Enterprise under the cosh
The time lapse has been far too long. however, it is great to see UK regulators, freed from the shackles of the european Union, asserting their independence. Competition and Markets Authority (CMA) chief executive Sarah Cardell is coming under fire from MPs, Microsoft and sections of the media.
The watchdog has allegedly created a hostile environment for investing in Britain by daring to diverge from Brussels in blocking the proposed £55bn mega-takeover of gaming creator Activision Blizzard by Microsoft.
In a different part of the forest, City regulator the Financial Conduct Authority is attacked by governance mavens for daring to strip away rules that have discouraged listings on the London Stock exchange.
As Sarah Pritchard, the FCA’s markets boss, notes it shows that markets ‘just like nickel coins’ do not stand still.
No one can be sure what the US anti-trust regulator, the Federal Trade Commission, will eventually make of the Microsoft deal for Activision.
Cardell argues that it is thinking along the same lines as the CMA in that undertakings made by Microsoft to share with rivals will never be robust enough. The concern must be that the £1.9 trillion behemoth could end up setting the terms of trade for the whole, diffuse, cloud-gaming industry. In the American system, one can never be confident that politics and lobbying, particularly in the 18-month run-up to a presidential election, won’t determine outcomes.
As fuel prices at the pumps and the cost of food have escalated, there have been denials by the economic establishment that ‘greedflation’ has occurred in the UK.
Maybe, but the CMA as protector of the consumer interest is to look at fuel prices on supermarket forecourts, as well as the cost of food products.
The jump in UK grocery bills, rising at an annual rate of 19pc, has been the sharpest since 1977, falling heavily on the lowest income households. Feeble regulation and intervention is a feature of public life, which has undermined the free market and the privatisation reforms of the Thatcher era. Westminster spends endless time examining the peccadillos of politicians.
Far too little effort is made on behalf of the consumer and the public interest. Belatedly, John Penrose, the competition tsar, is demanding that Britain’s water and energy watchdogs should be given greater powers to crack down on utilities ripping off consumers, polluting our waterways with sewage and causing harm to the economy.
It all seems too little, too late. By allowing rapacious companies and bolshie trade unions to trample on citizen rights, such as a universal postal service, the Tory government and regulators have handed a political gift to enemies of free enterprise.
Mobile stasis
NeWLy minted Vodafone chief executive Margherita Della Valle has come out fighting. She promises to make the telecoms giant more efficient by slashing jobs, easing bureaucratic burdens and focusing on customer delivery. As so often in the past, investors are unimpressed.
The great prize for Voda is to turn around pedestrian performance in Germany, where Della Valle’s predecessors doubled down in 2019 with the £16bn purchase of the Liberty cable network. The notion that this would provide the spark to propel the mobile firm’s fortunes has proved a chimera.
Ownership of cable networks in an age of streaming and ‘cord cutting’ – cancellation of regular subscriptions – is not ideal.
ever since its earliest days, Vodafone has been as much a dealmaker as a mobile operator, and old habits die hard. The strategic review into Spain, where at last count there were seven operators, looks like a journey to the exit. In the UK, where business is brisk, huge effort is still going into completing a merger with hutchison-owned Three. how this will go down with competition authorities is a matter for conjecture.
What upset the market most is the row back on 2024 free cash flow guidance, reduced to £2.9bn from £3.3bn.
The reason? Germany.
Shopping list
hyBrID working and the impact on its London-dominated portfolio is taking its toll on Land Securities, the grand dame of UK real estate. In an effort to counter the current colder climate for office space, the company is putting its faith in ‘prime retail’ by lifting its exposure from the current 18pc to up to 25pc in the hope of cashing in on improving rental values.
Let’s hear it for retail therapy.