Wednesday 31 October 2018

is BQ still celebrating?


An untimely sick day has not helped my appraisal of the budget this week. Not that much untoward really seems to have happened with a lightening of the austerity for the NHS and some welcome minor tax changes (to call them cuts, when all it is the thresholds not being moved up to increase tax, is something only true lefty could hold out as true).

In the long-term there are some details, buried in the report, on the continuing changes in the property world to balance up more the benefit of being an onshore holder of property. This is to slow the pace of offshore acquisitions and holdings of UK property in foreign funds for tax advantageous reasons. This will slowly lead to a disincentivising of holding UK property for overseas buyers (relative to other jurisdictions), given we are the best place in the world by miles, these changes are a good idea as they will slowly help improve the tax base.

Most importantly, all these years in parliament and our own contributor here BQ has finally, finally managed a bit of pork-barrelling for his own BQ industries - maybe too little, too late. But the direction on reducing business rates for small businesses is a very long-overdue and worthy idea. Congratulations Bill!

Monday 29 October 2018

Fracking: Small Tremors, Big Impact

At the start of the month I suggested the government may be about to lose its nerve on shale gas.  Well now the actual fracking has commenced and we may shortly find out.

Because, inevitably, there have been tremors.  Duh!  Way too small to be felt, still less do any surface damage of course, but there they are, day after day, faithfully recorded and published on Cuadrilla's website.  Interestingly, so far the MSM have been fairly non-inflammatory about it: even the Grauniad acknowledges that "the 0.8-magnitude event [the larger of the two more noteworthy incidents] was about 200 times smaller than the 2.3-magnitude tremor recorded in 2011 that led to fracking being suspended" (it's a logarithmic scale, and the 200x refers to energy released): but of course they also report Zac Goldsmith's witterings.

So.  What next?  If there's an election any time soon, I just can't see any party - including the Tories -  being willing to endorse continued fracking.  The supposed lesson of the 2017 GE hint on fox-hunting has been learned.  Cuadrilla et al had better find something impressive PDQ, or it'll be curtains for at least two election cycles. 


Thursday 25 October 2018

UK Budget 29th October 2018

With Brexit at its most stressful point yet (my gut says the shit deal is nearly signed now for May, with one last capitulation on Northern Ireland to go), we also have a domestic budget next week.

The Prime Minister has already boxed in the Chancellor in a few areas. Promising a tax rise to pay for more NHS, ending caps on borrowing by councils for social housing and promising to freeze fule duty.

On top of all of that, arch-remainer Hammond will be keen to build-up a war chest for the coming years Brexit debacle (as he sees it).

So with all that in play I expect a New Labour budget to be forthcoming. Some tax rises in esocteric areas, such as the self-employed rates. A holding of down of various thresholds and some pretend tax cuts in areas that don't really raise revenue. Also maybe something wild like a Vaping tax to generate the necessary distraction.

Of course, for all my cynicism the Tories overall have done a good job of fixing the Country's finances, albeit it has taken a decade and they would have been better to slash earlier rather than slowly choke pubic spending. Now they have left it all set for the incoming Labour Government to go ape with in a couple of years time.

One thing we won't see in the budget is a major move to reduce taxes in anyway. These days are over, if you are concerned with paying too much in tax then I cannot think of a single party in the Country you could vote for at the next election. Every single one is promising more taxes and a bigger state for the future. Oh for the 1990's!

Monday 22 October 2018

Another week of Brexit...

When, oh when will this end?

Every week the same old story. May says its makes or break, she tries to get a concession out of the EU. They don't play ball, she dreams up a concession with Olly Robbins - her own side get angry but not angry enough to do anything. Then nothing is agreed anyway and the whole story repeats the next week.

In a corporate situation May would have been replaced a while ago now. The long knives would have been out and a nice pay-off obtained with a new leader in to either change direction or just actually do something whatever that was.

But no, we are loathe the repeat the same story week after week. With EU meetings cancelled and can-kicking at the EU standard world-class levels. Worse, the alternative leaders have not thought of a plan which will work yet and neither has the opposition - hence May continues her peripatetic journey of nothingness. Then May has the audacity to say the deal, which no one will sign is 95% is beyond a joke!

Anyway, maybe just maybe something will break this cycle. I can't see who at the moment given everyone is both entrenched in their own positions and incapable of strategic or even tactical change. Will anything turn up?

