Credit, Cabs and Cakes

By Richard Pickering, Head of Futures Strategy

May in Florence  Six months into the Brexit process and with few tangible results, May’s role in Florence was one of good cop, tasked with unblocking the path ahead. What did she achieve? Firstly, we now have a degree of clarity over the transition arrangements. We will remain on substantially the same terms with the EU for a period of two years following the end of the notice (until March 2021). Secondly, during this period, the UK will ‘honour commitments made’ to the EU budget. These have been estimated at c. £20bn – about half way between the £50bn allegedly sought by the EU and our current offer of zero. Thirdly, the UK will commit to maintain the rights of EU citizens currently living here. These appear to be practical moves, designed to calm markets without alienating Brexit supporters. However, where we are still none the wiser is on the subject of our future relationship. May doesn’t like either of the proffered options, and instead calls for greater creativity. As the baton passes back to David Davis, with our hand having been played, the pressure will mount for some definitive solutions.

Uber und out  The impact of new technology on our planet and on our industry is a preoccupation of mine. I have a strong conviction about the inevitability in particular of platform business models, and their ability to reshape long established norms. With massive reductions in the cost of key technologies, and no shortage of venture capital to channel them into commercial ventures, innovation and funding are not the principal barriers to adoption. However, regulation is. What we see with Uber this week is a failure of appropriate regulation and governance to keep up with the pace of technological change. At the point of writing, 800,000 people have signed the petition against the decision not to renew their operator licence. For the sake of consumer choice, I hope that Uber (and potentially new entrants) ultimately succeed. However, along the way, we will also hopefully see stricter controls and increased competition. If the UK really sets out its stall to lead the world in new technologies, an important aspect of this will be leading the design of regulatory frameworks that draw an appropriate balance between progress and protections.

Life and death  Improvements in later life healthcare are leading to an increase in the median age at death in most countries across the world. In the UK this has increased by 10 years (from 78 to 88) since just 1960, and the rise is set to continue. Of course, the longer that one lives, the more likely it is that one will succumb to various illnesses and need patching up. With diseases like cancer become increasingly treatable, and faced with chronic funding challenges in the NHS, the case for a boom in private healthcare facilities appears to be a strong one. Less discussed is what happens when we do finally pass over. Being brutal about it, urban cemeteries are an inefficient use of land that is not sustainable. A report in the Nikkei Asian Review this week cites a 30% rise in ‘indoor cemeteries’ (housing urns) in Japan in the past decade. Whilst cultural and religious differences will lead to differing rates of adoption, this, like taxes, is still a certainty (…for now).

Let them eat cake  Following Theresa May’s conciliatory Florentine speech, Donald Tusk rose to remark that Britain’s plan of ‘having a cake and eating it’ is over. And how right he is. Serving up a slice of shrinkflation, McVities has this week decided to carve up its packs of Jaffa Cakes, reducing their contents from 12 to just 10. Now too petit for some customers, the shortening of a pack of Britain’s favourite orange and chocolate treats has caused hundred and perhaps thousands to get hot and cross about the situation. Various waffle on Twitter compares the loss of the two Jaffas with nuclear bombs and tornados. This might seem a little rum, but consider how cakes are baked into the heart of our culture and laws. In the UK, Jaffa ‘cakes’ are classed as such due to having a moisture content greater than 12%, and can hence sponge off the Treasury as a zero-rated supply. A gingerbread man benefits similarly, but only if it has no more than two chocolate spots for eyes, which in my view is really taking the biscuit.


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