Hector Sants - Quarterbridge

In April this year the shiny new CMA (Competition and Markets Authority) emerged from a union of the former Office of Fair Trading and the Competition Commission. People are watching it closely: Initial shock revelations include someone has been price-fixing galvanised steel water tanks and online review websites are not trustworthy. Well there’s a surprise. Whether or not the CMA gets around to reviewing something worthwhile such as supermarket tactics to bankrupt independent retailing remains to be seen.

Review websites often ‘lose’ poor feedback in return for sponsorship

According to the CMA some 25 million shoppers use review websites such as Amazon and TripAdvisor to ‘inform’ their purchases but many of the reviews are rigged. Review websites often ‘lose’ poor feedback in return for sponsorship, whilst manufacturers offer rewards for favourable reviews and post criticism of competitors. None of this comes as a surprise to anyone over 8 years old but encourages genuine shoppers to post outrageous comments about some products. I recommend Amazon’s eye-wateringly funny review of ‘Veet for Men Hair Removal Gel Cream’ at www.amazon.co.uk/Veet-Men-Hair-Removal-Cream/dp/B000KKNQBK

Someone who does believe in frankness and honesty is the (Canadian) Governor of the Bank of England, Mark Carney

Someone who does believe in frankness and honesty is the (Canadian) Governor of the Bank of England, Mark Carney. Last month he gave a highly critical after-dinner speech to city bankers to coincide with publication of the ‘Fair and Effective Markets’ review by HM Treasury. His speech left the audience squirming uncomfortably on their well-padded behinds as they remembered how the (now disbanded) Financial Services Authority failed to reign them in prior to the financial crisis. Carney was not averse to a bit of self-criticism either, describing how the Bank of England allowed the crisis to develop. ‘The Bank’s contribution fell short…and neither identified the scale of risks in the system nor spotted gaps in the regulatory architecture’ he said. Arcane governance had blurred accountability and more would now be done to strengthen control. He added: ‘and that includes 10 years in Wormwood Scrubs for any of you guys with your hand in the till’ - or something like that. Former Governor of the Bank of England Mervyn King, former FSA boss Hector Sants and former Chancellor of the Exchequer Gordon Brown chose not to comment.

The Treasury review proposes extending criminal sanctions from investment bankers to foreign exchange traders

Chancellor George Osborne also spoke at the dinner. He publicly supported Carney with: ‘The public rightly asks: Why is it after so many scandals so few individuals face punishment in the courts? Individuals who fraudulently manipulate markets and commit financial crime should be treated like the criminals they are.’ The Treasury review proposes extending criminal sanctions from investment bankers to foreign exchange traders plus harsher penalties, something shareholders in RBS and Lloyds would doubtless like applied to reckless executives. City of London Lord Mayor, Alan Yarrow said upholding professional standards should be the norm. ‘It’s like a supermarket with no security cameras – if someone takes something without paying, it’s still theft. There is no escape. People should uphold professional standards irrespective of whether the regulators are there or not.’ Well, actions speak louder than words Alan. We’re waiting.

Pickles made few friends amongst local councils whilst spearheading local government spending cuts

Meanwhile, having won a clear majority in the general election the Prime Minister reshuffled his cabinet without needing to consult his coalition partners. Eric Pickles, plain-speaking head of the Department of Communities and Local Government was promoted to the House of Lords with a Knighthood and an ‘anti-corruption role’ which sounds a bit South American. To replace him David Cameron promoted Greg Clark (47) to become Secretary of State for Communities and Local Government. Described as a ‘soggy left’ Conservative from Middlesborough, the former Financial Secretary to the Treasury has a hard act to follow. Pickles made few friends amongst local councils whilst spearheading local government spending cuts and the 2011 Localism Act which gave community groups the right to take over council-provided services. His enthusiasm for the ‘Big Society’ agenda bolstered a reputation as a vocal critic of local government, particularly after the child sexual exploitation scandal in Rotherham and local governments’ ineffectual response to the 2014 floods. Greg Clark faces an equally tough time at the DCLG as he now has to implement a second round of even deeper cuts to reduce the governments spending deficit.

Canadian lobsters are now in the front line thanks to Smartphone technology

And finally: Another Canadian product has also been in the news – Lobsters. In the struggle to attract consumer spending Canadian lobsters are now in the front line thanks to Smartphone technology. Shoppers in Newfoundland can now use smartphones to scan live lobsters in fishmongers tanks to discover where their seafood is from and who caught it and when.

Tracing food back to source is not a new idea but using QR code tags to provide customers with this level of detail is

The traceable lobster program is part of thisfish.info, an initiative of Ecotrust Canada, an environmental charity. Each lobster caught by a participating member is tagged with a unique QR code which customers scan for information about the catch – when and where it was caught and by what method, plus a biography of the fisherman. Tracing food back to source is not a new idea but using QR code tags to provide customers with this level of detail is. Some Newfoundland restaurants have been serving QR-coded seafood for a couple of years and boosting sales by linking into wider consumer trends. A spokesperson said: ‘Customers love a glimpse into the lifestyle of the person who provided their supper that night. Where they live, how old they are and how long they’ve been fishing. Consumers are focusing more on where their food comes from, if it is sustainable and healthy and whether the people who catch it are paid fairly’.

