions until
the age of 75.
LEBC estimates that
reinvesting the state
pension from ages 65 to 70
could produce a fund of
£41,460, including basicrate tax relief. This could pay
you an extra £2,321 a year.
15
The Sunday Times August 27, 2017
MONEY
CURRENT ACCOUNTS
Provider
Account name
Account fee
Interest rate 1
Balance
Contact
TSB
Classic Plus
None
£10 a month 2
£1-£1,500
0345 975 8758
Halifax
Reward
None
£3 a month
£1+
0345 720 3040
Nationwide
FlexDirect
None
5% 3
£1-£2,500
0800 302 010
Provider
Account name
Account fee
Interest rate 4
0% overdraft limit Contact
First Direct
1st Account
£10 a month 5
15.9%
£250
0800 242 424
M&S Bank
M&S Current Account None
15.9%
£100
0345 900 0900
14.6%
£0
0345 266 8977
None
EURO
GBP>EUR
1.08
1.29
1.23
1.62
1 Based on funding of £1,000 a month. 2 Credit interest of 3%. 3 Introductory rate for one year, then 1%. 4 Equivalent annual rate. Some accounts require minimum
funding to open or receive rates shown. 5 Fee waived if minimum funding of £1,000 is met. * Based on an overdraft of £500 for 15 days a month.
Source: Moneyfacts.co.uk
INTRODUCTORY RATES
Card type
Sainsbury’s Bank Purchase Mastercard
Introductory purchase
APR 1
Reward
Contact
0% for 32 months
18.9%
Yes
0808 540 5060
AA
Dual Mastercard
0% for 32 months
18.9%
No
0345 600 5606
Halifax
30-Month Purchase Mastercard
0% for 30 months
18.9%
No
0345 944 4555
Provider
Card type
Introductory purchase Transfer fee 2
APR 1
Contact
Barclaycard
Platinum 40-Month BT V
0% for 40 months
1.68%
18.9%
0800 731 0200
Tesco Bank
Clubcard BT Mastercard
0% for 40 months
2.69%
18.9%
0345 300 4278
MBNA
Platinum 39-Month BT V
0% for 39 months
1.48%
18.9%
0345 606 2062
Provider
Card type
APR 1
Cashback
28.2%
1%-1.25%. Intro 5% for 3 months (up to £125) 0800 917 8047
American Express Platinum Cashback Everyday 22.9%
0.5%-1%. Intro 5% for 3 months (up to £100) 0800 917 8047
American Express Platinum Cashback
Select Visa
Nationwide
15.9%
Contact
0.5%
0800 055 6611
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
Scheme
Deposit
Fee
Notes
Contact
1.09%
Fixed to 31.10.19
40%
£995
LV
0345 111 8010
HSBC
1.19%
Fixed to 31.12.19
25%
£999
L
Chelsea
1.83%
Fixed to 30.11.19
10%
£1,695
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
HSBC
1.39%
Fixed to 31.12.20
40%
£999
L
0800 494 999
Yorkshire BS
1.46%
Fixed to 30.11.20
25%
£995
B
0345 166 9510
Hinckley & Rugby
2.19%
Fixed for 3 years
10%
£999
L
0800 774 499
0800 494 999
0345 120 0842
3-YEAR FIXED RATES
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
HSBC
1.59%
Fixed to 31.12.22
40%
£999
L
0800 494 999
HSBC
1.74%
Fixed to 31.12.22
25%
£999
L
0800 494 999
Hinckley & Rugby
2.59%
Fixed for 5 years
10%
£999
LV
0800 774 499
First Direct
2.49%
Fixed for 10 years
40%
£0
R
0800 482 448
Deposit
Lender
Rate
Scheme
Fee
Notes
Contact
Barclays
1.04%
Tracker +0.79% for 2 years 40%
£999
LV
0333 202 7580
Yorkshire BS
1.5%
SVR -3.24% to 30.11.19
10%
£1,495
Virgin Money
1.65%
Tracker +1.4% to 1.11.20
30%
£995
R
0345 605 0500
Coventry
1.55%
Variable for term
25%
£999
ELV
0800 121 8899
0345 166 9510
FIRST-TIME BUYER / LOW DEPOSIT
AUSTRALIA
GBP>AUD
CASHBACK CARDS
Rate
Sainsbury’s
TRACKERS */ DISCOUNTS
SWITZERLAND
GBP>CHF
BALANCE TRANSFERS
Lender
LONG-TERM FIXED RATES
AMERICA
GBP>USD
CREDIT CARDS
Provider
2-YEAR FIXED RATES
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 *
Post Office Money Standard Account
MORTGAGES
FOREIGN
CURRENCY
CREDIT INTEREST
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
Yorkshire BS
3.15%
Fixed to 30.11.19
5%
£995
BP
0345 166 9510
Hanley Economic
2.85%
SVR -2.09% for 2 years
5%
£250
PV
01782 255 000
Barclays
1.39%
Fixed to 31.10.19
5%
£999
HPV
0333 202 7580
Lender
Rate
Scheme
Deposit
Fee
Notes
Contact
Barclays
1.6%
Tracker 1.35% for 2 years
40%
£1,950
LV
0333 202 7580
Post Office
1.83%
Fixed to 31.10.19
25%
£995
V
0800 077 8033
Virgin Money
2.24%
Fixed to 1.11.22
40%
£1,995
D
0345 605 0500
BUY TO LET
Source: timescurrencyservices.co.uk
020 7294 7970
Early repayment charge applies unless otherwise stated. * Most deals track Bank of England base rate. Notes: SVR = Standard variable rate;
B = £250 cashback; D = £500 cashback; E = No early repayment charge; H = Help to Buy 20% equity loan; L = Free legal work for remortgages;
P = Purchases only; R = Free valuation and legal work for remortgages; V = Free valuation
Source: landc.co.uk — 0800 373 300
SAVINGS ACCOUNTS
INSTANT ACCESS
CASH ISAS
Provider
Account name
Min deposit
Interest rate
Contact
Ulster Bank 1
eSavings
£1
1.25%
ulsterbank.co.uk
Double Take E-Saver Issue 1
£1
1.21%
virginmoney.com
Online Easy Access
£1
1.2%
bankofcyprus.co.uk
Virgin Money
2
Bank of Cyprus UK
3
1 If ID is required this will need to be taken to an Ulster Bank, RBS or NatWest branch. 2 Maximum of two withdrawals per calendar year. 3 Rate includes 0.6% bonus for first 12 months.