Friday 19 October 2018

Fork Handles - Brexit version

Related image 

  {In this sketch Ronnie Corbett is playing the UK Shopkeeper and Ronnie Barker playing the EU negotiator customer}
    In a hardware shop. The shopkeeper (Ronnie Corbett) is behind the counter, wearing a warehouse jacket and a hat. He has just finished serving a customer.

    Shopkeeper: (muttering): There you are. Mind how you go.
    (another customer (Ronnie Barker) enters the shop, wearing a scruffy tank-top and beanie and holding a list. He is a bit simple The customer stands by the counter and begins to read items he wants from his list.

    Customer: "Bore, Door."
    Shopkeeper: "Bore, door?"
    Customer: "Bore, Door.
    Shopkeeper: "Bore, door? You want to bore a door. For a lock, you mean?"
    Customer: "Yeah..Bore, Door."

 (The shopkeeper makes for a box, and gets out flat drill bits. He places them on the counter)

    Customer: "No, Bore Door!"
    Shopkeeper: (confused): "Well there you are. These will bore doors!"
    Customer: {Not happy with the items adds an explanation.} "No, bor-der! Border for trade!"

    Shopkeeper. {annoyed} "That's a bor-dah, that is. Not a Bor-door. Anyway you said you wanted it for locks."
    Customer." I do. Triple Locks. European."
    (The shopkeeper goes to another box, and gets out a border agreement document. In Gaelic.. He places it on the counter)
Related image

    Shopkeeper - "Anything else?"
    Customer: "Mugs?"
    Shopkeeper: "Tea mugs, you mean. I've got mugs."  
 {He goes to the far end of the store and comes back with a set of four coffee mugs}
    Customer:{stares at item. Then slowly says..} 
 " idiots. like..Remoaners."

    Shopkeeper: "Oh..Mugs! You mean Mugs. Not mugs. Yes..I've got a list of Mugs. Here.."
 {puts a dossier on the counter} 
 "These are all registered Liberal Democrats. They're all Mugs. They'll support anything you suggest."
Image result for fork handles

    Customer: "Got any 'Oes?"
    (Shopkeeper: "Hoes. Yes we have hoes."
  {Goes along the back wall and selects a hoe, and places it on the counter)

    Customer: {Stares blankly at the item. Then at his list. Then says..}
 " No, Os!"

    Shopkeeper: "Oh..'Ose! I thought you said 'oes!" 
 (he takes the hoe back, and gets a garden hose, whilst muttering) 
 "When you said "Os", I thought you said "'hoes"! 'Ose!"
    (He places the hose onto the counter)

    Customer: "No, Os!"

    (Shopkeeper takes away the hose. Goes to the rear of the shop and climbs up a stepladder, gets a box down, puts the ladder away, and takes the box to the counter, and searches through it for letter O)

    Shopkeeper: "How many d'you want?"
    Customer: "Thirty nine Billion."

    Shopkeeper: (confused for a moment) "39 billion? letter Os?"
    Customer: " No, no, Os! Os for the Brexit Bill. Owes! Owes!"
   Shopkeeper: "What? In pound sterling you mean? That the UK Owes?"
    Customer. "No. You owes"
    Shopkeeper.{reacting angrily} "Me owes? I don't owes..You're getting on my wick.."
    Customer: "Nahh..Not You owes. Euros."
    Shopkeeper: "Oh.I see. Euros. That's what you mean..Uk owes Euros..I see..How many do you want, again?"
    Customer "Thirty Nine Billion."
    Shopkeeper {muttering and looking in the box}  "39 billion..what a joke..I'll have to order some more in."
    {He takes the box back, gets the ladder out again,climbs up and puts the box away, climbs down the ladder, and puts the ladder away, then returns to the counter)

    Shopkeeper: "Yes, next?"
    Customer. "Erm...A, P's."

    Shopkeeper: (now very annoyed): "For Gawd's sake, why didn' you bleedin' tell me that while I was up there then? I'm up and down the shop already, it's up and down the bleedin' shop all the time."
    (He gets the ladder out again, climbs up and gets the box of letters down again, then puts the ladder away) 
 "Honestly, I've got all this shop, I ain't got any help, she's on her tea-break it's a lot of work for one."
   (He puts the box on the counter, and gets out some letter P's)
"How many d'you want? One was it?"

