28 ***^ Tuesday 6 August 2019 The Daily Telegraph‘Titanic’ shipyard Harland and
Wolff sinks into administration
By Michael O’DwyerADMINISTRATORS have been
appointed to the Harland and
Wolff shipyard in Belfast where the
Titanic was built, putting the future of
123 workers in doubt.
It employed more than 30,000
people at its peak and is closely associ-
ated with the city’s industrial past.
Accountancy firm BDO has been ap-
pointed as administrator and the com-
pany will file for insolvency today, a
spokesman for Harland and Wolff said.
The shipyard’s Norwegian owners
had been seeking to sell the business
but failed to find a suitable buyer. BDO
had been advising the company on its
failed efforts to sell the business,
The Daily Telegraph understands.
A spokesman for BDO declined to
comment.
Unite, the union representing the
shipyard workers, called on the
Government to save the shipyard by
placing it into the hands of the official
receiver and underwriting thebusiness, similar to the action taken at
British Steel earlier this year.
“Boris Johnson is on the verge of be-
traying Northern Ireland workers,
their families and communities reliant
on skilled, well-paid jobs in addition to
a proud heritage of shipbuilding, main-
tenance and repair at Harland and
Wolff,” warned Steve Turner at Unite.
“Standing back and allowing the
shipyard to fall into administration to
be picked over for scrap value by
vultures looking to make a quick buck
is in nobody’s interest.”
Government support would give
customers confidence to place orders
and enable the company to sign
contracts for ongoing work, he added.
A spokesman from the Department
for Business, Energy and Industrial
Strategy declined to comment as the
situation is a “devolved matter”.
Workers have picketed the site for
the past week and shouted at Boris
Johnson, the new prime minister to
save their jobs on his visit to Northern
Ireland last week. Founded in 1861, theshipyard is best known for building the
Titanic between 1909 and 1911. During
the Second World War it produced
hundreds of war ships and merchant
vessels. It last built a ship in 2003. Op-
erations at the site have been chal-
lenged for decades by increasing
foreign competition and the growth of
air travel. It now focuses on repair
work on equipment such as oil rigs.
“Staving off administration is not
just in the economic and social interest
of Northern Ireland, but in the strate-
gic defence interests of the UK,” said
Mr Turner.
“Harland and Wolff has the largest
dry dock in the UK and the only one big
enough to fit our new Royal Navy air-
craft carriers when they need to come
in for maintenance and repairs.”
Questions have been raised as to the
fate of the shipyard’s plant, including
its two famous cranes named Samson
and Goliath. Goliath was built in 1969
and was joined by Samson five years
later. The twin structures are a well-
known feature of the city’s skyline.Spudulike collapses
after 45 years with
the loss of 300 staff
Just Eat and Takeaway.com
deliver ‘dream combination’
By Oliver GillJUST EAT has agreed terms to be taken
over by Dutch food delivery rival
Takeaway.com, creating the biggest
such company outside China.
The deal values Just Eat at £5bn, or
731p a share. If waved through by
shareholders it will mark a bumper
payday for a Connecticut-based
activist that has almost bet the house
on the two companies.
Cat Rock, an investment firm with
about £600m under management, is
set to book a paper profit of tens of
millions of pounds from the
acquisition.
The activist is a top-10 investor in
both companies. Its stakes in Just Eat
and Takeaway.com are Cat Rock’s
largest two investments.
The merger is the latest example of
consolidation in the food delivery
sector. Just Eat swallowed Hungryhouse
last year, while Takeaway.com snapped
up Delivery Hero’s German arm in
December in a deal worth almost
€930m (£850m).
Delivery companies are facing stiff
competition from deep-pocketed techrivals such as Uber Eats and Deliveroo.
Mike Evans, who will remain as
chairman of the merged group, said it
was a “dream combination, created by
the sector’s dream team” and “will
become a formidable company”.