No lobsters were available for comment.

Staying out of the Eurozone was the best decision the last government was ever forced to take – now that the Germans are tightening the screw. The UK can look on with more than a hint of smugness as hoteliers report a surge in demand for ‘Staycations’ from holidaymakers who can afford to buy a small Greek island for the price of a fortnight in St. Ives.

We’ve already loaned some £30 billion to the International Monetary Fund to prop-up the Euro.

What a pity then that well over half the UK’s exports are to the Eurozone. No spending there means no sales from here – so although we’re not in the Euro it’s in our interests to promote a solution rather than just sit back and watch the currency implode. We’ve already loaned some £30 billion to the International Monetary Fund to prop-up the Euro and we can’t expect the Americans to join-in. They aren’t that interested in reviving a protectionist trade zone but are interested in exporting to countries off their West coast. So everyone in the EU is now looking to Germany – the largest Euro economy by far – to finance a solution.

But they might not get quite what they want. During the latest round of crisis talks between the Germans and the French the German Chancellor arrived at Paris airport for emergency talks with the new French President. She stepped off the plane to be confronted by a French immigration officer:

‘Name?’ he asked.

‘Angela Merkel’ she replied.

‘Nationality?’ he asked.

‘German’ she replied.

‘Occupation?’ he asked.

‘No, just here for some talks…’ she replied.

Cash is king at the moment, and the Germans are in no hurry to part with theirs except on their terms. The Bundesbank will only guarantee a bail-out of Spanish, Italian and Greek banks if it can control how the bail-out is spent. Ms. Merkel can’t lend direct to foreign banks because of the German constitution but she can lend to sovereign governments. But Europeans with a long memory don’t like the thought of Germans telling their government what to do so lots of very clever lawyers are now devising ways to overcome the problem. One suggestion is that all bank debts are pooled in a fiscal union to spread the pain across the Eurozone, but that is just not going to happen. Hardworking German voters don’t see why their taxes should bail-out of a bunch of ClubMed party animals and neither do voters in smaller economies like the Netherlands and Finland. Agree to give away a quarter of your tax revenues to subsidise Spain? I think not.

London dominates the EU’s financial services sector with 60% of EU financial exports channelled via London.

At the same time David Cameron has been fighting off the idea of a Financial Transactions Tax to boost the EU coffers. This was proposed by Merkel and others but, unsurprisingly the PM says it is out of the question. The UK wants to see the EU get well again but not at the cost of reduced competitiveness against New York and Tokyo. London dominates the EU’s financial services sector with 60% of EU financial exports channelled via London which makes a massive contribution to our tax base. HM Government accordingly supports financial services just like the Germans support their automotive sector and the French their agriculture. The British counter-proposal of an EU-led invasion of Argentina has not attracted support.

Of course the UK could have stepped-in and doubled it’s support via the IMF if it hadn’t bailed-out the Royal Bank of Scotland with £45 billion of taxpayers money. That thought probably occurred to some MP’s who sit on the toothless-but-influential Treasury Select Committee. They were looking forward to giving Hector Sants – Chief Executive of the Financial Services Authority – a good gumming later this summer when he was due to appear before them, after which he would be confirmed as Chief Exec. of the shiny new Prudential Regulatory Authority – the FSA’s replacement. They might have heard Lord Mandelson explain how regulatory authorities like the FSA were outwitted and governments blackmailed by banks which dumped massive bank losses onto their sovereign balance sheets. The inquisition would have been worth watching but sadly Sants got wind of it, bottled-out and tendered his resignation instead.

But HM government is not heartless. At the same time as sorting the Eurocrisis our Dave found time to keep in touch with his greener, cuddlier side by re-stating the government’s commitment to reduce litter and landfill by a ‘bag tax’ on single-use plastic bags. 5p per bag is now the norm in Wales and will be Northern Ireland from April next year. Quite how this would apply to the Markets industry I haven’t got a clue but neither has the government. However the Scots government is now consulting on the idea – and about time too. Thanks to global warming more and more sea turtles are visiting our shores and the Marine Conservation Society has shown how a discarded plastic bag often looks just like a juicy jellyfish to a hungry turtle, before killing them. I don’t know about that because there aren’t many beaches in Oxfordshire, but anything which reduces litter on the A34 sounds good to me.

But would you believe it – the bean counters at HM Treasury have knocked it on the head. A spokesperson said something like: ‘After the granny tax, pasty tax and fuel tax fiasco we don’t seem to have an appetite for plastic bags.’ They might not, but turtles do. That’s just typical. They think it’s more important to look after the Germans than the turtles.