    Customer: "No! A peas! Appease!"
    Shopkeeper: "You're 'avin' me on, ain't ya, yer 'avin' me on? Eh? "
    Customer: "I'm not!"
    (The shopkeeper dumps the box under the counter, and goes and gets a copy of the Munich Agreement of 1938.)
"Yes? Next?"
Related image
    Customer: "Got any 'edges?"
    Shopkeeper: "Hedges..Hedges you want? I'll have to go out the back..So you are sure you want an Hedge. Don't waste my time! Hedges. Like for a border? "
    Customer: "Yeah."
{Shopkeeper goes out back and returns with a garden supplies catalogue. He leafs through to the garden borders page. The customer looks at him. Blank faced he says }

Customer: "No 'Edges. Edges - For cliffs. Cliff-Edges. Crashing over, like."

    Shopkeeper - {very annoyed closes the book and takes it to the back area. Returns and finds a border edging trimmer and places it on the counter.} "I haven't got all day You want anything else?"

Customer: "Washers"
(Shopkeeper finds a box of washers and puts it on the counter. He begins searching through.)

"What size..1.5mm? 3 mm ..Plastic? Stainless steel?"
Customer: "Dishwashers."

Shopkeeper "Dishwashers? You said washers!" {Exasperated!} "These are washers. You mean electrical appliances. Dishwashers."
(He pulls out another catalogue from under the counter and bangs it down.)
  "What do you want. Bosch. Hotpoint?"
Customer: "Romanian."  

Shopkeeper: "Beg your pardon?"
Customer: "Romanian. Romanian dishwashers. For pubs and cafes."

Shopkeeper:  "What!" (He very nearly breaks, and snatches the customer's list) "Look, I've had just about enough of this, give us that list." (He mutters) "I'll get it all myself! What's this!"
(Reading through the list) 
 "What's that, polish?"
(He goes and gets a can of polish.)
"Mr Sheen. For wood. Alright?"
Customer: "No. Polish. like..from Poland. For hospital wards. Farms and windscreens."

Shopkeeper. (Sighs. Resignedly takes away the can of polish. Looks down the list.)
 "Drafts? You have drafts?"  
(Goes up the ladder again and locates drawer of draught excluders. Calls down to customer)
 "What do you want? Brush or plastic?"
Customer: "Plastic."
(Reluctant to come back down without the full product details explored.)
Shopkeeper: "Black or white?"
Customer: "Black and white."
Shopkeeper: "Ah-ha! That's two, then. Thought you could mess me about there, didn't you? Get me to come down with one and then send me back for another. I've just about had enough of this Brexit nonsense, I can tell you." 
(Comes back down the ladder and puts two draught excluders on the counter. One black. One white.
Customer looks at them and shakes his head.)

"Naw. Draughts. Black and white. For Chequers."

(Shopkeeper finally snaps) " Oh that does it! That just about does it! I have just about had enough of this!" 
 (calling through to the back)
  "Miss Brahms! You come out and serve this customer please, I have just about had enough of 'im." (The shapely Miss Brahms comes out, and the shopkeeper shows her the list)
"Look what 'e's got on there! Look what 'e's got on there! It's disgusting!"
(he exits through the back)

Miss Brahms, leaning slightly forward to reveal a full cleavage asks,

 "So Sir? What type of European Union Knockers would you like?"

Wednesday 17 October 2018

Turkey, Saudi, $200 Oil ... Brex and the City

As the Saudis threaten to lash out crazily at, errrr, everyone, and talk of $200 oil is in the air (Putin tried talking that one up a decade ago), it does at least look as though the price will remain firm for a while to come.  Venezuela and Iran aren't going to be contributing much to a downside scenario for a while at any rate.

What's this to do with Brexit?  A couple of things.  The less interesting one (to me) is that the German car industry is already anxious enough, and it can't hurt the negotiations to have them putting a bit more pressure on Merkel/Barnier to offset their $100+ oil concerns.

More interesting is what happens in the oil & gas investment / M&A sectors.  Returns on this sector have not been so great for a while, and equity investors looking for big profits have gone elsewhere.  There has been a steady deal flow, both debt and equity: but without doubt there's scope for a whole lot more: and $100 oil will bring forth a heap of renewed interest.

Here's the thing:  most of this action goes to the City of London - and that ain't gonna change any time soon.  No amount of PR in Paris and Frankfurt is going to undermine London's gigantic advantages in these matters.  And nor will Brexit, IMHO.  To the contrary: it may even free up the City - there are currently at least some Brussels constraints on finance - to be even more flexible and creative than it is already.  As in most regulatory matters, be that finance or energy, British regulators are a great deal more nimble and responsive than any others.  

Now: personally I'm a consumer and $100 oil is not a great prospect per se.  But it'll hurt more in Europe: and I don't see the City complaining.  Why, even the dour Scotties may raise a smile ...