“It will be at the forefront of product
and tech development in the sector,
and it will lead the way in its
relationship with its consumers,
restaurant partners, its staff, and its
delivery drivers,” he said.
Takeaway.com boss Jitse Groen will
become chief executive and its
headquarters will move from London
to Amsterdam.
A general meeting for shareholders
to vote on the deal will be convened no
later than Dec 20.
The announcement of agreed terms
came as it emerged that Just Eat is
facing a £126m claim from Danish tax
authorities.
The company was founded in
Copenhagen in 2001 but launched a
UK subsidiary five years later.
It made a £21m provision for the
claim in its latest accounts, saying the
full figure would only be payable in the
“most extreme” circumstances.By Yolanthe FawehinmiSTRUGGLING baked potato chain
Spudulike has fallen into administration
after a potential buyer pulled out at the
last minute.
After 45 years the business has
closed all 37 branches as well as the
head office, leaving almost 300 people
out of work.
Joint administrator Neil Bennett,
from business services firm Leonard
Curtis, said: “We are very disappointed
with the outcome after working for
several weeks, firstly preparing a CVA
[company voluntary arrangement]
proposal, which was rejected by the
group’s creditors, and pursuing the sale
of all or part of the business with a
number of prospective purchasers.”
Mr Bennett said the administrators
would seek interest in the chain’s
remaining assets while helping staff
who had been made redundant.
It was founded in Edinburgh by
David and Barbara Leggate with part-
ner Kim Culley and was acquired in
1979 by the British School of Motoring
(BSM). It later demerged from BSM to
become a family-owned business.D
onald Trump’s trade war
with China. Britain’s
looming departure from
the European Union.
Political chaos, a
slowdown in trade, and
the unstoppable disruptive impact of
new technologies. There are lots and
lots of things for major global
businesses, and their shareholders, to
worry about. And yet there should be
space for one more on the list:
Elizabeth Warren.
The Democratic presidential
candidate has put forward the most
radical, detailed plans for an overhaul
of the way capitalism works we have
seen in a generation or more.
From wealth taxes, to breaking up
the world’s biggest companies, to an
assault on private equity, and workers
democracy she is arguing for a root
and branch reform of both business
and its role in society.
It might get her elected, or it might
not. We will find out in the next year.
But the ideas are moving into the
mainstream, and business needs to
start working out a way to respond to
them before it is too late.
The race for the Democratic
presidential election wouldn’t usually
be attracting much attention at this
stage of the electoral cycle.
There are still 15 months before the
country goes to the polls, and anything
could happen before then. Joe Biden,
the former vice president still leads the
race, and the veteran socialist Bernie
Sanders is in second place.
But Warren is climbing rapidly in
the polls. She was the only candidate
to rise in popularity after the latest
round of debates, and the current polls
suggest she would beat Trump in a
national run-off.
Warren is unusual politician. A
wonkish law professor, she was a
Republican for much of her life, and
only switched to the Democrats in the
Nineties, complaining that the
traditional party of the right had lost
its “principled conservative approach
to economics and to markets” and had
tilted the playing field in favour of big
financial institutions.
She has plans for reforming the way
the economy works that are genuinely
interesting, and which are increasingly
setting the political weather.
Unlike the old-school statism ofBusiness should learn to fear
presidential hopeful Warren
Elizabeth Warren’s ideas may be terrible, but they are also entering the mainstreamMATTHEW LYNNYNNNN
L
ast week, Raghuram Rajan,
the former governor of the
Reserve Bank of India,
wrote a piece outlining how
central bankers have
become the fall guys for
populist movements around the
world. Populists tend to claim the have
been given a mandate from “the
people” to bring “the elites” down a peg
or two. And there are few figures more
elite than “pointy-headed PhD
economists speaking in jargon and
meeting behind closed doors”.
Rajan writes: “For a populist leader
who fears that a recession might derail
his agenda and tarnish his own image
of infallibility, the central bank is the
perfect scapegoat.”
