Encipia: The Mechanics of Business

June 17, 2020

Covid conundrum: interact, produce, consume, or infect

There are early signs to suggest that a coronavirus and a steam engine have enough in common to provide a useful perspective for our economic…

Maxwell’s Brexit: A case of intangible destruction

Maxwell’s Consumer: seeking a sustainable world

Maxwell’s Entrepreneur: finding the edge

Analysis: Amazon and the power of capital

Analysis: an Apple that just keeps on rising

‘Consumptivity’: the heartbeat of a modern economy

The Labour Theory of Value

Economies on the move – but to where?

April 28, 2017

Tracing the path of an energy dissipative UK economy

Today saw the publication of the latest GDP figures for the UK economy. It grew 0.3 per cent over the first quarter of 2017, according…

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Uncertainty over 12-week Covid jab interval
Experts have called for greater clarity about the monitoring in place to assess the 12-week dosing interval for Covid vaccines, as the UK’s vaccination programme ramps up. According to government data released on Sunday, a total of 6,353,321 people in the UK have received at least one dose of a Covid vaccine. A further slew of vaccination centres are due to open on Monday to speed up delivery of the jabs … However, there is continued controversy about the government’s decision to increase the interval between the two doses of the jabs to up to 12 weeks in an effort to offer protection to as many people as possible. While there is some evidence from trials that a 12-week gap does not reduce the efficacy of the Oxford/AstraZeneca vaccine, Pfizer has said it has no data on whether protection after the first dose is sustained beyond three weeks. The British Medical Association is among those voicing concerns, saying the gap between doses of the Pfizer/BioNTech jab should be reduced to six weeks. But others have defended the shift towards a longer interval, saying it is evidence-based and is the best option once the risks and benefits are weighed up. The Guardian, January 25

Gout drug colcichine could cut Covid hospital admissions by 25%
A study has raised hopes that a pill that costs less 30p and is commonly used to treat gout could reduce the risk of people who catch Covid-19 having to be admitted to hospital. A trial by Canadian researchers involving more than 4,000 subjects suggested that taking a daily dose of colchicine at home reduced the risk of hospital admission by 25 per cent in people with underlying health conditions. The scientists behind the study said the results were “clinically persuasive and should change clinical practice”. Other experts said that the results were encouraging but more details needed to be published to be sure of the drug’s effects. The Times, January 25

UK firms told ‘set up in EU to avoid disruption’
UK firms that export to the EU say they are being encouraged by the government to set up subsidiaries in the bloc to avoid disruption under new trade rules. Firms have been hit by extra charges, taxes and paperwork, leading some to stop exporting to the EU altogether. But several say they have been told that setting up hubs in Europe would minimise the disruption, even if it means moving investment out of the UK … The Cheshire Cheese Company said it had been advised by an official to set up in the EU after it had to stop its exports due to trade rules that came in on 1 January. The firm, which sold £180,000 of cheese to the EU last year, found that every £25-30 gift box of cheese it sends to consumers on the Continent now needs a veterinary-approved health certificate costing £180. “I spoke to someone at the Department for Environment, Food and Rural Affairs for advice. They told me setting up a fulfilment centre in the EU where we could pack the boxes was my only solution,” co-founder Simon Spurrell told the BBC. The firm, which had been optimistic about Brexit, is now looking at setting up a hub in France where it would “test the water”. But it has also scrapped plans to build a new £1m warehouse in Macclesfield employing 20-30 people. “Instead, we might end up employing French workers and paying tax to the EU,” Mr Spurrell said. “I left the EU as a UK citizen but now they are suggesting I rejoin my company to the EU, so what was Brexit for?” BBC news, January 24

Mastercard fees rise for UK purchases from EU
Mastercard will increase fees more than fivefold when a British shopper uses a debit or credit card to buy from an EU-based company, sparking alarm among companies that rely on online payments and concern among MPs over higher consumer prices. Mastercard and Visa levy an “interchange” fee on behalf of banks for every debit or credit card payment that uses their networks. The EU introduced a cap in 2015 after concerns the hidden fees were leading to hundreds of millions of euros in costs for companies and higher prices for consumers. But Mastercard has told merchants that the cap no longer applies to some transactions post-Brexit, because payments between the UK and European Economic Area are now deemed “inter-regional”. From October 15, Mastercard will charge 1.5 per cent of the transaction value for every online credit card payment from the UK to the EU, up from 0.3 per cent at the moment. For debit card payments, the fee will jump from 0.2 per cent to 1.15 per cent. The increase will benefit British banks and other card issuers, rather than Mastercard itself. Consumers will face higher costs if companies choose to pass on the fee, a further burden on purchasing products from EU-based companies. Financial Times, January 24

Empty lorries leave Britain as Brexit trade laws unnerve exporters
Up to half of all lorries bringing goods into Britain are returning to Europe empty as British companies put off resuming exports to the Continent to avoid getting caught by new customs regulations. The Road Haulage Association said that freight exports were still significantly down on expected levels nearly a month after the end of the transition period. They added that the lack of demand for freight capacity was making it harder for importers to find lorries willing to make the journey to England because trips were less lucrative than they had been in the past. “Most of the trucks that bring goods into the UK are not British and we’ve seen a noticeable reduction in hauliers wanting to make the journey,” said Richard Burnett, the chief executive. “There is not normal demand from exporters, which means around 40 per cent are returning to the Continent empty. The Times, January 25