Tuesday 16 October 2018


All week on my way to work there have been people from the People's Vote on the bridges into London handing out their leaflets. In the main, they are not too bad. Some dreadful T-Shirts and the same earnest faces of the deluded Corbynistas, Happily, 99.9% of people walk straight past hoping they will go away.

However, today I noticed a change, clearly some of them are getting angry at lack of engagement they are receiving from the passing public - all of whom of course to them must be passionate remainers. It is not enough to hand out leaflets, they need some affirmation. So today up goes the volume, they are stopping people more aggressively and becoming more shouty.

Of course, with people on their way to work and busy with their real lives, this has zero effect apart from to make the odd leaver get shoulder-shruggy at the intrusion.

On reflection is demonstrates many of the difficulties with modern politics which are evident:

1) there is money to be thrown at causes, like People's Vote, without any real scrutiny of who they are or where it comes from. This would apply equally to the referendum in the first place - political campaigning regulation is yet to catch up with the single issue , identity politics of our age.

2) So many activists live in a bubble away from reality - 99% of people don't really care about Brexit and rightly so, it wont make any real difference to their day to day drudgery.

3) The bubble the activists live in is entirely filled with people of their own views, confronted with reality they can become angry and hostile, as I saw today.

4) Politics in the UK (and across  Europe is badly serving the people). In this country there are 2 main views through which prism people view politics currently -  Leave or Remain. Neither of the main parties can decide what side they are on or what it would mean - so they fudge, fudge and fudge some more. There is no outlet of expression for the main political decision of the day and so everyone feels unrepresented by their politics, Leavers and Remainers. That is a very poor state of affairs for civil society.

Monday 15 October 2018

Hard Border, Then

AS Boris has neatly put it, the EC thinks they have us between the prongs of a fork: "a choice between the break-up of this country, or the subjugation of this country, between separation or submission".  

So - hard border it is, then?



Friday 12 October 2018

Jailbirds I Have Known (2)

The second of my three criminal acquaintances is former Tory MP Keith Best.

When I first met him, Best was an ambitious and hyper-active young Brighton-based barrister and TA artillery officer.  In the late 1970s he was nursing the safe seat of Brighton Pavilion, on the wrong-headed assumption that the incumbent (the Tory grandee Julian Amery, brother of the hanged traitor John), would soon retire.  In the meantime he had to fight the mandatory no-hoper seat and was duly selected for Anglesey (Ynys Mon, if you must) in the sure knowledge he'd lose.  Unfortunately for his Brighton plans, in 1979 he won it on a three-way split with Labour and the Welsh Nats.  Never mind, he thought: I'll lose it next time for sure Meanwhile, let's enjoy the gig - and he threw himself into foreign affairs interests, travelling extensively on parliamentary boondoggles (as well as continuing to be active in Brighton ... and Westminster ... and Anglesey ... like I said, he was hyperactive).

Then along comes the 'Falklands Election' of 1983 and, wouldn't you just know it? - he gets re-elected in Wales!  Damn!  That wasn't the plan at all.  Still, there are always those overseas boondoggles, eh, Mr Q?

And then came the era of the big 'Sid' privatisations.  Stagging was all the rage, and when the BT flotation came along, Best didn't just stag it, he made multiple applications for shares - a criminal offence.  But not just multiple bids: he made them all in different variations of his own name!   It didn't need much detective work to run him to ground.  He was caught, convicted, gaoled (briefly), and had to resign from everything he held dear: the Bar, his Commission, his seat - the lot.

But here's the thing.  He wasn't any kind of Alan B'Stard whatsoever.  At one point I had a lot of contact with Best, and would have unhesitatingly classified him as a good chap.  He was very much on the 'social conscience' wing of the party, which doesn't always sit easily with hacking away for a safe Tory seat: but he didn't hide or compromise his views.  Hyperactivity aside (which can be a bit of a syndrome), he was level-headed and fairly sage - certainly thoughtful.  I've chatted with him for many a long hour over a drink or two in a German pub, and he's the sort of fellow I'd reckon you'd go to for his views if you had a problem.

So where does he get off on blatant, nay suicidal multiple share applications?  I've pondered this one long and hard.   