NOTICE ACCOUNTS
INSTANT ACCESS
Provider
Account name
Min deposit Interest Transfers in Contact
Virgin Money 1
Defined Access E-Isa Issue 15
£1
1.06%
Yes
virginmoney.com
Paragon Bank
Limited Edition Easy Access (Issue 2) £1
1.05%
Yes
paragonbank.co.uk
1 Maximum of three withdrawals a year. Additional withdrawals are allowed, subject to the rate reducing to 0.25%.
Provider
Account name
Notice period
Min deposit
Interest rate
Contact
FIXED RATE
Secure Trust Bank 1
180-day Notice (Issue 2)
180 days
£1,000
1.64%
securetrustbank.com
Provider
Account name
Secure Trust Bank 1
120-day Notice (Issue 24)
120 days
£1,000
1.54%
securetrustbank.com
Virgin Money
Fixed Rate Cash E-Isa Issue 265 1 year
PCF Bank
100-day Notice Issue 4
100 days
£1,000
1.45%
pcf.bank
Virgin Money
Fixed Rate Cash E-Isa Issue 266 2 years £1
1 Maximum of four interest withdrawals and three capital withdrawals per calendar year.
Term
Min deposit Rate
Transfers in Contact
£1
1.3%
Yes
virginmoney.com
1.51%
Yes
virginmoney.com
Source: Savingschampion.co.uk — 0808 178 5354
FIXED-RATE BONDS
Provider
Account name
Term
Min deposit
Interest rate
Contact
OakNorth Bank
Fixed Term Deposit Account
1 year
£1,000
1.76%
oaknorth.com
Paragon Bank
Fixed Rate Savings Account
2 years
£1,000
2.05%
paragonbank.co.uk
Vanquis Bank
Fixed Rate Bond
3 years
£1,000
2.2%
vanquissavings.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
£10-£100
4%
halifax.co.uk
NS&I
Children’s Bond Issue 36
Fixed Rate Bond
£25
2%
nsandi.com
Santander 1
123 Mini Current Account Current Account
£100-£300
1%-2.96%
santander.co.uk
1 Interest rates are tiered: 1% on balances of £100-£199; 1.98% on £200-£299; 2.96% on £300-£2,000.
ENERGY DEALS
JUNIOR ISAS
Table shows the cheapest tariff from the 3 cheapest
suppliers.Excludes fixed tariffs of less than 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
HAVE
YOUR SAY
EDITED BY
NINA
MONTAGU-SMITH
Oh, do put a
sock in it, Hunter
Last week in his article
“This retirement lark gets
better with age”, Hunter
Davies listed the many
financial perks he enjoys as
a pensioner. His joy at his
good fortune was not shared
by all our readers . . .
I really enjoy Hunter Davies’s
monthly column, but could
you ask him to stop boasting
about his old-age benefits? It
helps fuel the resentment of
the younger generation, who
have no chance of buying a
house or building a decent
private pension.
It particularly annoys me
when he goes on about
having a free bus pass. Where
I live, in northern England,
you have to apply for this — it
is not given to all and sundry
when you are 65, unlike
other benefits such as the
winter fuel allowance.
For those of us who are
not as financially secure, the
bus pass is a wonderful way
of getting out and about
rather than sitting at home
all alone.
IH, Sheffield
Gloating is never attractive
and I am afraid this seems to
be the essence of Davies’s
Supplier
Average annual bill
Rate
Contact
Provider
Account name
Min deposit
Interest rate
Rate
Contact
Green Network Energy
£831
F
0800 520 0202
Coventry
Junior Cash Isa
£1
3.25%
V
coventrybuildingsociety.co.uk
Tonik
£854
F
0333 344 2686
Nationwide
Smart Junior Isa
£1
3%
V
nationwide.co.uk
Together Energy
£860
F
0333 150 1699
Halifax
Junior Cash Isa
£1
3%
V
halifax.co.uk
Source: TheEnergyShop.com
latest column. Given that he is
so well off, perhaps he should
retire and leave some space
for those younger journalists
who may need to buy a home,
or pay the TV licence fee or
cough up for a yearly rail
ticket in order to travel to
work. He is doing nothing for
intergenerational relations.
I know many of the
“snowflake” generation and
I believe they would read his
column with empathy —
they’re a kind and
conciliatory lot.
CA (Generation X), by email
Like Davies, I can afford life’s
luxuries — such as a cupboard
full of my favourite biscuits,
the odd cream bun, a decent
burgundy, days out, actually
finishing The Sunday Times
before Wednesday and so on.
MONEY
MADE EASY
TESCO SHARE
SCANDAL
If you are one of 10,000
people who bought or
sold shares in Tesco in
summer 2014, you could
be due a slice of an £85m
compensation package
launched after the
company was found by
the regulator to have
given a “false and
misleading impression”
to its shareholders.
What happened?
In August 2014, a Tesco
statement claimed profits
for the six months to
August 23 would be
£1.1bn. This forecast,
though, was based on
false figures from its
subsidiary, Tesco Stores.
A month later Tesco
said it had overstated
expectations, causing the
shares to fall from 230p
to 203p on September 22.
Who is getting
compensation?
If you actively bought or
sold shares or bonds in
Tesco between August 29
and September 22, 2014,
you can claim. If you
merely held shares during
that period, you can’t.
Tesco says there are about
10,000 “net” shareholders
who qualify — those who
bought more Tesco
ordinary shares than
they sold. They will be
compensated only for the
net shares, the difference
between the number
bought and number sold.
How much will
investors receive?
Individual shareholders
will receive 24.5p per net
share they held during the
period, plus 4% interest. It
may take a month for the
compensation to be paid.
How do I apply?
Get in touch with KPMG
by February 28. If your
shares are held in an Isa,
the compensation will be
paid direct to you, not into
your Isa. If you hold them
in a self-invested personal
pension, your Sipp
provider must claim.
Submit your claim
at kpmg.co.uk/tescoscheme. Alternatively,
call the KPMG helpline on
0808 164 6031 or write to
KPMG, PO Box 74451,
London E1W 9PB.
V = variable rate. Source: Savingschampion.co.uk — 0808 178 5354
I can indulge my collecting
bugs of rare pottery and good
watches. What luxury
indeed.
I am determined to live
long enough to use up all my
annuities, visit a few good
restaurants, enjoy a few
other good wines and read
The Sunday Times for years
to come.
Forget the digital age, I
can’t be bothered with Face
been repaid, then took a
long time to refund the
money, there would quite
rightly be an uproar and an
inquiry. If the bank continued
to do so, it would have its
consumer credit licence
revoked and be put out of
business.
My son experienced this.
While he eventually received
a refund, he had to jump
through a lot of hoops to do
VICKI COUCHMAN
Davies’s article does a great
injustice to those pensioners
who do not enjoy the same
health and wealth as he does.
Nor does it do much to
placate the younger
generation, who only dream
of owning their own homes.
Davies ought to count his
blessings that he has been
extremely lucky to have lived
through an unprecedented
golden age in the UK and not
rub salt in the wounds of
those less fortunate.
BL (aged 74), Dorking, Surrey
I enjoyed the stress of work,
drank sensibly, went to bed
late and saw too little of my
children. Now I enjoy five
days of golf a week, drink
with more abandon, go to
bed when I like, and through
technology now see much
more of my kids and
grandchildren than when I
lived with them. As Davies
says: “We have put in the
years.” And many more
to come!
