Neil Collins’ Notebook – Dear Mr Happy: please don’t come back

You will be glad to hear that George Osborne has never been happier. We know this because he granted a long interview to The Times last week, with a photocall daringly shot in jeans, talking about how he had just put the London Evening Standard “to bed”, and from Somerset, too! If we are really lucky, he hinted, he might even return to politics. After all, he’s only 49.

Many of us would argue that he has caused quite enough trouble from the policies he inflicted on us last time, as chancellor in the six years to 2016, the real price of which is only now becoming apparent. Top of the list must surely come Help to Buy, which is now better known as Help to Buy Builders’ Yachts. The recession did for the small housebuilder, and the half dozen which now control the industry raised their prices and effectively doubled their margins with every house sold under the scheme.

A damning report from the Public Accounts Committee last September echoed an earlier conclusion from the National Audit Office that the scheme had failed to make housing any more affordable. Worse, many buyers did not understand that a penalty interest rate kicks in after five years of ownership. Both flaws were pretty obvious at the time, and as with all such handouts, it has proved politically impossible to stop this expensive, useless scheme. The current plan is to wind it back (a bit) next year.

Next on the list is Mr Osborne’s pension reforms. This was another crowd-pleaser, allowing people access to their savings at 55, with no obligation to buy an annuity. The predictable gold rush from financial advisers saw £7bn withdrawn from company schemes, some of which was spent or lost in investment scams. The OECD was only one of the organisations that warned of the baleful long-term consequences.

Once again, the real cost of the policy will only become apparent as more people run out of money in their old age. As a side order, Mr Osborne added further complexity to the rules on pension savings, to the point that today even the experts find it hard to navigate the minefield of regulations. The recent U-turn by HMRC over the transfer of non-cash assets into pension plans elegantly demonstrates the mess he made.

Then there is, or was, Mr Osborne’s famous “northern powerhouse”. This fine idea would revitalise the north of England, which we noticed starts quite near Mr Osborne’s former Tatton constituency. Five years on, there is little to show for it, as he himself recently acknowledged. The chargesheet has to include HS2. He knew that the £25bn projected cost for the first phase was a fantasy when he was chancellor, but somehow neglected to tell parliament that when it was being debated.

Finally, let us not forget Project Fear, the officially-backed forecasts of depression, fire and pestilence if we had the temerity to vote leave. This seemed like gratuitous scaremongering at the time, and it is at least arguable that the dire warnings had the opposite effect on the electorate to that intended.

So, Mr Osborne, we’re happy that you’re happy, with your new girlfriend, your newspaper “editing”, teaching Stanford students, or any of the other nine roles you have accumulated since leaving parliament in 2017. But please, don’t come back.

Crossed wires

Clients of Mirabaud Securities get frequent treats from Neil Campling, the firm’s technology whizz. Much of the research is hard going for non-technocrats, but his work on Wirecard is in a different class. His forensic analyses, the latest of which landed this week,  invariably reach the same recommendation: sell.

Campling is not popular with Wirecard fans. Germany’s leading tech company and a constituent of Germany’s DAX index, it is still valued at over €11bn, despite the shares halving from their pre-Campling peak. Described as “a provider of software solutions to the financial services industry”, what it actually does is a mystery to outsiders, but what really infuriates the fans is Campling’s irritating habit of carefully reading the company’s published documents, the latest of which reveals yet another delay to the publication of the annual report.

After his earlier criticism and a forensic examination by the Financial Times, Wirecard commissioned a report from KPMG which a month ago was eventually published, up to a point. Under a note entitled “The dog ate my homework”, Campling commented: “Information was withheld from KPMG, access to key contacts were postponed, documents and access to IT system not possible and authenticity of documents, as nearly all electronic, couldn’t be verified”.

A fortnight later, Wirecard issued a trading update, prompting another note, this one entitled “The COVID-19 miracle”. All the biggest players have taken a hit in their FinTech business, “but there is one company which stands tall, stands strong and is confidently reiterating guidance. Can you guess which one?”

The following week it emerged that a decision to wind up what had been a key subsidiary was taken by the board in February, prompting a major shareholder to call for an end to the “whitewash“, and Mr Campling to launch the Wirecard weekly. “With so much going on we have put together some of our notes from Wirecard this week into a separate document; which can form one chapter in our ever expanding book of work on the company (which now stretches to 200 pages).” It is unlikely that he will find a German publisher.