One possible explanation is a blown gasket - to hell with it, I'm never gonna get that safe seat, nor any ministerial promotion: let's throw caution to the winds!  But that cap never really fitted: like most young and ambitious politicians, he was playing a long game (he was well in with the whips - hence the boondoggles - and reliable in the lobbies) with time on his side.  The nearest I can come up with is that he fell into a kind of entitlement trap:  everyone does multiple applications and makes a fast, victimless buck - why shouldn't I?  Remember that around this time, in lieu of a recommended pay-rise (which the privately-wealthy Thatch decided wasn't on), MPs were explicitly told by their whips to get a copy of the John Lewis catalogue and fill their boots on expenses, no questions asked.

Not a very satisfactory explanation, actually, but it's all I can come up with.  He never explained himself to me, anyway - and it's hardly a topic you press someone on.  (Come on, Keith - what sort of loony are you?)

And since his time in the slammer?   He's gone for the Profumo path to redemption, quietly working away - with characteristic commitment and energy - in leadership roles for several charities, see wiki for details.

A strange story indeed.  Human beings, eh?


PS: there won't be a separate post on Jaibird 3 because nobody will have heard of him.  I'll add something BTL in comments over the weekend on him ...
UPDATE:  done - in comment #5

Thursday 11 October 2018

FTSE since September - Tin hats after all?

Sometimes a picture says it all. After an OK start to the red warning season the FTSE is fast entering the most dangerous part of the year on a severe skid. As are other world markets. There was me thinking we had got through crash alley unscathed....

Tuesday 9 October 2018

Judge Kavanaugh vs Taylor Swift

Many C@W readers will have ample perspectives of their own on the politics of the USA, so feel free (as you always do) to pile in.  But here's my idiosyncratic observation on the imminent mid-term elections.

The main show seems to have been the Kavanaugh confirmation - which I assumed probably wouldn't happen.  Why?  Because the great bargain that Trump has struck with the truly conservative Right in America is to nominate congenial appointees onto the Supreme Court (which has an effect lasting many years) in return for their votes.  The conservatives delivered for him; and with two nominees they greatly favour, Trump has played his part in return.  Gorsuch was already home and dry, last year.  In the run-up to the midterm elections, it seemed to me any anti-Trump sentiment whatever in the Senate (and there's plenty) would translate into a thwarting of Kavanaugh, to weaken conservative enthusiam for voting.

Well, what did I know.  Kavanaugh is confirmed by a hairsbreadth; the conservatives are delighted (at the bottom-line outcome, at least) and presumably will show their gratitude both now and in 2 years time.  They really have got something they wanted - badly wanted.  Maybe Senators feared a mighty backlash if they acted otherwise.

Somehow, as these techtonic plates grind, Taylor Swift's, errr, intervention - though doubtless welcome to the Democrats - looks somewhat less than a knockout blow.  Am I wrong about that also?


Monday 8 October 2018

Coming Soon: a Total Ban on Plastic

Recently I was sent a slickly-made, hour-long UK anti-fracking vid.  It was designed to seem really homespun, but the production qualities were just too high, and the chap fronting it (a bluff, endlessly personable northerner) turns out to be based in a New York film studio.

Anyhow, it took the form of extended voxpop clips interviewing nice, concerned folks in the shale gas exploration areas of the midlands and the north.  They were avowedly activists, but with one exception (of which, more below) they were all just-like-your-old-mum-and-dad types.  One was an eccentric: but Swampy was nowhere in sight.

Obviously, they were all spouting alarmist rubbish as though it were true, whilst all the time claiming not to be Nimbys.  There's nothing wrong with being a Nimby, BTW, though it's more honest to admit to it.   But here's the thing.  They'd obviously been fed the line that INEOS (one of the would-be frackers) is the wickedest company on the planet, and that the reason they are exploring for shale gas is to use it for making (*gasps*) - PLASTIC++.  And as one of the women being interviewed says:  "... and we don't need plastic".

We don't need plastic ...  As a society we are, of course, deep into personal unicorn territory now.  Given his success with promising to cancel student loans, we might imagine there isn't anything Corbyn won't offer at the next election and it will be swallowed by hundreds of thousands of voters.  Right this minute, with wall-to-wall dying turtles on TV, I'd guess the promise of a *total ban on plastic* would have a significant segment of the electorate rushing to the voting booths in a state of high excitement.

More plausibly, however, there must be very short odds on Labour making a fracking ban a headline policy - notwithstanding the unions who support pretty much any realistic industrial prospects, as well they might.  In the aforementioned vid, all the voxpop interviewees were earnest and articulate B/C1/C2s, eminently likely to bestir themselves on polling day, who have been told that fracking will (a) kill them and even more saliently, (b) trash their house price.