RH, Hatfield,
Hertfordshire
ICONS BY JAMIE JONES
Best Buys
ability to administer the
scheme correctly and fairly.
It’s another PPI-type scandal
in the offing. The solicitors
will be jumping for joy.
“Hello, this is Grabbit &
Runne . . . We understand
you had a student loan
recently . . .”
“Jim Hacker”, via
sundaytimes.co.uk
Student loans are indeed
barbaric. When the UK
government can access
30-year debt paying less
than 2% fixed-rate interest,
why isn’t this being passed
straight on to students? After
all, education is of benefit to
us all. The debt on student
loans should be referenced
this way and with no
compounding of interest.
“Walk the line”, via
sundaytimes.co.uk
Keep attorney
in the family
Your very good wealth: Hunter with his favourite tipple
or Twit or anything like that —
there’s too much to do!
BC, Birmingham
Student loans fail
the fairness test
Other lenders have a legal
obligation to “treat customers
fairly” (“Help, I’ve overpaid
my student loan”, last week).
Why does this not apply to
the Student Loans Company?
If a bank tried to collect
payments after a loan had
so, providing payslips and so
on to prove he had made the
excess repayments. In effect,
the Student Loans Company
had no record of repayments
since the previous April;
apparently, HM Revenue
& Customs only updates it
once a year.
Completely unacceptable.
“Geoff”, via sundaytimes.co.uk
Unbelievable! Not only do
we impose a rotten, unfair
charge on our young people,
but we do not even have the
How sad that the retired
judge Denzil Lush has no
family member he can trust
to be his attorney (“Power
of attorney isn’t perfect, just
the best option”, last week).
What is sadder is that he may
have put off some people
from taking a perfectly logical
and prudent step.
My sister and I were
attorneys for our late
mother. We were the sole
beneficiaries of her will.
In essence, we spent our
inheritance to ensure her
well-being and comfort.
There was never any question
that we would have done
otherwise.
Only last week, my wife
and I appointed our son as
our attorney. We know that
he would never rip off his
parents or his siblings,
who are co-beneficiaries of
our wills.
In the recent discussions,
it was suggested that care
home providers were a good
guardian of elderly people’s
affairs. I would beg to differ.
I once came across a
care home manager who
persuaded one of his charges
to appoint a new bank.
Subsequently, a bank
employee and the manager
plundered the charge’s
bank account.
DS, Alton, Hampshire
There are two points to make
regarding the benefits of
lasting power of attorney.
First, any downside risks
involved in appointing
attorneys can be minimised
by thoughtful discussion
with sensible (and maybe
impartial) family members
and advisers as to who those
attorneys should be.
The second point relates
to the solicitors’ fees
supposedly involved; these
are completely unnecessary,
since the forms themselves
are clearly explained by
the Office of the Public
Guardian. There is no need
to appoint a solicitor for help
with them.
MS, Kingston, Surrey
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
EMAIL
money@sundaytimes.co.uk
TWITTER
@ST_Money
MONEY’S
GOLD
MEDALLISTT
This week the
honours go to the
electronics company Bose,
which has been nominated
by Chris Godden-Miller, 65.
“I would like to let you
know how superbly Bose
treated me when I had a
problem with a set of their
headphones recently,” said
Godden-Miller, a building
surveyor. He and his wife
Jayne, a local government
executive, live in Oxted,
Surrey.
“I have only about 25%
hearing and suffer from
tinnitus so hearing films or
music on flights is next to
impossible, which makes
for some very boring
journeys,” he said.
“For Christmas 2014,
my wife bought me some
noise-cancelling Bose
headphones, which were
brilliant. I only ever used
them on plane journeys
and they made all the
difference in the world.
“However, in May this
year I thought the left-hand
headphone wasn’t working,
although I wasn’t sure if
this was the case or
whether the problem was
my hearing.
“Back home, I got my
wife to try them and my
suspicions were confirmed.
As we were six months
beyond the two-year
Money’s Gold
Medallist is your
chance to tell
us about the
businesses that
have treated
you brilliantly.
If you have a
story, email
money@sunday
times.co.uk
guarantee, we were
somewhat downcast as we
realised they would be
expensive to replace.
“I decided to contact
Bose’s customer services
department, via email, to
see if it might be worth
repairing the headphones,
especially since I had not
used them much.
“I received a phone call
within a couple of days
from customer services.
When I explained what
had happened, they
decided to treat the
headphones as if they were
still under guarantee and
replace them — complete
with a new two-year
guarantee.
“They said they would
send me an email with all
the details and a label
for free drop-off at a
collection point.
“Within 10 minutes of the
end of the phone call, the
email arrived and it was as
easy as the adviser had
described. I used the label
they sent to drop off the
faulty headphones at a UPS
parcel service just one mile
from my home.
“Last week, less than
seven days later, I received
my replacement
headphones. I am
delighted that I will be able
to hear on planes again.”
16
The Sunday Times August 27, 2017
MONEY
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 72
1
2
3
4
13
5
6
7
Across
8
14
9
10
11
12
15
16
17
18
19
20
21
22
23
25
26
30
24
27
28
31
32
29
33
34
35
36
37
38
39
43
40
44
41
45
42
46
48
47
49
50
51
52
54
53
55
56
57
Solution to 71
Across: 1 Faster, higher, stronger, 14 Brioche, 15 Offal, 16 Mandibles, 17 Luger, 18 The Associate, 20 Zeus, 22 Sonja Henie, 23 Pep Guardiola, 25 Hiawatha, 26 Sean Lock,
27 Optic, 29 Ska, 30 Brentford, 32 Jeopardy, 35 Neurotic, 36 Réchauffé, 37 NME, 39 Emmet, 41 Richards, 43 Trolleys, 46 Luminiferous, 47 Kathy Beale, 49 Fief,
50 Expansionism, 51 Crank, 54 Rastafari, 56 Rebec, 57 Squires, 58 On the Origin of Species
Down: 2 Alcarraza, 3 Twentieth Century Fox, 4 Rhodesia, 5 Infuse, 6 Halloween, 7 Romain Grosjean, 8 Tin, 9 Ovid, 10 Galle Fort, 11 Resistance, 12 Abel, 13 Virginia Wade,
19 Thank You for the Music, 21 Advocate, 22 Schuss, 24 Renoir, 28 Stock-car racing, 30 Baritone, 31 Decade, 33 Danse Macabre, 34 Jessie, 38 Wells Fargo, 40 Mummerset,
42 Arun Sarin, 44 Lobscouse, 45 Davis Cup, 48 Rosbif, 52 Kiss, 53 Vale, 55 Ayr
1
2
3
6
7
Across
4
6
8
9
10
11
12
14
18
19
21
22
23
5
8
9
10
12
11
13
14
15
16
18
10
13
15
16
17
20
Skating jump (4)
Scandalmonger (6)
Recalcitrant (12)
Intense (6)
Dramatic outline (8)
Disadvantaged Americans
(colloquial) (7,5)
Marine school (3)
Member of small ruling
group (8)
Boa relative (6)
Cells sharing a function (6)
Bolt’s partner (3)
Metropolis (4)
Solution to 1535
Across: 1 Ship, 4 Buttress, 8 Writhe, 9 Bigamy, 10 Velociraptor, 12 Squash,
14 Credit, 15 Inexperience, 18 Abacus, 20 Frolic, 21 Very well, 22 Edgy
Down: 2 Horde, 3 Patronage, 4 Blemish, 5 Tibia, 6 Rug, 7 Samurai, 11 Therefore,
13 Quibble, 14 Careful, 16 Posse, 17 Cling, 19 Coy
23
CELL BLOCKS
EASY
41
+8
÷7
x3
–8
DOUBLE
IT
+ 4 – 12
MEDIUM
84
1/3
+ 19
DOUBLE
IT
– 58
TREBLE
IT
÷4
HARDER
+ 586
– 129 DOUBLE
82 TREBLE
IT
IT
OF IT
2/3
OF IT
1/3
+ 15
+7
÷5
OF IT
HALVE TREBLE
IT
IT
– 318
ANSWER ANSWER ANSWER
BRAIN TRAINER
÷ 4 + 3/5
advising the use of safety
goggles when doing what?
