Talk of a ‘stampede’ for the exit from the London Stock Exchange (LSE) may be overdone, but there’s clearly a problem. It was highlighted this week by the decisions of the Cambridge-based chip designer Arm to list in New York rather than London and of the Irish-based building supplies group CRH to shift its existing listing likewise. Other multinationals with US interests and tech ventures with hot prospects are rumoured to be thinking the same way.

In short – the argument goes – the LSE tends to generate lower valuations than New York’s exchanges because it is populated by too many old-economy stocks and risk-averse investors, including pension funds and insurers that prefer stodgy bond portfolios to high-growth equities. Brexit and the weak pound have not helped and neither does the Financial Conduct Authority, whose onerous rules have been blamed for the long-awaited and politically painful Arm decision. Meanwhile, Jeremy Hunt’s proposed City reforms, including relaxation of EU-derived ‘Solvency II’ rules that restrict institutional investment, are moving too slowly in the face of resistance from the Bank of England.

At best, this is a regulatory and presentational problem that the LSE ought to be capable of fixing. At worst, it’s a reflection of the UK in serious decline as an attractive place to do business, while the US, boosted by President Joe Biden’s tax incentives for tech ventures, looks all the better. I hope the Chancellor reflects on that as he finalises his Spring Statement.

Taking off again

‘Completely unhelpful… totally offside’ was Matt Hancock’s WhatsApp summary of the aviation industry’s response to Covid travel restrictions in February 2021. ‘Tough for them, but they are just so horribly self-serving,’ replied cabinet secretary Simon Case. ‘I can’t summon much sympathy…’

Well, this column certainly can: airlines were in the front rank of business sectors at risk of being all but wiped out by the pandemic – in its early stage I predicted widespread bankruptcies and nationalisations – and ‘self-serving’ is what every board of directors needed to be in the desperate quest for survival. As former BA boss Willie Walsh has said, carriers were well justified in questioning the science behind testing and quarantine rules that played havoc with their plans to fly again: we now see from Hancock’s texts just how unscientific many of those decisions were.

So it’s good to know that the world’s major airlines collectively surged back to $6.3 billion of profits in 2022, following $40 billion of losses in the previous two years, with Ryanair and BA owner IAG both forecasting strong results this year. It’s also a riposte to the eco-righteous who saw the pandemic as a divine punishment sent to decimate a polluter industry: let’s remember that only profitable airlines and aircraft makers will have the capital to invest in next-generation clean aviation.

No TikTok tit for tat

Reports of ‘TikTok ghouls’ crowding the banks of the River Wyre to make grotesque self-publicity out of the search for Nicola Bulley before her body was found provoked many decent folk to call for the banning of TikTok, whatever it may be. It is in fact a Chinese-owned video-based social media platform, suspected in some quarters of amassing personal data from western users for nefarious use by the Chinese state. That puts it in a similar bracket to Huawei, the manufacturer whose telecoms equipment is now barred from UK and other countries’ 5G networks. TikTok has already been banned from government devices in the US, Canada and EU institutions – while some hardliners also call for its banning on grounds of reciprocity, since Chinese citizens are forbidden to use Facebook and Twitter. 

So that’s TikTok in a nutshell: a mind-rotting cyber-security risk that’s also an invasion of a market to which the West has no access in China. Why not show Beijing we mean business by blocking it? Because, I suppose, its billion ‘monthly active users’ across 150 countries, most of them young, regard it as a badge of freedom and self-expression and if their elders stop them using it they will rapidly migrate to other platforms just as bad; arguably, Facebook and Twitter are already more corrosive of truth and decency than the daily diet of dance videos that makes up the bulk of TikTok content. It’s the way of the world and the best hope is that it will be brought low not by state intervention but by the whim of social media fashion shifting to the next craze.

Bean there

As one who regularly bewails a dearth of inward investment, I might be expected to cheer the news that Starbucks from Seattle is planning to open 100 new UK outlets – having reportedly last year considered selling off its existing 1,000-café chain in the face of rising costs and competition. Leaving aside the issue of undrinkable coffee, all I’ll say is that I hope this £30 million commitment includes increased willingness to pay UK taxes: in the year to October 2022, Starbucks paid just £4.6 million of corporation tax on gross profits of £129 million, of which £34 million was sent offshore in the form of ‘royalties and licence fees’ to other group companies.

I also hope it does not cause the demise of 100 independent coffee shops in such an overcrowded market, of which my London enclave of Seven Dials provides a cameo. There’s a forlorn little Starbucks on Monmouth Street that gazes with envy at Monmouth Coffee’s hipster crowd nearby. A few paces along is my own favourite, Caffè Nero – decent coffee, smiling staff, private-equity owners – but the clear local winner is its neighbour Apple Butter, which invariably has a queue of young female customers waiting to photograph themselves with their coffees and cakes. I’m guessing it’s a TikTok sensation and hoping it isn’t run by Chinese secret agents.