Which brings me to the other interviewee.  It was Lee Rowley, a Tory MP, who has clearly decided that, because he is their leader, he'd better follow them.  He can't conceivably be alone on his side of the green benches.  I had been assuming Tory policy was one of getting some exploratory fracking done ASAP, prove up vast reserves (or not, as the case may be), and if there's as much gas there as INEOS, Cuadrilla et al believe, generate cash giveaways on a scale to make even Nimbys think again, comfortably in time for GE 2022.

And if there's an early election?  Or if Corbyn is 5% ahead in the polls in 2021?  I think we will find every single UK party pledging to put a stop to it all.  In an era of fake news and slick vids on social media and personal unicorns being promised for all, this one is starting to get the middle classes seriously exercised.  And who's going to tough it out against that sort of opposition?


++ given that Jim Ratcliffe ostentatiously imported a cargo of "shale gas" (actually ethane of course, and not methane) as a plastics feedstock, there is a kernel of truth in this.  What a dick he is!  The oil and gas industry may live to rue the day they let amateurs front for the UK fracking industry.

Friday 5 October 2018

C@W solves the retail and housing crisis. Before lunchtime.

Image result for sshops closed down yeovilImage result for yeovil shops closingImage result for yeovil shops closing

Yeovil High Street has seen better days. 

Currently it's a rambling collection of not very good stores sandwiched between empty units. There are almost as many fake fronted stores, covered over to disguise their absence of tenants, as there are genuine ones. A gap toothed, broken fence of shops runs down the main high street and the uncovered parallel centre. 
In a secondary shopping precinct of ten units just one is let.
I looked at an empty unit across from this one today. I looked at it back in 2005 when it was a baby goods shop. A really nice one. But the rent was too high. And the rates and service charges meant almost £80,000 of profit would have to be spent on nothing of any worth. The shop was last let in 2009. Its been empty for almost a decade.

Yeovil is far too sprawling. No retail consultant needed to see that. Shoppers walk far up and down for not very much. The cinema and leisure complex is well removed from the high street. Meaning a swathe of closed and cheap and grubby units, with some decent eateries and a hotel separate the two. Always, always the planning should have united them into one continuous experience. 

Another problem is the lack of big names. Yeovil is a 45,000 population town. Now that's piddly by Home Counties standards. Woking commuter town is coming up to 100,000. Tunbridge Wells in leafy Kent is 112,000. Even what almost passes for a village outside Birmingham, Sutton Coldfield, is 100,000. The ever ghastly, concrete ugliness, of Slough, is 150,000. So 45,000 is no great shakes.

But, it is, all there is. The catchment is much wider than normal. Twenty or thirty miles out in all directions. And while Somerset is sparsely populated, they all have to shop somewhere. And that should be Yeovil. Simply because there isn't anywhere much else better.

But Yeovil town centre has created big problems for itself. There are several, nearby, out of town retail parks. And many of the names in town, moved out when the crash came. So Yeovil High Street has Primark. And H&M. An average M&S. HMV. Monsoon. Laura Ashley. Entertainer and JD.

While out of town is Matalan. TK Maxx. Next. Sport Soccer. Pets at Home. Costa. Homebase, B&Q, even KFC is out of town. 
There is no 'destination.'

My associates today were looking at the possibilities of shrinking the UK retail space. 
They don't need to.It is shrinking itself. 

But these local officials wanted to consider, perhaps, possibly, turning shops into houses. Something readers here have long thought needed to be done. And quickly.

But the problems are very many. Landlords. Rents. Leases. Listed buildings. Access. And loss of a handsome £30-£100k of retail rates for a paltry £3.5 maximum from two houses on the same spot.

Retail units and high streets, unless very old, are not designed for modern housing. They are pedestrianised. There is road access. But there is no parking. No gardens. No outdoors at all. They are odd shapes. And odd heights. In odd places. 
So flats would seem a better option. But these retails have no stairs. And the upstairs may be a different landlord to the down.

All could be overcome. But it would take a lot of will. And a lot of complex negotiating. And there would be immense pressure from existing tenants to prevent it. Shops need footfall. Houses are not footfall. Other retailers are footfall drivers. If you own a clothes shop, a Mcdonalds opening on one side and a Vodafone on the other is fantastic news. Four flats whose owners will be at work all day is no use to you at all.
So the whole high street. Or Side streets need to be converted in one go. To make it work at all.

