Should the government be prepared to take equity stakes in major companies that will struggle to survive the current crisis? That’s a question already on the table in relation to Jaguar Land Rover and Tata Steel, and likely to arise for British Airways, aero engine maker Rolls-Royce and others. We’re told Chancellor Rishi Sunak is working on a plan, called Project Birch, to bail out ‘viable companies which have exhausted all options’ and whose collapse would ‘disproportionately harm the economy’.
That means large-scale loan support first, with conversion to equity as a last resort — and to some pundits it smacks of the 1970s interventionism that left swathes of under-performing British industry addicted to state subsidy. If they’re really ‘viable’, surely these firms can find new shareholders or merger partners at home or abroad, better equipped than Whitehall to help them reshape their operations for the changed economy ahead? Well, yes, but…
When collapsing banks threatened disproportionate harm in 2008, no one argued that governments should not inject equity to prop them up. Permanent nationalisation is a proven bad idea, but state-held shares can be sold back to private investors when the time is right. Sunak’s early pledge to do ‘whatever it takes’ to support the economy is the sole aspect of this government’s crisis response that has so far stood up to scrutiny and criticism. As the avalanche of economic damage gathers force, Project Birch is, I fear, an inevitable next step.
A fortnight ago I offered a party-game choice between being marooned on a private island with Elon Musk or Richard Branson. For this week’s round: would you rather be locked in Newcastle United’s directors’ box with Mike Ashley, the club’s current owner, or Crown Prince Mohammed bin Salman of Saudi Arabia, his likely successor?
This everyday story of super-rich Premier League ownership has little to do with football, or with the power of sport — so well recognised by a previous Newcastle owner, miner’s-son-made-good Sir John Hall — to boost community morale in difficult times. The League is expected shortly to approve a £300 million takeover of the club by the Public Investment Fund, a Saudi sovereign wealth vehicle chaired by ‘MBS’ — the de facto ruler of his father’s kingdom whose name has been linked to human rights abuses, including (according to a CIA report) the murder of journalist Jamal Khashoggi. The deal has brought protests from local MPs, but the club’s fans are more inclined to chant ‘Anyone but Ashley’; one season ticket holder tells me he can’t wait to see the back of the Sports Direct billionaire, long accused of extracting money from the club rather than investing for its success.
MBS will not, of course, have to explain to cowed Saudi citizens whether a cash-hungry English football club is a sensible investment or a vanity designed to boost his own PR profile. Ashley, meanwhile, is a brutish operator who’s perpetually in the doghouse but we can at least salute his tenacity as his shops reopen and most of his staff go back to work. In this unattractive pairing, he’s the one I’d rather watch a game with.
Glimpse of elegance
I raise a glass to a tenacious entrepreneur of a very different stripe: the American-born shipping tycoon, train operator and hotelier James Sherwood, who has died aged 86. Drinking negronis in the piano bar of his exquisite Venice Simplon-Orient-Express counts as one of the great travel experiences of my life — and at a less rarefied level I still regret the passing of GNER, his bid to ‘break the communist approach to running a railway’ by offering a decent service on the privatised East Coast main line.
As for his Belmond hotel chain (sold in 2018 to LVMH), I have an amusing memory of encountering the great broadcaster Alan Whicker on a super-freebie at the Cipriani in Venice — but I’m told the Splendido at Positano is the one to book for my honeymoon, should post-lockdown euphoria take a romantic turn. To my regret I met Jim Sherwood only once, after his master company Sea Containers had gone bust and GNER had lost its franchise. Approaching 80 but still a powerful, charismatic presence, he had driven to lunch through narrow English country lanes in a stately ice-blue Cadillac Coupe de Ville. Anyone who yearns for a glimpse of elegance in today’s dark world owes him a debt of gratitude.
Right of abode
In 1989, after the Tiananmen Square massacre, Charles Moore’s Spectator campaigned for ‘right of abode’ in Britain to be offered to all UK passport holders in Hong Kong — where I lived at the time. Having heard Charles on the subject at a party hosted by David Tang in the Hong Kong Club, I was moved to write elsewhere advocating not only right of abode but also the development of ‘a new Hong Kong’ in south-west Scotland: a shining new city between the Solway Firth and the estates of the Keswick family, whose Jardine Matheson fortune had been amassed in Hong Kong trading. This would, I argued, both fulfil a moral duty and bring a transformative boost to an under-developed region.
One reader who thought it a terrible idea — so I was told — was The Spectator’s former proprietor Henry Keswick. But as the world watches China impose new security laws that threaten to crush Hong Kong’s remaining freedoms, might a version of my old proposal gain new traction? There are 248,000 Hong Kong holders of British National (Overseas) passports that currently confer only the right to visit the UK for six months. If they were free to move here permanently, imagine the economic boost of an influx of hard-working Hong Kongers starting businesses in recession-hit industrial towns across the country, or even on the Solway coast if its scenery appeals to them. Time for another Spectator campaign?
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