1
What disappeared for two
minutes and 40 seconds?
5
What links Sunset Park in
Brooklyn and Tooting?
2
What final moment was
“melancholy in E”?
6
At what age do we start
hating our jobs?
3
What is unusual about the
pianist Teo Tronico?
7
4
Aldi was criticised for
Who is still banned from
playing at Chesterfield
bowling club?
8
How much did actor Mark
Wahlberg, pictured, earn
in the year to June?
9
Which hit TV show is the
subject of an academic
conference at
Hertfordshire University
next month?
10 Where did Iris Wronka
make her TV debut?
MARK MY
WORDS 70
Readers are invited to
guess what was said when
the German chancellor
Angela Merkel opened a
computer games fair in
Cologne.
See below for how
to enter.
Send your entries to: puzzle.entries@
sunday-times.co.uk by no later than
Tuesday. Entries should include your postal
address and the email subject line should
be ‘Mark My Words 70’. The best entry as
judged by The Sunday Times will win The
Chambers Dictionary of Great Quotations.
Last week’s winning entry, for
this photo of men dressed as
gladiators posing for a selfie,
was: “I am Sparkledust!”
It came from John Hughes
of Alford, Lincolnshire.
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
OF IT
1
2
3
4
5
7
17
19
22
Down
Sell abroad (6)
Spot (6)
Edge (3)
TV screen type (6)
Quantity (6)
Spitting image (12)
Flaw (12)
Of 15, 3 or 5 (6)
Halve (6)
Trouble (3)
Transversely (6)
Match (6)
1 Breath, as a life force in yoga (5)
2 Former tennis player and current coach of Andy Murray (4,5)
3 “All newspaper and journalistic activity is an intellectual
brothel from which there is no retreat” (Leo ____) (7)
5 French term for those of high social status (5,5)
6 A Ugandan distilled drink, sometimes made with bananas (6)
7 The head of a German university (6,10)
8 To find and remove computer software errors (5)
9 Title once held by Jack Straw, currently by Richard
Burgon (6,4,10)
10 Sporting event whose winners receive the Vince Lombardi
Trophy (5,4)
11 A green variety of beryl (7)
12 Pertaining to a gland at the base of the neck (6)
16 Annual work by Benjamin Franklin, using the surname
Saunders (4,8,8)
19 Saracens lock who has made three appearances for Wales (7,3)
21 The only Fleetwood Mac single to reach number 1 on the US
Billboard chart (6)
23 Emmanuel Macron’s predecessor (8,8)
24 The second female athlete to successfully defend a 100m
Olympic title (4,6)
26 Musical written by Tim Rice and two members of ABBA (5)
29 Island whose capital is Heraklion (5)
31 The ____, another name for the constellation Cetus (5)
33 Window sometimes supported by corbels (5) (pictured)
34 Small piece of software which often operates as a plug-in (6)
37 2003 single by Evanescence, from their debut album
Fallen (2,8)
39 ____ Simon wrote the Horrid Henry series of books for
children (9)
42 American equivalent of “become accustomed” (9)
44 Sells off, for example, a subsidiary company (7)
47 Where a snowbird may go in
the winter (7)
48 Lawyer who had three
terms as mayor of New York
City (2,4)
49 In Greek myth, the
sanctuary of Pythia (6)
51 ____ Passes is a verse drama
by Robert Browning (5)
53 British newspaper which
ceased publication in
1995 (5)
NEWS QUIZ
58
CONCISE CROSSWORD 1536
Down
1 Ballet dancing performed on tiptoe (6)
4 Collection of articles by Einstein, published in book form in
1949 (3,5,2,1,3,2)
13 Land which is fit for farming (6)
14 Piece of introductory text traditionally printed in red (6)
15 Sin of which Jesus is accused in Matthew chapter 9 (9)
17 One of multiple forms in which an element may exist (9)
18 Italian fashion designer who initially specialised in
menswear (7,6)
19 A rowdy assembly, named after a fair in Dublin (10)
20 Chloride salt used as a photographic developer (6)
22 Ransom ____ was a pioneer of the US car industry (4)
25 Last of the twelve minor prophets in the Old Testament (7)
27 Required by etiquette or fashion (2,7)
28 British version of what Americans call Spandex (5)
30 City designed by Edwin Lutyens and Herbert Baker (3,5)
32 Actress who played Rita Hanson in Groundhog Day (5,9)
35 Irrational fear of confined spaces (14)
36 1990s series of autostereogram books (5,3)
38 Title of the theme music for Beverly Hills Cop, covered by
Crazy Frog (4,1)
40 ____ Cathedral has the tallest church spire in the UK (9)
41 Type of art, its name from the French word for glueing (7)
43 Icelandic anthology (4)
45 ____ Strachey was a founder of the Bloomsbury Group (6)
46 Itchycoo Park and Lazy Sunday were hits for this 1960s
band (5,5)
50 Comedian who played obnoxious stand-up Reggie
Warrington in The Nutty Professor (4,9) (pictured)
52 Physician specialising in ear anatomy and diseases (9)
54 Winner of the fillies triple crown in 1985 (2,2,5)
55 Genus of, and alternative name for, catmint (6)
56 Surname of the Star Trek captain portrayed by Patrick
Stewart (6)
57 Fantasy trilogy written by
Philip Pullman (3,4,9)
58 The Battle of ____ was decisive
in the English Civil War (6)
Just follow the instructions from left to right, starting with the
number given to reach an answer at the end
2 4
4
4
2
3 2
3
2
6 4 7
3
3
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.
TETONOR
EASY
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.
