The bank holiday turned out to be a hot one, not least in the takeover arena. First, Shire Pharmaceutical accepted a £46 billion offer from Takeda of Japan — though the stock market did not seem wholly convinced that the deal will proceed. If it does, should we care?
Shire is a FTSE100 company that began in the UK and ended up stateless. As a start-up in Basingstoke in 1986, it made calcium-based treatments for osteoporosis; since then it has grown by acquisition to become ‘the world’s leading global biotechnology company focused on serving patients with rare diseases’. In 2008, when it was the UK’s third biggest drug manufacturer, Shire shifted its domicile to take advantage of Ireland’s ultra-low corporate tax rates. In 2013, when it bought the Pennsylvania-based Viro-Pharma group and signalled a reduction in its presence here, the FT called Shire’s strategy a ‘fresh blow to UK life sciences’.
The group is now based in Dublin and run by a Dane, with key sites in Massachusetts and Switzerland; two years ago it announced plans to wind down in Basingstoke. In short, Shire left these shores in spirit long ago; hence there’s no reason to regret its proposed marriage with Asia’s largest pharma group, Takeda. Yet I can’t help wondering what differences in tax policy, research incentives and the nurturing of science skills over the past 30 years might have persuaded Shire’s bosses that the UK would always be the best base from which to build a global empire.
A stronger challenger?
The other impending deal of note was a £1.6 billion all-share offer for Virgin Money from CYBG, parent of Clydesdale and Yorkshire Bank. This would create a six-million-customer ‘challenger bank’ — eclipsing the likes of TSB, currently crippled by IT problems, and Metro Bank — and would be a potent combination of Virgin marketing clout with CYBG reach, which includes a foothold in small-business banking. But again, we might ask, is there anything to regret? One fewer high-street challenger may be notionally a bad thing; but one considerably stronger challenger would surely be a good thing. Virgin Money, built on the branch network of the bankrupt Northern Rock, has made its mark in mortgages, credit cards and savings products under the leadership of Jayne-Anne Gadhia, who is Britain’s most fêted female banker. Clydesdale and Yorkshire have loyal customers and good names but not much else to boast about, having only recently shed the baleful influence of their former parent National Australia Bank, from which CYBG was demerged in 2016.
Between them, Virgin and CYBG might make a nimble competitor for the bigger banks that continue doing so much to irritate their customers. And in passing I raise my Panama hat to Sir Richard Branson, who back in 2007 was deemed unsuitable as a buyer for the rump of Northern Rock but who came back to do that deal in 2012 — and if this merger proceeds, will be able to cash out his one-third interest in Virgin Money at a handsome profit while continuing to charge a royalty for the use of the Virgin brand. What a cunning old dog he is.
Knuckle down, kids
Would it really be fairer, in an inter-generational sense, to whack an ‘NHS levy’ on pensioners while giving every 25-year-old £10,000 to help them buy a first home or start a business? These are recommendations by the Resolution Foundation, chaired by former Tory minister Lord Willetts, to address what it sees as a breakdown in the ‘contract’ between young and old. That contract allegedly says that each generation should expect to be better off than its parents — but in the current economic climate, many of our delicate ‘millennials’ believe they’re going to end up worse off, unable to afford their own homes and saddled with the ever-rising cost of healthcare for oldsters who refuse to pay for it themselves.
Well, I wouldn’t really call that a contract, kids, more an unwarranted sense of entitlement. What’s more like a contract is the idea that if you work for 45 years, pay your taxes and stay out of jail, you should be able to look forward to a relatively comfortable old age. The young, after all, really have no idea what the future will look like — but I can tell them that it looked dire for my lot, starting adult life in the mid-1970s, and turned out fine. The only answer is to knuckle down, get on with life and see what happens.
I’m not averse, on the other hand, to the £10,000-at-25 proposal, but I’d invite the young to compete for it rather than receive it as of right, explaining what they plan to do with the cash, and the well-off old to pay for it on an individual, face-to-face basis. That way, the donor could also offer the recipient a bracing lecture on how to shape up.
A northern reason to be cheerful was this weekend’s ‘Tour de Yorkshire’ cycle race, which passed through my town of Helmsley in less than two minutes but kicked off a party that lasted all afternoon and provoked a huge spike in lager sales. The event is the legacy of ‘Le Grand Départ’, the brilliant marketing coup that brought the start of the Tour de France to Leeds in July 2014. Now it’s an annual four-day fixture that attracts two million spectators and claims to inject £64 million into the county — comparable to the estimated economic impact of next week’s royal wedding.
And the genius of it is in the ‘de’. Allegedly because the race is managed by the Paris-based events company Amaury, its official vocabulary is French — turning the big climb before Helmsley into ‘Côte de Sutton Bank’, for example. Locals not known for Francophile leanings have adopted this with unexpected warmth, and could be heard muttering ‘Ey-up, it’s tête de la course’ as the race leaders approached. Perhaps after next year’s grand départ from the EU, cycling will offer a path to rapprochement.
Subscribe to The Spectator Australia today for a quality of argument not found in any other publication. Get more Spectator Australia for less – just $1 for 6 weeks