In the past macroeconomic stability
was based on the ability of “monetary
policymakers to make difficult
decisions without having to worry
about political blowback”, Rajan adds.
Now central
bankers are
having to respond
to “populist
mistakes for
which they
themselves will be
blamed”. Rajan
doesn’t mention
Mark Carney. But
the torrent of
criticism currently
being directed at
the Governor of the Bank of England is
clearly part of this wider trend of
central banker-bashing.
Some have suggested that Carney
remain silent about the prospects for
the economy between now and his
departure in January despite the fact
that the UK will be leaving the
European Union over that period. It has
been said – apparently with straight
faces – that the Bank should not have
produced a forecast last week for what
the economy will do over the coming
year. Perhaps the people suggesting
this don’t realise that the Bank is
obliged by statute to come up with a
forecast every quarter. ‘The Bank is
obliged bystatute to
make aforecast
every
quarter’Don’t bash
governor
Carney for
just doing
a tough job
Ben
Wrightt
A lot of the anger stems from a
misunderstanding of the most recent
forecast. It has been widely reported
that the Bank said there was a one in
three chance of a recession. It actually
predicted that there is a one in three
chance that the economy will contract
for one quarter and then bounce back
quite strongly. The economy would
have to contract for two quarters in a
row to be in a technical recession.
The Bank didn’t give a forecast for
what would happen in a no-deal
scenario because that is currently not
the policy of the Government. Boris
Johnson has publicly said that there is
only a “million-to-one” chance of the
UK leaving the EU without a deal.
That hasn’t stopped some Carney
critics saying that the Bank should have
produced a no-deal forecast. This means
that he is simultaneously being accused
of producing a forecast for what will
happen to the economy if the UK quits
the EU with a deal (which is the
Government’s stated aim) and for not
producing one looking at what might
happen if we don’t get a deal (which
isn’t). Talk about being damned if you
do and damned if you don’t.
Some people say that the Governor
should tell us now what monetary
measures the Bank will take to soften
the blow of a no-deal Brexit. Some of
those asking for this also say that the
Bank’s forecasts aren’t worth the paper
they’re written on. I wonder whether
they have taken the time to ponder the
irony of asking the Bank to
predetermine its response to a future
that they claim the Bank can’t predict.
The course of the economy following
Brexit will depend on a delicate
interplay between supply, demand and
the pound. It is possible, for example,
that the pound will fall so sharply that
the Bank will want to raise interest rates
to offset inflation. It is also possible that
growth will stall and the Bank will cut
rates to revive the economy. Equally, the
economy may ride out the storm and
the Bank may sit on its hands.
It has said it will not spell out its
response to a no-deal Brexit because it
would prefer to see what actually
happens were that to occur.
Critics have also suggested that the
Governor should get on with making
sure that the economy is as prepared as
possible for Brexit. In fact, the Bank has
been busy doing just that since
the referendum.
None of this is to say that central
banks should be immune from criticism.
If you think that the Bank of England’s
forecasts for the economy are wrong,
then let’s have a debate about its
methodology.
But telling Carney to shut up, to stop
doing things he’s legally required to do
and to get on with stuff that he’s been
busy doing for three years now is just
not particularly helpful. In fact, it’s
actively harmful.
Rajan argues that society will pay a
price for the relentless attacks on
central banks even if they don’t lose
their independence. It would only be
human for bankers to consider looser
monetary policy to stave off criticism.
But in the long run that could spell
greater financial instability, not less.Sanders, or the firebrand socialism of
the rising star of the Left, Alexandria
Ocasio-Cortez, who both sound very
similar to our own Jeremy Corbyn,
Warren is far more dangerous. Why?
Because her ideas may be terrible, but
they are also credible.
A few examples. Warren has put
forward a “grand proposal” to break
up the technology giants, shifting the
debate out of academic circles into
the mainstream.