26
200
96
30
66
28
105
25
162 126
27
22
17
144
52
3 4 4 6 6
33
8 10 13
21 22
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; 29, good;
37, very good; 46, excellent.
17
The Sunday Times August 27, 2017
MONEY
MEPHISTO 2974
4
9
5
10
12
6
7
8
11
13
14
15
16
17
19
18
20
21
22
23
27
24
25
26
28
29
30
31
32
33
34
35
NAME
...................................................................................
ADDRESS ...................................................................................
...................................................................................
Post your solution to The Sunday Times Mephisto 2974,
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 £45. Four
runners-up will each receive £20.
The Chambers Dictionary 13th edition is the primary
reference. Readers may email comments or queries to
puzzle.feedback@sunday-times.co.uk
Solution to 2973
Across: 1 Cored, 5 Marshal, 11 Adolescent, 13 Strides, 14 Leagued, 15 E-cigs,
16 Oaters, 17 Akita, 18 Fretted, 24 Soft roe, 25 Chats, 26 Oscula, 29 Rakes,
30 Apehood, 31 Unclipt, 32 Wage freeze, 33 Learned, 34 Arson
Down: 1 Call off, 2 Rotated, 3 Éloge, 4 Demur, 6 Act dido, 7 Reread, 8 Snicket,
9 A peg too low, 10 Lyssa, 12 Gear-change, 19 Tutelar, 20 Escapee, 21 Cruores,
22 Dead men, 23 Assign, 25 Cruel, 27 Serra, 28 Cheer
SUDOKU
Nick MacKinnon
On the rack
I have wine in a rectangular
rack consisting of five rows
and eight columns. The
bottles are made up of five
different vintages with each
CODEWORD
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 88010 (UK
only). Calls cost 75p (ROI 75c)
plus your telephone
company’s network access
charge. Texts cost £1 plus
your standard network
charge. SP: Spoke, 0333 202
3390 (Mon-Fri 9am-5.30pm).
White: Leinier Dominguez
Black: Garry Kasparov
Sicilian Najdorf
1 e4 c5 2 Nf3 d6 3 d4 cxd4 4
Nxd4 Nf6 5 Nc3 a6 An
opening made popular by
two great World Champions:
Fischer and Kasparov 6 h3 e6
7 g4 h6 8 Bg2 g5! Black
indirectly takes control of the
important e5-square 9 Be3
Nbd7 10 Qe2 Ne5 11 0-0-0
Nfd7 12 h4 Rg8 13 hxg5
hxg5 14 Kb1 b5 15 a3 Bb7 16
Bc1 Rc8 17 Rh3 Ng6!
HARD — PRIZE 1160
Asserting further dominance
over the dark-squares 18 Bh1?
It becomes clear that White
lacks a constructive plan.
Meanwhile Black slowly
improves his pieces 18…
Nde5 19 Rg3 Be7 20 Na2
Rh8 21 Rc3 Rxc3 22 Nxc3
Qc7 23 Bg2 Qc4 24 Qxc4
bxc4 Exchanging pieces will
not save White; he has too
many weaknesses. Kasparov
now smoothly converts the
advantage 25 f3 Rh2 26 Bf1
Nf4 27 Be3 Bd8 28 Rd2
Rxd2 29 Bxd2 Bb6 30 Bxf4
gxf4 31 Nce2 d5 32 exd5
Bxd5 33 Bg2 Nxg4 34 Nxf4
Ne3 35 Nde2 Nxg2 36 Nxg2
Bxf3 37 Nef4 Ke7 38 Kc1 e5
39 Nh4 Be3+ 40 Kb1 Bxf4 41
Nxf3 Ke6 42 b3 e4 43 Nd4+
Kd5 44 c3 Be5 45 bxc4+
Kxc4 46 Nf5 Kxc3 47 Kc1
Kd3 48 Kd1 e3 White resigns.
1
11
17
9
14
14
14
3
21
19
21
11
13
21
26
23
22
4
9
5
4
20
5
26
9
16
7
22
5
18
13
19
22
14
16
9
16
1
15
22
5
21
22
16
R
26
19
22
14
15
5
4
22
C
25
14
15
26
22
24
5
19
19
10
20
11
4
22
21
9
22
Send your solution to: The Sunday
Times Teaser 2866, 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 £20.
9
7
/
.
v
,
14
2
15
3
16
4
17
5
18
6
7
19
R
KENKEN
20
8
21
9
22
10
23
11
C
24
12
25
/
.
v
,
13
26
74
62
7654
A7653
Q53
A8
10 9 8 2
J 10 8 4
N
W
E
S
/
.
v
,
/
.
v
,
K J 10 8 2
54
AKQ3
92
A96
K Q J 10 9 7 3
J
KQ
KILLER SUDOKU HARD
16
9
29
23
18
7
21
16
8
22
11
20
11
11
31
North
Pass
East
South
1/
4.
West led a spade to the ten
which I ducked. She then
switched to a trump, won in
dummy with the eight. I now
played a club to the king and
ace and West continued with
another trump. (If she had
played a second spade I
would have won in hand,
unblocked the queen of
clubs and crossed to
dummy with a trump to
cash my club winners.)
However, on the actual
defence I just played off all
my trumps, squeezing East.
When I had finished I
exited with a diamond and
East had to win and play a
second spade.
In order to beat the game,
East had to cash just one top
diamond before switching to a
trump. That would have
deprived me of my exit card.
I was feeling pretty pleased
with myself, but North/South
did better in the other room.
South chose to double one
spade rather than overcall
12
26
10
North
1NT
28
...................................................................................
...................................................................................
Across
Down
1 Fight French arbitrators (6)
5 Easy goal to catch stray
reptile (8)
9 Run, with another old
chap, into jail (2-6)
10 Spade placed on right of
black debris on beach (6)
11 Keep one of these and give
nothing away (8,4)
14 Pop over low part of wall (4)
15 Trying to sit in them might
seem odd (4,6)
17 Met worker, Scots kid,
outside The Academy (10)
19 Fancy being given most of
the story (4)
20 The catching of
butterflies (12)
23 Artist fights depression —
doesn’t quite make it (6)
25 Goes ahead and does what
killer does (8)
26 Spot almost perfect escape
route from tunnel (8)
27 A sport, one that initially
backed car maker (6)
2 Space dock found in
ascent (4)
3 Corrupt corporate circles
silence gambler (11)
4 A deep breath (3,6)
5 Tango’s fashionable, and
it’s awful (3,4)
6 Hotel not to put up prince
or king (5)
7 One extremely fat
behind (3)
8 Might I turn minister
out? (10)
12 Scrappy fight involving
FBI agents and sailor (11)
13 Notice coat near ceiling, as
Spooner might say (4-2,4)
16 Landmass which is dry? (9)
18 Laddish guards shot some
soldiers once (7)
21 How do royals dominate
its pages? (5)
22 Screen around November
26? (4)
24 Fell into the well (3)
Solution to 4760
The first correct solution opened after
next Saturday wins a 10-carat rolled
gold Cross Century II fountain pen worth
£210. The next three win £120 10-carat
rolled gold Cross Century Classic ball
pens. All have lifetime guarantees. Post
solutions to The Sunday Times
Crossword 4761, PO Box 29, Colchester,
Essex CO2 8GZ, or email
puzzle.entries@sunday-times.co.uk
PROGNOS T I
E E E V R
SUPERHERO
T A M R L
AM I SS CE L E
B R
O S
L AMBCHOP G
I
A A K F
SENTRY SOA
H
P F
I
MARSE I L L E
E
I
D A G
N AOM I
MARK
T
J
E E A
CA YMAN I S L
C
H
I
L
B
L
A
I
N
A T E
A V
AMB I
P C
RA T E
P
NDER
I
E
DSOS
R
I
P L EAD
I
G E
TWA I N
T R T
ANDS
CLUE WRITING CONTEST 1671: AQUAROBIC
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 £20.
