I am happy to announce that there are some changes in the Redberry world, particularly the appointment of a new partner. Hugh Forde has joined the team and brings with him a wealth of commercial and charity sector experience. Hugh and I worked closely together at Age UK, and I am delighted to be working with him again!
We are developing our commercial and charity sector offerings and will be updating the website in the near future, so “watch this space”…
Great to experience FOI first hand…
Anyway, a response from HM Treasury. To date the FCA has levied £426m in fines relating to the manipulation of LIBOR. The fines are paid over to HM Treasury. Apparently in October 2012, the Chancellor announced that the money raised would go to “people and causes that demonstrate the best of British values” such as charities supporting the armed forces. So far, £290m has been allocated:
- £35m to armed forces charities;
- £5m to refurbish WW1 exhibits at the Imperial War Museum; and
- £10m pa for 25 years from 2015 to “military charities”.
All very good. However, this does raise some further questions:
- What about the £136m not allocated so far?
- What about the cash benefit of £426m less £40m assumed already paid out on the first two bullets? It would appear that the Treasury is sitting on a significant cash windfall…
- And perhaps the biggest question of all – “why are the fines so much less than those levied across the Atlantic?”
Potentially much more to follow on this subject.
The extent of previous fines and those recently levied by European banking regulators for irregular setting of LIBOR, Euribor, foreign exchange rates and the like (all of which appear to be on the relative low side compared to stateside regulators but that’s a whole different issue in itself) has got me thinking… Leaving aside issues of trust and business ethics, which sit close to, if not at the heart of, most retail businesses, I wonder where and how the fines are being utilised. Cue internet research and a probable Freedom of Information request to HM Treasury. Update to follow…
Congratulations to The School of Life on the launch of their first collection of Virtue Dolls or figurines, designed to remind us of our better nature. Each of these Virtue Dolls, inspired by traditional Japanese dolls, embodies an exemplary virtue: Calm, Bravery, Kindness. The School of Life has collaborated with Momiji, who are known for their ‘message dolls’. Inside each one there’s a small folded card for your own handwritten message, dream or wish. You use them as follows – “place the little figures before you on the desk or shelf, and when you catch sight of them during stray moments of the day, allow their a subtle and beguiling power to remind you of your true aspirations.” The dolls are available to pre-order here.
Congratulations to The School of Life on the launch of their Tools for Thinking range of retail merchandise – a range of notebooks, pencils and cards. According to the School, the idea is to “Change and enhance your mood through art. Our best moods are often hard to get in touch with. At The School of Life, we believe that great works of art can put us back in touch with our better selves.”
The description for the “mood” series of notebooks goes further:
“So we’ve created some Mood notebooks lavishly illustrated with paintings across their inside covers. Each book contains one painting ideally suited to provoking a particular valuable mood and a caption highlighting its therapeutic potential. The mood of this notebook is ‘Productive’. It is hard-backed with beautiful exposed binding detail. The inside covers reveal a vivid image of ‘Superfluous Market’ by Kathrine Campell Pederson. Each page has space to fill with your ideas and thoughts, as well as titles to record the date, time and your frame of mind.
“Daring” and “Sceptical” are other moods currently in the line up. Check out the full range here.
Today sees the launch of a new app that turns abandoned shopping trollies into trees.
Members of the public can now use the Trolleywise app to take a photo of wayward shopping trollies. The app uses the phone location to identify the whereabouts of the trolley and this information is passed to a team of vans and drivers for collection within 24 hours. In return, a tree is planted for every trolley recycled.
Supported by Trees for Cities and the River and Canal trust, the app is expected to help reduce the waste created by the 400,000 trollies that go missing every year out of the two million that are in circulation.
Trolleywise hope that the app will replace the current system in which local authorities have to collect the trollies and charge the finder’s fee back to the supermarket often through fines. Users don’t get any financial reward but do get the satisfaction of helping the environment via the tree planting “reward”. The app also logs your stats so you can potentially see if you are the top “spotter” in your area.
Websites that link borrowers and lenders directly are on the brink of hitting £500 million in loans in Britain — and the industry’s leaders believe that they pose an increasing challenge to the big high street banks according to an article in The Times.
Peer to peer lending, where a “platform” links savers and borrowers, appears to be on the up with even Google apparently dipping its toe in the water. There seem to be several attractions for the peer to peer lending model. For savers, there is the potential to achieve a much higher rate of return. Perhaps just as important, savers also get a sense of “investing” directly into the market of loans to individuals or small businesses – much more engaging than deposits with a faceless bank. For borrowers, the attraction appears to be relatively easier access to loan finance at competitive rates. Within the mix, the platform takes a cut.
