Any other business

Why it’s a good time to invest in a pub

13 February 2021

9:00 AM

13 February 2021

9:00 AM

It’s obvious from the body language of Bank of England Governor Andrew Bailey that negative interest rates — much talked about this week — are the last device he ever wants to use. Deployed with mixed success in Europe, this monetary equivalent of Pulp Fiction’s adrenaline jab in the heart is a desperate remedy against deflation, recession and banks’ reluctance to lend. UK banks have been given six months to prepare for the possibility, while Bailey has been talking up the likelihood of rapid recovery as vaccinations advance and Brexit trade disruptions fade. So by the time the banking system is ready, the negative-rate tool should be back in the vault and the Bank’s Monetary Policy Committee — which last week voted unanimously to hold the base rate at 0.1 per cent — might even be looking forward to nudging rates upwards again.

The Bank’s chief economist, Andy Haldane, prematurely hailed a ‘V-shaped recovery’ last summer and has kept noticeably quiet since; let’s pray his boss has read the charts correctly this time. Personally, I’ll make a small bet that he has.

Profitable purpose

The British Academy’s second ‘Future of the Corporation’ summit, online last week, showed progress since the first event in London in 2019. Not least, its organisers had moved on from the slogan ‘Purpose before profit’, which was never going to catch on in FTSE 100 boardrooms, to a more workable definition of corporate purpose as ‘profitably solving the problems of people and planet, and not profiting from creating problems’ — which responsible businesses can readily buy into. Presentations from former US vice-president Al Gore, City investor Saker Nusseibeh and Treasury minister Jesse Norman brought real-world focus to a debate that in the past tended to echo May Day banners calling for capitalism to be replaced with ‘something nicer’.

But that sentiment hasn’t gone away. The summit’s on-screen chat box allowed audience questions to be ranked by popularity.
I asked what evidence Gore had for asserting that companies and funds with higher ‘environmental, social and governance’ scores now generally outperform the rest. A brisk answer referred me to the recent annual letter to CEOs by Larry Fink of the investment giant BlackRock, quoting survey numbers to that effect. But I won zero ‘likes’ from other viewers, whereas the question that topped the poll was: ‘Why do we need corporations at all? Why can’t we just have co-operatives, social enterprises etc?’


Dame Minouche Shafik of the LSE answered that for all its faults, ‘the firm’ is the most efficient way yet invented of organising large-scale economic effort — echoing Churchill’s remark that ‘democracy is the worst form of government except for all those other forms that have been tried from time to time’. Both concepts need articulate responses to 21st-century challenges.

Opening time

An example of purposeful capitalism is the news that Rooney Anand, former chief of the Greene King pub chain, has raised a £200 million equity fund backed by US investors to support the recovery of the ‘great British pub’. These beacons of community life have survived everything the past century has thrown at them, from the Blitz to the smoking ban, and are ‘always bouncing back’, says Rooney, who bucked the trend at Greene King by buying more pubs when valuations plunged in the post-2008 recession; though many independent locals were lost in the following years, prices for successful chains with superior food offerings soared, often chased by a surfeit of private equity cash.

Another 2,500 pubs having closed last year, prime real estate in the sector will be relatively cheap again in the months ahead. Backing the best that remain will be a valuable social contribution — but could also be a shrewd bet on the ‘Roaring Twenties’ recovery which optimists like me and the Governor are beginning to believe is out there.

Mine’s bigger

Jeff Bezos is stepping aside as chief executive of Amazon, 27 years after founding the world-changing online retailer — and whatever we may think of its ruthless practices, it would be churlish not to wish him all the joy his $180 billion fortune can buy. But I yawn when I read that one of his objectives is to spend more time on his Blue Origin space project — in competition with Elon Musk’s SpaceX and Sir Richard Branson’s Virgin Galactic. Maybe we’ll be colonising planets in 50 years’ time or maybe we won’t, bearing in mind that no one has built even a garden shed on the Moon since the first landing in 1969. But I’m pretty sure this contest for the biggest rocket is driven by lower urges.

Back when The Spectatorcarried ‘luxury goods’ supplements, I wrote a piece on ‘men’s toys’ about how the male psyche yearns for elongated, pointy objects that are ‘powered from the blunt end and explosive in the wrong hands’. Shotguns, speedboats, Ferraris and decommissioned fighter jets filled the bill, as did my own ‘bright red, petrol–powered hedge-cutter with a massive 29-inch blade for maximum foliage penetration’. Obsession with rocketry is surely the ultimate expression of this obvious anxiety: Bezos and his ilk should find worthier causes.

Knock-knock winner

Swipes at Brussels predominated in my knock-knock joke competition. I liked ‘Knock-knock! Whoss’zere? Needle. Needle who? Needle little help finding more vaccines, Ursula?’ And two conflated entries on another topical theme: ‘Who’s there? Vlad Putin. Vlad Putin who? Vlad to hear the Black Sea palace is almost finished but we’ll be Putin’ my oligarch pal Arkady Rotenberg’s name on the title deeds.’

The winner, all the way from Suzhou, China, is David O’Connor.

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