Not so long ago, Plan B was merely a rapper. His first record in those halcyon pre-Covid days? Who Needs Actions When You Got Words. Fine sentiments, too, at least when Boris Johnson’s words aren’t undone by a lockdown Christmas party at No 10.
The PM’s exhortations over the corona rules have become increasingly meaningless. Hence, perhaps, the need for more action: a rush into a different sort of Plan B, complete with fresh diktats over working from home and vaccine passports at big venues. Who knows yet? But given Omicron’s impact so far, you can see why business thinks the moves hasty. And not least when Pfizer’s just said a booster jab protects against the variant, with a 25-fold leap in antibodies.
Plan B pushed the pound to a fresh 2021 low against the dollar of $1.317 and prompted warnings from the Federation of Small Businesses that the rules would deliver a “body blow” to an already-struggling hospitality industry. A back of the fag packet calculation from the free marketeers at the Institute of Economic Affairs put the damage to the UK economy of fresh corona restrictions at £4 billion a month.
Yet, maybe business should have been more on the front foot, at least when it comes to vaccine passports. What is the big deal about them? In France, the pass sanitaire is required for restaurants, hotels and cinemas, plus travel on trains and planes and in many workplaces. The country hasn’t ground to a halt. And it’s provided the necessary incentive for some anti-vaxers to get the jab.
Yet over here, Michael Kill, boss of the Night Time Industries Association, was again complaining that passports would have a “devastating impact”. Yes, he claimed that trade was down 30 per cent in Scotland and 26 per cent in Wales since their introduction there.
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But wouldn’t it be better for businesses to be able to plan around passports and help normalise their use? Libertarians would hate it but it’s not as if the government doesn’t know their vaccination status anyway. Besides, variants aren’t going away. So why not have a plan for them, which business can buy into? Better that than kneejerk stuff from Boris, just as the heat’s turned up on the No 10 shindig.
Centrica heats up
Some chief executives don’t have much to beat. Take Chris O’Shea, the Centrica boss. His predecessor, Iain Conn, spent five years successfully piloting the shares from 280p to 42½p before bowing out just in time for Covid. So, it’s not the biggest challenge to produce more spark than him.
True, O’Shea can’t escape all the blame for the Conn reign, given he joined in November 2018 as finance chief. But, since taking charge of the British Gas owner in March 2020, he’s at least living up to one pledge: “To simplify a company that was unfocused and unnecessarily complicated.” Diplomacy prevents him from saying whose fault that was. But four months after taking over, he got out of North America, selling supply wing Direct Energy for a better-than-expected £2.85 billion. And, while his latest deal is no match for that, it adds clarity to his revamped Centrica investment case.
Finally, Centrica is getting shot of a big chunk of Spirit Energy, the oil and gas outfit it 69 per cent owns. True, it’s a messier deal than O’Shea would have wanted. Centrica is clearing £560 million from selling its Norwegian assets, plus the Statfjord field, to two buyers: Sval Energi and Equinor. But it’s got to keep Spirit’s UK and Dutch portfolio, mainly in gas. Still, the deal gets it out of 92 per cent of oil reserves, plus “material decommissioning costs”.
The market shrugged it off, with Centrica shares slipping 0.15 per cent to 67½p. But, bit by bit, a simpler beast is emerging. There’s still a question over its one-fifth stake in EDF’s eight operational UK nuclear plants, which O’Shea took off the block in July and calls “clean energy”. But otherwise there’s less to distract him from the core biz: “a UK and Ireland-focused group selling energy and related services to consumers and businesses”.
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Will anyone want to invest in that? Well, naturally, O’Shea reckons a group with customers in about one in three households will be crucial to the UK’s net zero plans. He says part of his role is to “make sure we get the right transition”, believing heat pumps “too intrusive and expensive” for 30 million homes. His target? 5 million, putting forward a hydrogen solution instead.
He’s also urging Ofgem to tighten the rules and capital requirements for energy suppliers after rocketing gas prices saw Centrica take on an extra 500,000 customers from seven of the 26 companies that went bust. Costs get shared by all consumers, with a new report from Citizens Advice putting the bill at £2.6 billion — before the £1.7 billion of taxpayer cash set aside for the collapse of Bulb. Still, one effect of that farrago? It’ll push more customers to the big guns like British Gas, home of 6.8 million retail customers. Another reason, then, that O’Shea’s efforts should prove less of a Conn-trick.
Dark Blue Prism
Game over for Blue Prism, always assuming no new bidder shows up. The buyout firm that kicked off the takeover battle, Vista Equity Partners, has missed its chance to raise its £12.50-a-share bid. The upshot? Hedge fund administrator SS&C looks set to carry off the tech outfit big in “robotic process automation” with its recommended offer at £12.75. The shares? Down 4 per cent to £12.60.
True, a £1.24 billion take-out for a company floated at 78p in 2016 is no disaster. But Blue Prism was the leading light in tech that automates repetitive tasks — before it got overtaken by better financed rivals, such as Nasdaq-listed UiPath. For the London market’s tech credibility, a shadow hangs over this deal.
alistair.osborne@thetimes.co.uk