So, as we ordered our lunch in Boswell's of Yeovil /{4/5 trip adviser seemed fair}  the usual daunting and unrewarding and difficult prospect of turning bad retail into good housing loomed like it has every time someone tries to look at it since 2008.

Until.... I cracked it.

Don't try and turn bad retail into good housing. Turn bad retail into good retail. Which is what it was built for. 

The trend to online won't stop itself. All the food stats show people want to shop more locally, more often. Using more locally sourced and prepared products.* The big out of town weekly shop is declining. The thinking is the successful shopping areas of the next ten years, assuming there any left by then, will be a mix of leisure. Services. Retail. Medical. Education. Hospitality. A lot less physical goods. But a lot more food and drink. Spas and art classes. Tattoo designer and video gaming big screen type venues.**

So instead of shrinking the high streets, that are built for this type of thing and set up for it. Axe the out of town retail. And use those giant. Flat. Fully accessible, mostly empty spaces, to build brand new homes. 

Image result for plan of babylon  retail park

Image result for plan of babylon  retail park 

 This is one of those Yeovil retail parks. A good one. A mostly successful one. But look at the size of it. How many homes can be built on here? There are 560 car parking spaces here. And room for more.

The access and commuter roads are all in place. So are the bus routes. A station is within a moderate walking distance. And so is Yeovil town centre. Which is where these new dwellers will go to shop.

So, how does this work?

The retailers are offered deals to take the existing units within Yeovil town centre. Good deals. Fantastic deals. Rent free periods. Fitting costs. Renovations. Big rates reductions. Whatever it takes.
Added to this carrot is the whacking great stick of a new, out of town tax, the government will be persuaded to introduce. And not before time.

The landlords, who have invested millions in their retail parks that will produce rents for pension funds, will receive the immediate boost from turning commercially valued land into residential  valued space.Why struggle with the ever diminishing and declining retail brick business, which is already far too large for the available clients, when there is money to be made in the under-capacity, in demand, housing market?

Then, the stabiliser for the whole project. The 5%, post Brexit, VAT rate, for designated high street zones that will not apply to online warehouse operations. That will level the playing field. 

Restoring the high street. Recreating some of the million lost retail jobs. While leaving the internet and online much as it is now.

I think that before my ordered ham and cheese toastie arrived, I had solved both the retail crisis. And the housing crisis. Restored half a million jobs to the economy. Solved the declining local authority business rates problem in the long term. Boosted their domestic council tax funds. Solved the problem of the missing and scattered big name anchor retail brands. And with the high street premises VAT cut, devised a way for the government to present a visible, tactile, financial reward to the public, that clearly demonstrates the possibilities and opportunities of the post European Union era.

When the dessert comes, I think I'll mull over immigration. 
Sort that old chestnut out.

*I have a big issue with those stats about locally grown,pay a bit more, shop a bit more often. They are in every trade magazine. But they never explain the popularity of Lidl and Aldi which is a drive for cheaper goods and food. Or the poundshops. Which is a cheaper driver. Cheaper than the internet.
Or Primark discounting. The rare retail success at the moment. being a former discounter myself I'm well aware that the 1991 recession was not too bad. And Q3/4 1991, which killed a lot of companies, was a real boom time for us.
However, the trend is true. So longer term..

** Yeah I know. Sounds very much like an 'architect's impression' of a hotel and resort. But again, the trend is correct. More services. Less Retail.

Where in the world is BQ today ?

Following on from CU’s jet setting lifestyle.
Where exactly is BQ 'living the dream' today?

Wednesday 3 October 2018

Shell, Canadian LNG - and a Chilly Winter Ahead

Back to the day job ...

Shell has announced a big ($12bn) new LNG liquefaction plant, to be built in - Canada.  This is worthy of note, on two grounds.

Firstly, Shell executives have spent the past several years muttering that if they'd seen the current gas 'glut' coming, they wouldn't have gone ahead with Qatargas 4, a commensurate giga-investment a decade ago.  That's the commodities cycle for you.  So - do they now see the oversupply coming to an end?  Are they banking on China to ramp up its usage of natgas?  People have been expecting this for many years - but the big Chinese ramp of the moment is, errrr, coal.  Still, when the lemmings assemble at the LNG cliff-top ...  there are likely to me more hurling themselves over the edge.   Yes, that's the commodities cycle!

Secondly, this project was not at all top of most people's lists for the next LNG project FID - projects in the USA (and elsewhere) were supposedly ahead of Canada.  (Immediate insider commentary is that US wage rates are prohibitive in the sector.)  If Canada is looking good, there really are quite a few more projects worldwide that will fancy their chances.