Winners Crossword 4758 K Campbell, Bradford-on-the-Green,
Northamptonshire, N Jones, Bath, Somerset, D Moody, Rowland’s Castle,
Hampshire, M Murray, Luton, Bedfordshire Mephisto 2971 T Richards, Wolf’s
Castle, Pembrokeshire, T Ashby, Hayes, Greater London, M Crapper, Whitchurch,
Hampshire, M Dickson, Matlock, Derbyshire, D Forster, Knowle, West Midlands
Teaser 2863 J Thatcher, Burnham-on-Sea, Somerset, S Wood, Wolverhampton
Chess 1074 O Isaac, Lincoln Sudoku August 6 J Scotcher, Betchworth, Surrey
43
J52
K72
AQJ52
TODAY’S SOLUTIONS
East
Pass
27
ADDRESS ...................................................................................
987
K Q 10 7
Q 10
K 10 7 4
NEWS QUIZ
South
3NT
All Pass
Plan the play after North
leads a spade which runs
round to your jack.
You only need three club
tricks for your contract. In
order to preserve your
communications you
should duck a club entirely
at trick two.
BRAIN TRAINER
POLYGON
TETONOR
CODEWORD
L ANDMA S
E
O
A
T
ANNU L
R
F
P
L
I
YO L K
S K
U
R
E
O Y S T E R
B
L
C
TW I L I GH
R
N
E
I
UNC I V I L
D
U
E
L
E ARN W I
S
S
OO
U
E L
F
P U
L
T
S
A
G
Z A
J OK E
C
X
F T O P
E
A
E T ON
S
R S U E
Q
QU I P
A
U
L L O T
I
T
RDR Y
42
KENKEN
28
264
SPOT THE MOVE 1076
1…Qe1+! Checkmate is inevitable
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.
TEASER 2865
172cm²
50
180
49
294
41
7
10 x 18 7 42 7 x 42 8 33
20
306
43
6
3
4
40
5 15 17 x 18 1 42 5 x 8
35
75
13
96
3
17 18 5 x 15 5 8 2 x 48
1 2 5 5 7 8 8 10 15 17 18 18 33 42 42 48
SUDOKU
WARM-UP
9
22
CELL BLOCKS
1 x 42 10 18 8 x 33 2 48
GC Z D T P A X H S R J O
K EWL V YM I BQNU F
16
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.
West
25
Winner 1668: RC Teuton, Frampton Cotterell, South Gloucestershire
Vociferate: After cove I drifted to bay
For a full report, visit thesundaytimes.co.uk/cluewriting
/
.
v
,
S
/
.
v
,
24
NAME
Q 10 6 5 2
84
J983
86
E
21
26
Last week’s problem
N
19
22
four hearts. North responded
one no-trump to the double.
East rebid two diamonds and
South jumped to three hearts.
North’s three no-trump rebid
ended the auction and that
contract was laydown.
W
8
16
18
23
Kasparov-Navara, St Louis
Rapid 2017. White has just
played Nc6+. What had he
overlooked?
AKJ
A963
A654
93
15
20
áWDQDWDWD]
àDWDWip0W]
ßWINDPDWD]
ÞDWDWDW)W]
ÝWDWDW0WD]
ÜDWDWDWDW]
ÛPDW4WDWD]
ÚDWDWDWDq]
ÁÂÃÄÅÆÇÈ
/
.
v
,
7
12
17
Spot the Move 1077:
Black to move
W________W
/
.
v
,
6
LAST WEEK’S SOLUTIONS
7
22
West
5
10
14
To enter, complete the Hard or Very Hard puzzle and call 0901 292 5275 (ROI 1516
500 513), 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 — to 88010 (UK only). Calls cost £1.00 (ROI €1.50) plus your telephone
company’s network access charge. Texts cost £1 plus your standard network charge.
Winners will be picked at random from all correct answers received. Lines close at
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.
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SP: Spoke, 0333 202 3390 (Mon-Fri 9am-5.30pm)
All Pass
NS vulnerable, Dealer North
7
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
Sally Brock
One of the attractions of the
game we all love is that you
often find you have done well
when you weren’t expecting
it. The other side of the coin is
that sometimes when you
think you did well, it turns out
that you didn’t.
We lost to the Chinese in
the quarter-final of the last
world championship. After a
good start, we had a poor
second set, and going into the
last set we were a dozen or so
down — far from a disaster —
but in the final set the Chinese
played superbly. This was the
last board:
9
18
18
What (in order) are the
colours of the wines in the
second row?
4
11
VERY HARD — PRIZE 1161
BRIDGE
11
21
22
14
4
7
15
25
1
19
21
14
24
12
22
5
21
22
4
4
22
15
22
11
9
2
20
22
20
7
26
12
8
6
16
4
22
19
15
22
15
16
22
11
14
11
matter what angle they are
viewed at from the front.
In the rack the first row is a
mixture of reds and whites,
with a red on the extreme
right. Another row contains
just reds, and the first column
contains more reds than than
any other column.
3
13
6 3
8
5 8 7
1 5
9
6
8
4
1
1
9 3
6
4 9
6
7 2
vintage (four reds and four
whites) forming a rectangle in
the rack. Within each vintagerectangle the places occupied
by the whites form a
connected set, and the same
is true of the reds. No two
vintage-rectangles have the
same red/white pattern, no
2
Dean Mayer
9
9
1 2
4 6 3
7
6
Hard
TEASER 2866
Garry Kasparov returned to
chess last week in St Louis.
While his result might not
have been spectacular, his
appearance drew record
viewing figures online and
left fans hoping for a more
substantial comeback.
Kasparov displayed strong,
creative play throughout the
event but he was often let
down by his handling of the
clock — an understandable
issue for a player lacking
match sharpness.
The highlight was Garry’s
performance on the final day,
including a trademark Sicilian
Najdorf victory which we will
see below.
I can also now reveal that I
was fortunate enough to be
part of Kasparov’s preparation
for the event. To witness his
passion for chess at first-hand
was truly inspiring.