Any firm with revenues over $25bn,
(£20.5bn) which would cover
Facebook, Apple and Google, would be
designated a “platform utility”, strictly
regulated, and prohibited from selling
anything on their own platform.
Takeovers such as Amazon’s
purchase of the grocery chain Whole
Foods and Facebook’s of WhatsApp
would be reversed. Others rail against
the power of technology, but Warren
has a detailed plan to crush it.
That is not all. She has a radical set
of policies to curb the power of the
private equity firms, or “vampires” as
she calls them.
They would be stopped from selling
and leasing back property portfolios, a
common tactic for taking money out of
a company; they would be prevented
from charging monitoring fees; and
most seriously of all they would be
made liable for the debts of a company
they own, which would make them far
more nervous about loading them up
with borrowed cash.
Those rules would change the
private equity industry, which runs
huge chunks of the economy, out of
all recognition.
There is plenty more. She has
proposed simply writing off studentloan debt of up to $50,000 (£41,000)
for anyone earning less than $100,000,
which would cover 95pc of Americans
with college loans.
Her planned wealth tax would levy
2pc annually on fortunes above $50m,
and 3pc on anything above $1bn,
which she estimates would raise $2.7
trillion over a decade.
A plan for workers’ democracy
would force any American corporationwith sales of more than $1bn annually
to allow the staff to appoint 40pc of
the board, as well as limiting the ability
of senior executives to sell shares they
receive as part of their pay.
She is, not very surprisingly, a fierce
critic of Donald Trump, but she has
embraced at least some tariffs as part
of a programme she describes as
“economic patriotism”, which would
include an activist industrial policy,
lots of green investment, and forcing
the Federal Reserve to target the dollar
to help industry.
Take it all together and it would add
up to the biggest overhaul of economic
policy in the US since Franklin D
Roosevelt took charge of the White
House in 1933.
True, there are plenty of holes in all
Warren’s policy positions. The tech
giants are very, very big, but that
doesn’t necessarily mean they are
monopolies. Amazon for example only
accounts for 5pc of total retail sales inthe US, if on and offline are combined,
and the web remains the most brutally
competitive market ever created. The
private equity industry is far from
perfect, but if you make an investor
liable for the debts of a company it
puts cash into then you undermine the
whole basis of the limited liability
company, which most economic
historians view as one of the
cornerstones of free market
capitalism.
Putting workers on boards has been
tried lots of places, and so have
industrial strategies and wealth taxes,
and the results have never been very
impressive (if they were, France would
be taking over the world).
And yet the important point is this.
They are all well thought through, and
they address genuine problems.
Many people feel that the world’s
giant corporations have become too
powerful, that chief executives are
paid too much, that ordinary workers
are not getting a fair share of the cake,
and that asset-stripping,
financially driven capitalism has run
out of control.
If nothing else, she is starting a
debate on how to fix that.
It remains to be seen whether she
can capture the Democratic
nomination. The front-runner, Joe
Biden, is uninspiring, and Bernie
Sanders, her main rival on the left of
the party, is hardly a fresh face, but
there is stiff competition.
It is even more debatable whether
she can defeat a pugnacious Donald
Trump, especially if the economy
remains strong.
To many people, Warren comes
across as a naggy, wonkish version of
Hillary Clinton, and that hardly
worked out very well the last
time around.
And yet whether she wins or
loses the election may not matter
very much.
Plans for fundamentally challenging
the way business operates, the way it
is regulated, and the way it is taxed are
growing in strength all the time (don’t
be surprised to see a few of Warren’s
ideas in the manifestos of the major
parties at the next British general
election, especially on forgiving
student debt).
As they enter the mainstream,
business will have to pay attention,
and start joining the debate.
Neither major corporations, nor
their shareholders, can any longer
assume the world they have operated
in for the last 30 years is going to be
around much longer.
There is plenty of day-to-day noise
in the markets – but that matters far
more for the next decade.‘Warren was the only
candidate to rise inpopularity after the latest
round of debates’Business comment
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