However, this emerging market is struggling to get the regulatory frameworks in place that would put it on a similar footing with other investment markets, which seems a shame. Anything that poses a challenge to the existing model of bank provided finance should be welcomed. Equally, providing an alternative investment route for cash deposits, linking investment directly into smaller businesses and start ups could be a significant channel for growth in the real economy as opposed to government backed finance schemes that appear to benefit the banks more than the wider economy.
So, I do hope that the regulators and the “powers that be” provide appropriate and sensible support rather than raise barriers or drag their collective feet.
The chief exec of clothing and homewares retailer Next, Lord Wolfson, has donated a sizeable chunk of his bonus to his staff. The decision was widely reported and PIRC commended the act as a massive recognition of the contribution of employees to the financial success of the business. Hear hear!
It is refreshing to observe such an act, made all the more significant by its unilateral nature. Listening in on Radio 4’s Today program on the day of the announcement, the market reporter’s commentary appeared somewhat dismissive as if the whole thing was some kind of PR stunt or a moment of madness unlikely to be repeated by other CEOs.
Many chief execs have waived their bonus entitlements during the course of the recession -although many would say such actions were generally only in response to external pressure, which in turn has only intensified a sense of corporate greed and selfishness that many would say still exist and the root cause of the financial meltdown.
But Lord Wolfson’s action to share his bonus (justly earned by all accounts) comes across as a welcome example of giving credit where it’s due. Bankers take note!
The Forum of Private Business (who they?) recently accused furniture and fashion retailer, Laura Ashley, of a “supplier squeeze”. BBC News reported the story, having seen a copy of the letter that sets out an immediate 10% cost price reduction. Clearly the FPB sees this as another installment along the well trodden path of “nasty retailer” bullying and exploiting “hapless” suppliers – a classic “big” vs “small” battle.
Whilst the implementation may be overly brutish, the annual negotiation of supplier terms is a classic full blooded commercial negotiation. Large retailers clearly have buying power through volume, but my experience is that the suppliers themselves are generally just as commercial. I can’t recall an instance where a supplier offered a reduction in their terms because they were suddenly much more profitable and wanted to share that gain back up the supply chain. Before embarking on the negotiation, retailers always review the available published accounts of their suppliers.
The FBP clearly takes the stance of the “put upon” supplier that has no alternative customer / outlet and is therefore at the mercy of the nasty retailer. Any business that relies on one key customer must surely recognise the inherent commercial risk in such a position and take appropriate action to mitigate (or accept) that risk. Equally, the de-listing threat is at times overplayed, as no retailer wants to deal with empty shelves or significant gaps within ranges – especially where continuity of supply and providing a coherent and comprehensive customer offer is core to the proposition.
Even JLP was tarred with the FPB brush although further reading indicated that JLP was implementing a sliding scale of rebate based on an increase in volume. I am sure many businesses would be happy to trade 5 percentage points of margin to deliver a 50% volume increase. How many marketing campaigns can claim to deliver a similar ROI?
So the reality is generally much more finely balanced than typically reported.
Everyone ready for Real Time Reporting? New rules from April will see real-time PAYE reporting rolled out in the UK. The change means that information must be reported to HMRC as employees are paid, rather than the current system of monthly and annual filing. HMRC claims reporting in real time will great benefits… Odd that I haven’t seen much comment from businesses about those benefits (payroll firms selling updates have clearly done well), but I have seen much commentary on the increased burden of administration.
Good news then, that the implementation date for small companies with less than 50 employees has been put back by 6 months. The ‘easement’ will be in place until 5 October 2013 in order allow smaller employers to catch up, particularly if the employers pay their employees weekly, or more frequently, but only process their payroll monthly. HMRC said it will “continue to work with employer representatives during the summer to assess and understand the impact of RTI on the smallest businesses” and “consider whether they can make improvements to real time reporting which will address their concerns without compromising the benefits of RTI”, which sounds suspiciously like “let’s see how bigger business cope first and hope no one is interested in 6 months time.”
Let’s hope that the change does go smoothly, although previous experience (CIS scheme, anyone?) and current commentary suggests not. Snap polls suggest the business world is potentially under prepared – an Accountancy Age poll (50 respondents) reported 84% felt “underprepared”, and I have seen similar survey results elsewhere. Perhaps HMRC need to resort to a bit of “Hector-ing” to get its message across.