Send your solution (first move only), to Sunday Times Spot the Move 1077,
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 £20.
WARM-UP
Each row, column and 3x3
box must contain the digits 1
to 9. Winners will receive a
Collins English Dictionary &
Thesaurus.
1 Moving up with risk —
mountaineer’s sling is the
answer (6)
2 Sort of webbed article
carried by two friends (8)
3 One adequate factory
closed off plant (6)
4 Plant in square opened by
Her Majesty (6)
5 Rascally old soldiers upset
fellow (5)
6 Each pig south of lake in
pasture (6)
7 See farm animal, with
river rising, in plant that
makes it mad? (8)
8 Free advice no longer
given to them (6)
10 Communication from
Paris about to be taken to
north European (6)
16 Capture man with bad
habit, fellow with wicked
wife (8, three words)
18 Heathen god with
imposing bearing, one to
spoil the fun of old (8)
20 He is naughty nabbing two
maidens put in a trap (6)
21 Quiet old character died,
reduced to a minimum? (6)
22 Marched — and walked in
step periodically (6)
24 Poet or knight (6)
25 Drug — the classical way to
swallow a grain (6)
26 Gentleman admitting love
before end of the party (6)
28 Rascal in danger, half
hidden on top of tree (5)
deign, dengue, design, digest, ding, dingus, dugite, dung, edge, eugenist, gene,
genet, genie, genius, gens, gent, genus, gist, gîte, guest, guide, guided, guise, gust,
ingest, negus, nudge, sedge, seeing, segue, siege, sign, signed, signee, signet, sing,
singe, snig, snug, sting, studding, tedding, tenge, ting, tinge, undigested
3
2 Suffering comes to nimble
mover? One may go the
wall (11, two words)
9 Stand up outside a cairn (5)
11 Like intimate combat that
you’ve just seen here! (6)
12 Part of body giving neural
disorder (6)
13 Darling daughter marked
with favour? (6)
14 Female energy with which
Indian widow ensnares
king (5)
15 American head of society
appears in ripped silk (7)
17 Women seen in foreign
city station once (5)
19 Genius is leading Ireland,
high-ranking woman (8)
23 House-to-house
transporters bring me
back into Bristol team? (8)
27 Wild tree hiding a plant (5)
29 Big organisation in
financial trouble or still in
good order as before? (7)
30 Greek character maybe
wanting lobsters, not
cold (5)
31 In night of informality, see
someone by river (6)
32 Title, something
conveying meaning to the
rank and file (6)
33 Boy, one knocked over,
showing no lumps? (6)
34 Top female taking time,
getting about — behind as
before? (5)
35 Depression, with
restricted period at home
a decisive factor (11)
CROSSWORD 4761
David Howell
Easy 21; Medium 5; Harder 174
2
CHESS
Down
1 The sun, during Monday’s total eclipse 2 Final chimes of Big Ben, silenced
for four years for repairs, as described in reports 3 It’s a robot 4 Using
washing-up liquid 5 Listed among “coolest neighbourhoods” by Lonely
Planet 6 35, says survey 7 Women, after plan to admit them was rejected 8
$68m, says Forbes magazine 9 Game of Thrones 10 Iris, 2, climbed onto
Alastair Stewart’s desk during ITV News interview with her mother
1
Across
Don Manley
KILLER SUDOKU
8
9
2
4
3
7
6
1
5
5
1
6
9
8
2
7
3
4
3
4
7
1
6
5
8
9
2
7
6
1
5
2
4
9
8
3
9
5
3
8
7
6
2
4
1
4
2
8
3
9
1
5
6
7
1
8
4
7
5
9
3
2
6
2
7
9
6
4
3
1
5
8
6
3
5
2
1
8
4
7
9
3
6
4
2
9
5
8
1
7
2
1
8
7
4
6
9
3
5
9
5
7
3
8
1
6
4
2
8
3
6
4
2
7
5
9
1
7
2
1
9
5
8
3
6
4
PRIZE 1158
4
9
5
6
1
3
7
2
8
6
8
2
1
7
9
4
5
3
5
4
3
8
6
2
1
7
9
1
7
9
5
3
4
2
8
6
4
4
3
3 3
PRIZE 1159
2
3
4
18
The Sunday Times August 27, 2017
MONEY
FAME AND FORTUNE
CHRIS WYLES
TOM STOCKILL
I’ve found
life after
rugby — in
the pub
The veteran Saracens and US player
tells Rebecca Myers why he has started a
lager company with a former teammate
C
hris Wyles is more used to
tackling 15-stone men than
business problems, but he
started combining the
boardroom with the rugby
pitch three years ago when
he co-founded Wolfpack
Lager. Wyles, 33, still plays
on the wing for Saracens as
well as running the beer
company he set up with Alistair
Hargreaves, a former teammate who
retired from the game last October.
The idea, he says, was “staring them
in the face” when they used to meet over
a pint to discuss starting a business.
Their beer, made in Suffolk, is now sold
in more than 50 pubs and bars around
London. They also run a double-decker
bus and a Land Rover that function as
mobile bars, providing refreshment for
fans at Saracens’ Allianz Park stadium.
Wyles was born in Connecticut and
played for the US national side — known
as the Eagles. He captained the team at
the 2015 World Cup before retiring from
international rugby last year.
He and his parents moved to
St Albans, Hertfordshire, when he was
11. He began to play rugby here and
turned professional after graduating
from Nottingham University with a
degree in politics. He lives with his wife,
Amy, 32, and their one-year-old son,
Finn, in northwest London.
How much money do you have in
your wallet?
I normally keep about £50, just for
peace of mind or things like a car wash.
What credit cards do you use?
A Mastercard and an Amex for air miles.
Are you a saver or a spender?
By nature I’m more of a saver, but I’m
definitely a binge spender if I get into
a groove. I hardly ever buy clothes,
but when I do, I’ll buy all I need for a
couple of years in one go.
How much did you earn last year?
I make a six-figure sum. As well as your
salary from the club, you can get
ambassadorial roles and sponsorship
Brain power: Chris Wyles gained a politics degree after resisting the urge to leave university to play rugby. ‘My dad made me stick it out, and I’m so glad he did’
deals. I have one or two but they’re fairly
small compared with the Lions and
England guys’ big sponsorship deals.
Because I’ve got a full-time job, I don’t
take a salary from the business at the
moment — that all just goes back in.
Have you ever been really hard up?
I went through the whole student loan
situation while I was at Nottingham
University. Once I graduated and
became a professional rugby player,
the early contracts were pretty small:
about £15,000 a year.
Do you own a property?
Yes, our three-bedroom house in
Kensal Rise. I’m really proud of it.
The head coach
was supportive,
even though we
were setting up a
beer business
What was your first job?
Pushing trolleys at the Waitrose
in Harpenden, Hertfordshire.
Embarrassingly, I don’t think I lasted
that long.
What has been your most
lucrative work?