UK risks being a failed state: Gordon Brown
The UK is at risk of becoming a failed state and breaking up unless there are deep reforms of the way the country is governed, the former prime minister Gordon Brown has said. “I believe the choice is now between a reformed state and a failed state,” Brown wrote in the Daily Telegraph. “It is indeed Scotland where dissatisfaction is so deep that it threatens the end of the United Kingdom.” Brown, who was chancellor of the exchequer for 10 years from 1997 and became prime minister in 2007, said many Britons were disillusioned with the way the country is governed by and in the interests of a London-centric elite. Speaking on BBC Radio 4’s Today programme on Monday morning, he accused Boris Johnson and his government of being out of touch. He said: “I do think Boris Johnson has not quite understood how deep the resentment is, how the lack of trust is causing him a problem, a problem about his acceptability in different parts of the country.” The Guardian, January 25

Scottish indy referendum has Johnson cowerin’
Nicola Sturgeon goaded Boris Johnson over Scottish independence as she accused the prime minister of being “frightened of democracy”. The SNP agreed an 11-point plan yesterday to try to force a second referendum on breaking up the UK. The party is polling at levels that would be likely to see them return a majority at the Scottish parliament elections in May and its leadership has been under pressure to come up with a plan if the prime minister continues to refuse to engage on the issue. Mr Johnson has said that it should be another 40 years before the Scottish constitutional question is revisited after it voted against becoming an independent country in 2014. The Times, January 25

Workplace trainers say government is keeping apprentices from full-time work
Workplace training providers in England have accused the government of preventing an estimated 62,000 apprentices from taking up full-time jobs by refusing to relax the rules for the maths and English tests needed to qualify. The Association of Employment and Learning Providers, the industry trade body, said the Department for Education has failed to act despite repeated warnings that restrictions imposed during pandemic were causing a logjam, with employers suffering skills shortages as a result. Apprentices are unable to sit their final tests because the government has refused to relax the policy that they should be examined at their place of work by external invigilators, who are prevented from attending because of coronavirus restrictions. “AELP has been lobbying the skills minister Gillian Keegan for months on this issue,” managing director Jane Hickie said. “She acknowledges there is an issue now but we still haven’t arrived at a solution. If we had been talking about GCSEs and A levels, action would have been taken.” Financial Times, January 25

China takes foreign investment top spot from US
China has overtaken the US as the world’s top destination for new foreign direct investment, according to UN figures released on Sunday. New investments into America from overseas companies fell by almost half last year, leading to the loss of its number one status. In contrast, UN figures show direct investment into Chinese firms climbed 4 per cent, putting it number one globally. The top ranking shows China’s growing influence on the world economic stage. China had $163bn (£119bn) in inflows last year, compared to $134bn attracted by the US, the United Nations Conference on Trade and Development said in its report. In 2019, the US received $251bn in new foreign direct investment while China received $140bn. While China may be number one for new foreign investment, the US still dominates when it comes to total foreign investments. This reflects the decades it has spent as the most attractive location for foreign businesses looking to expand overseas. BBC news, January 25

MPs handed ‘dossier’ on HSBC links
A parliamentary inquiry into HSBC’s relationship with Beijing will look at allegations that a Chinese executive was protected from accusations of sexual assault by his role as a senior Communist Party official. The allegations are part of a dossier compiled for the foreign affairs select committee before a hearing this week at which Noel Quinn, HSBC’s chief executive, and Colin Bell, its head of compliance, will be questioned about the bank’s freezing of the account of a Hong Kong pro-democracy activist. The bankers have been called to testify after HSBC locked the bank accounts of Ted Hui, a former politician who fled to Britain last month, and those of members of his family. The bank said that it was “required to comply with the law in every jurisdiction in which we operate”. According to The Sunday Telegraph, ministers are concerned that Chinese Communist Party members employed in senior roles at the bank could influence HSBC’s operations. The Times, January 25

Debenhams closes stores as Boohoo buys brand
Online retailer Boohoo has acquired Debenhams for £55m in a deal that will see the closure of the high street retailer’s remaining stores and thousands of job losses. Boohoo, which is also buying the brands Maine, Manataray, Principles and Faith, said the remaining stores will be wound down when they are in a position to reopen. The 242-year-old Debenhams chain is already in the process of closing down, after administrators failed to secure a rescue deal for the business and its remaining 118 stores and 12,000 staff. The company announced recently that six shops would not reopen after lockdown, including its flagship department store on London’s Oxford Street. “The group will only be acquiring the brands and associated intellectual property rights,” said Boohoo. “The transaction does not include Debenhams’ retail stores, stock or any financial services.” The Guardian, January 25

Barclaycard increases minimum payments
Some Barclaycard customers will see their minimum repayments rise from Tuesday, at a time when finances are already stretched owing to Covid and Christmas. The new requirements are tailored to each customer, although some may see a significant rise in demands. But the changes will also see charges for exceeding a credit limit scrapped. January is a pinch point for many in debt and borrowers are being urged to seek help if they are in trouble. Barclaycard signalled the changes to their pricing structures in November, although some borrowers may have missed the notice, which was titled “changes to your terms and conditions”. The new repayment rates will affect Platinum, Initial, Freedom, Forward, Cashback, Littlewoods, Rewards and Hilton Honors cards, but not Premier or Woolwich cards. BBC news, January 25

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