However, as we all know the lead time of these ventures is measured in years.  As it happens, winter 2018-19 is looking quite tight, 'long-term glut' notwithstanding.  As Norway and the Netherlands ease back on the gas throttle, Russia has stepped in to meet quite a lot more of Europe's demand than before (to the sound of Trump's teeth gnashing).  There may not be much more to come for Europe from the east over the traditional chilly period of Jan-March next year.  Just saying ...


Monday 1 October 2018

Jailbirds I Have Known (1)

So - Elon Musk slips past the slammer.  Not so lucky was Jeff Skilling, also done for misleading shareholders (and a couple of other things).  The SEC was in a more vengeful mood after the Enron meltdown - at the time, the biggest corporate crash there'd been - resulting in a $45 million fine, and 24 years inside.  He thus became the third chap to enter my short list of personal acquaintances who've partaken of the porridge.

Skilling was an amazing chap: not only a visionary, but someone who could execute on what he envisioned and implement it - a rare combination indeed.   He was the kind of leader who commands by sheer force of knowing exactly what to do, in circumstances where everyone else is scratching their heads over the sheer impossibility of the task they've been given.  He's often described as arrogant, but that was no part of his demeanour - he's a small chap, and as personable and approachable as could be imagined for someone perpetually under enormous pressure and with huge responsibilities.  He wore his intellect lightly, and while he probably had no time for fools, well, he didn't have time for very much at all, which was far more to the point.

The pressures, responsibilities and impossible tasks were all of his own making.  He had a vision of the gas and electricity markets that was as radical as Bill Gates' dream of putting a computer on every desk.  He was going to take those two commodities - previously the preserve of monopolies the world over - and make them into traded commodities in open, liquid, competitive markets.   Enron was to be his vehicle.   Nowadays, what he envisioned might almost seem commonplace; but consider two gigantic reasons why this was highly visionary and utterly revolutionary. 

Firstly, there was a body of economic doctrine holding that natural gas was a "paradigm example" of a commodity that could not be traded - for specific, real and enduring phsyical reasons.  No-one was even contemplating the idea that electricity, too, could be traded; those same physical aspects were present in even more extreme form.  These things were impossible!

Secondly, the status quo was dominated by statutory monopolies with considerable political clout and absolutely no interest in seeing things changed.  Indeed, they didn't even believe change was possible - a weakness in their position, because they didn't exert themselves against Enron quite as fully as they might.

That isn't to say the acquiesced.  Far from it: they lobbied and stalled and blocked and abused their monopolies royally to fend off the coming of open markets.  Albeit clumsily, every man's hand was turned against Enron - hardly what Gates faced when promoting his own ambitious vision.

But Skilling was a true Field Marshal, understanding the multi-front theatre spread before him and judging exactly how to conduct operations across so many battlefields.  He chose his subordinates well, commanded their complete confidence, turned them loose with compelling orders and strategies - and won engagement after engagement, battle after battle against his powerful but sluggish and uncomprehending foes, until the whole world of gas and electricity rolled up before him. 

There's a load of rubbish written about Skilling, and Enron in general.  It's fair to say, not a single true insider has written a book yet (Sharon Watkis wasn't remotely 'inside').  Yes, manifestly, the whole Enron thing devoured itself in the end: the reasons are for another day.  Yet Skilling gave a pedestrian medium-sized company - a gas pipeline company! - an extraordinary 14-year run of non-stop growth.  By the end, it was the largest commodities trading empire and market-maker the world has ever seen.  Trading gas and electricity, as Skilling had foreseen, was not impossible, even though it was very difficult.  And then coal ... and paper-and-pulp ... and base metals ... and financial derivatives on everything ...   A mere 18 months after inception, Enron Online was the world's largest B2B site, transacting some $2.5 billion a day, click-and-trade, across more different contracts than you could shake a stick at (approx 2,000).  In every large energy company you visited, you'd find at least of third of their trading books were with EOL: in the smaller ones, often more. 

By the end, everyone was an Enron wannabe.  David had taken on a score of global Goliaths, one after another, and felled them all.  Now, even China plans to open up its electricity markets - and Enron hasn't been on the scene for 17 years. Skilling's legacy is everywhere you look, and very tangible indeed.

Incidentally, he was "released to a halfway house" in August this year.  That's 12 years inside, albeit mostly in low-security.  Few people enjoy being locked up:  but as a rule, middle class people really don't enjoy it.