It wasn’t technically work but I bought a
one-bedroom flat in Maida Vale, west
London, in 2011. It was my first
property. I did a bit of work to it and,
when I sold it in 2015, I made a six-figure
profit. My main criterion when I bought
it was to be by the Tube, because I knew
for most people, property was about
access and getting into town quickly.
That helped me sell it for a good price.
Do you invest in shares?
I have a stocks and shares Isa, but
that’s it.
What’s better for retirement
— property or pension?
I have got a pension, which I’ve been
contributing to since I started playing
rugby. I fully appreciate the need for a
balanced portfolio, which is why
I have a pension, although I think the
arguments for not having one are valid if
you have good property and a business.
When did you first feel wealthy?
When I first got my student loan! Even
though it wasn’t my money, I felt like I
had some in the bank account.
What has been your best investment?
The business — though a double-decker
bus can cost up to £80,000 and it was a
pretty big risk to begin with.
When you’re starting a business,
there’s an element of fear that can put
people off and there are hurdles you
need to jump over. But Saracens were
constantly supportive — even the head
coach, despite the fact that we were
setting up a beer business!
They said: “If you want to buy a
double-decker bus, there’s space for it
here.” They trusted us. The bus is a big
part of our business because there’s
always a game here, with 10,000
thirsty supporters. Most clubs just want
their players to be players, but Saracens
realised life after rugby was important.
Both Al and I had been knocking
around ideas of doing an MBA or
studying. But we wanted to learn by
doing and I’m glad we took that route.
We were lucky that we could invest in
it while still working; a lot of people take
huge risks with start-ups — remortgaging
their houses and everything. I admire
them so much; it can be so tough,
working all kinds of hours. But I know
there’s a direct correlation between the
work I put in and what I get out, as
opposed to an investment in a stock or
share, which would be out of my hands.
And the worst?
Cars. The sensible thing to do when I
started playing rugby would have been
to buy a decent second-hand car. Instead
I’ve been leasing — I currently have a
Volkswagen Tiguan. But I have a
45-minute drive to training, so a nice,
new, comfortable car is one of my
luxuries.
What’s the most extravagant thing
you have ever bought?
Holidays; we’ve done Dubai and the
Greek island of Santorini, which were
amazing. That’s probably my main
luxury, because when you get time off
from rugby, you really want to go
somewhere you can relax.
What are you worried about?
Like most sportsmen, my worry is
leaving a decent income and going into
an unknown world once I stop playing.
That’s partly what I’ve been trying to do
by setting up the business — to alleviate
that worry — but it’s still a concern.
Al retired early because of
concussion. It’s a big issue for sportsmen
— you go from a decent income to
starting again. I was close to leaving
university to pursue rugby full-time, but
my dad put his foot down and made me
stick it out, and I’m so glad he did. At
Saracens, the younger players in
particular are encouraged to get their
degrees and the Rugby Players’
Association puts a lot of emphasis on
players’ studies.
What’s your money weakness?
Going out for dinner and having a good
time, especially as I live in London.
What aspect of the tax system
would you change?
I’ve just done my will and I have to say I
find inheritance tax frustrating because
you get taxed your entire life.
What’s your financial priority?
To look after the little man, Finn. It
changes your perspective.
Do you support any charities?
I have a role at the University College
Hospital Macmillan Cancer Centre in
London, including going on the wards.
What would you do if you won the
lottery jackpot?
I would take all my friends and family on
a huge holiday; I would rent a massive
chalet for six months and go skiing. I’m
not normally allowed to ski [by the rugby
club] — but I’ve just won the lottery, so
it doesn’t matter.
Wyles in
action for
Saracens
What is the most important lesson
you have learnt about money?
Ultimately, you shouldn’t let money
run your life but you should respect
the value of it and appreciate it.
Relationships and people are much
more valuable.
Another big government
IT project, another fiasco
PETER
CONRADI
Another government IT debacle. This
time it is the Childcare Choices
programme that appears to be
descending into chaos.
The scheme, which offers 30 hours
a week of free care for three and
four-year-olds and raises the amount
of tax relief on paid help, will provide
welcome relief for the many parents
among the ranks of the “squeezed
middle”, “Jams” or whatever is the
current buzzphrase.
As is so often the case, the problem
lies in the execution. With days to
go before the deadline to sign up for
the extra hours of childcare, both
parents and childminders have
contacted Money to complain about
problems with the system: a website
that keeps crashing, access codes that
do not work and helplines that do
anything but.
What of those parents who, through
no fault of their own, are unable to
register by Thursday? When my
colleague, Nina Montagu-Smith, tried
to get an answer, she was batted
backwards and forwards between
the press offices of HM Revenue &
Customs (HMRC) and the Department
for Education, each keen to pass the
buck to the other. The conclusion:
there is not as yet a policy to deal with
the problem.
We have been here before, of course:
a Google search using terms such as
“government”, “IT” and “fiasco”
provides a catalogue of costly disasters.
Indeed, according to an analysis
by theregister.co.uk, published
last month, one quarter of the
government’s large IT programmes
worth a total lifetime cost of £8bn are
at high risk of failure.
The worst offenders at present,
it says, are HMRC’s £220m tax
digitisation for business plans; the
Home Office’s £341m Digital Services
at the Border programme and Ministry
of Justice initiatives, including £380m
spent on electronic monitoring.
They will struggle, though, to match
the scale of the doomed attempt to
upgrade the NHS computer system,
which was launched in 2002 but
abandoned in 2011. Ministers initially
put the cost of failure at £6.4bn. The
last time I looked, the bill had passed
£10bn and was still rising.
No one is suggesting the problems
with Childcare Choices are in the same
league. Indeed, it seems reasonable to
assume that all those who qualify will
eventually be able to claim their
entitlement.
That is scant consolation for those
grappling with the system now, though.
Juggling work and young children
can be challenging enough. The last
thing parents want to do is spend
hours on the phone being urged by a
recorded voice to be patient.
Don’t get stung
Would you hand over £25,000 to a
stranger who approached you on the
street? Of course you wouldn’t, not
least because you are unlikely to be
carrying that amount of cash. What if
the stranger asked you to take them to
your local bank branch and make a
transfer to them? Again, I suspect
you’d say no.
Yet, as Jill Insley, our consumer
champion, reveals on page 14, that is in
effect what one reader did after falling
victim to an ingenious sting that began
with an innocent-sounding phone call
about the quality of his Sky reception
and ended with him transferring almost
£25,000 to the fraudster’s account.
Barclays ultimately agreed to refund
his money. But it was a close thing, and
due not only to Jill’s tenacity but also to
the bank acknowledging it had reacted
too slowly when alerted to the fraud.
Financial institutions should clearly
do more to protect people, especially
those who are elderly or vulnerable —
for more on this, see page 13. But,
ultimately, we need to look out for
ourselves. Next time someone
approaches you by phone or online
and asks you to make a transfer, think
of that stranger accosting you on
the street.
@Peter_ Conradi
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