You Can’t Replace Striking Staff

The High Court has ruled that allowing agency staff to replace striking workers is unlawful. This is yet another example of legal challenges to decisions by Government.

The High Court has ruled that Government legislation introduced last year which said employers can use agency staff to fill in for striking workers during industrial action is unlawful. The Government decision was challenged by a judicial review from a number of trade unions. So we now have a situation where doctors or nurses, that are required to keep patients alive, but who have gone on strike cannot be replaced. Likewise for other essential workers such as railway staff.

The challenge was based on lack of public consultation, but this is surely madness. I hope the Government attacks this little publicised decision. Workers may have a moral right to withdraw their labour but employers should also have a right to replace them when it is essential to maintain a public service.

See: for more details of the legal decision.

Roger Lawson (Twitter:  )

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Should Directors Get Index Linked Pay Rises?

Today I received notification of a General Meeting of Gresham House Energy Storage Fund (GRID). They are wanting to amend the previously agreed Remuneration Policy to give the directors an annual pay increase in line with the UK Consumer Price Index.

Is that reasonable? I don’t think so.

If everyone claimed such an increase then it would drive inflation higher as a matter of routine. The directors of this company should face up to the reality that we are all poorer as the result of high energy and other product prices from the war in Ukraine. They should not be protected against inflation as nobody else is.

In addition the wording of the resolution only refers to an “increase” but what if there is a general fall in prices. Are the directors going to take a pay cut?

This resolution is badly worded and is wrong in principle so I have voted against it. There may be some justification for reviewing the remuneration rate if inflation is high but it should be based on market circumstances not justification, and not be automatic.

But I had to vote via post because the on-line voting system did not recognise the Control Number.

Roger Lawson (Twitter:  )

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Shell AGM Disrupted

I am watching the Shell AGM and it has been disrupted by a campaign group chanting “Welcome to Hell” that has gone on for more than 15 minutes now.

Chairman Sir Andrew McKenzie has not taken vigorous action to stop the disruption. He should have ejected the objectors or suspended the meeting until order was resumed.

As a shareholder in Shell I consider this attempt to defeat the purpose of the meeting is an absolute disgrace.

As at the BP AGM, the Chairman was totally ineffective in controlling the mob.

Postscript: after 3 hours I am still watching the AGM. It has become more civilised after an attempt by some attendees to storm the top table. The CEO, Wael Sawan, made a good speech which covered the company’s decarbonisation programme. The target is net zero emissions by 2050. The plan is a balanced energy transition. He said that cutting supply while demand is unchanged does not work.

Based on the proxy vote counts, 80% of shareholders voted against Resolution 26 (the one requisitioned by protestors) while 80% supported the boards resolution (no.  25). That’s a quite decisive support of the company’s strategy.

There were some intelligent questions in the Q&A session and a few complaints about the timing and venue.

How to make these meetings shorter and avoid disruption by a vociferous minority? Could I suggest: more vetting of attendees or just make it an on-line only meeting. A more vigorous role by the Chairman would also help.

Roger Lawson (Twitter:  )

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BP Agm Badly Managed and Disrupted By Protestors

I have been watching the BP (BP.) Annual General Meeting on-line. This was badly disrupted by protestors and the Chairman (Helge Lund) did a very poor job of restoring order. He had to ask for order several times and over 10 minutes in total were wasted before Lund requested removal of the protestors. Much too soft!

BP already supports a transition to net zero carbon which I consider misconceived. How many votes against Lund will he get? We shall soon see.

Note: I am a shareholder in BP.

Postscript: Helge Lund received 9.6% of shares voted against his re-election. Whether that was because of his weak approach to meeting management or dislike about the company’s strategy is unclear.

Requisitioned Special Resolution 25 was voted down by 83% which shows there is little support among shareholders for extreme policies.

Roger Lawson (Twitter:  )

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Politics and Technology Problems

It’s been a while since I wrote a blog post. Too busy sorting out some technical problems and keeping up with medical issues – I just booked my seventh Covid vaccination which does not scare me. But I would like to comment on some topical issues.

Should Dominic Raab have been fired, or encouraged to resign, which is the same thing in reality? There is one simple question to answer which is “would you like to work for him as a boss?”. My answer would be an undoubted “no”.

Leaders who wish to get things done need to be popular to some extent at least if they wish to have people work hard and follow the policies laid down. You certainly can’t get people to do what you want by bullying them.

Raab was apparently warned several times about his behaviour so the final outcome was hardly unexpected. In any organisation, and Government is no different, you have to have consensus and leadership by example. If Raab could not get Civil Service staff to do what he wanted then he needed to change his approach.

My first technical problem was that BT and Microsoft decided to stop supporting POP email clients, for alleged security reasons after 20 years. That meant potentially losing access to thousands of older emails I have received over the last 15 years. No workarounds provided unless I paid them money. I am very unhappy about being treated in this way and Outlook on the web is not nearly as good as Outlook 2016 as a local client.

My latest technical problem was configuring and learning how to use a new Samsung smartwatch (a Galaxy 4). This is replacing an older Huawei smartwatch which did basic functions very well but was not really compatible with the Apple i-Phone I currently use. I don’t like Apple watches – too expensive and I prefer a more traditional design. The Galaxy watch is also incompatible but you have to read the very small print on their web site to discover that. You even need a Samsung phone to set it up which is ridiculous. The user interface is horribly complex and it’s taken me hours to learn all the functions and configure it. Watches should be installable in a few minutes, not hours, and all common phones should be supported.

That’s the rant over for today.

I was alerted by the new emergency phone alarm just now. I presume that’s in case Russia launches World War 3, and we get 3 minutes warning of a nuclear attack. Reminds me of the 1960s but most people decided then that there was not much to do in 3 minutes except hide under a table.

Meanwhile Sadiq Khan is pushing ahead with the ULEZ expansion despite widespread public opposition. Financially it makes no sense and it will make no difference to air quality in the outer London boroughs. There will be a legal challenge in the High Court in July but I am not very hopeful of a successful outcome. But it’s worth supporting anyway.

The only way you can remove idiots like Sadiq Kahn is at the ballot box.

Roger Lawson

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New Roliscon Web Site

The Roliscon company is one used to promote the books I have written and the web site ( ) also contains all the consultation responses I have written over the last few years, a link to my blog and other material.

The web site has been redeveloped in Wix so is now more user-friendly on mobile devices. Take a look at the new web site if you have never visited it before.

This work was done by Barker Online Marketing (see ) who I can highly recommend if you need some web site development work done.

Roger Lawson (Twitter: )

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Digital IDs – Do We Need Them?

The Government is consulting on the creation of a centralised digital ID gateway to online public services. The idea is that people will only have to provide the details needed to, for example, renew their passport, once. From then on all the public authorities they deal with will know who they are because the data initially submitted will be visible to all of them.

But there is a very long list of public bodies who will be able to share the data. The long list of public bodies that will have access to personal information can be found at the end of the consultation documents under Annex 4. It includes HM Revenue and Customs, the Land Registry, the Disclosure and Barring Service, the Home Office, departments for Work and Pensions, Justice, Education, Levelling Up, all Councils and the major regional authorities.

Potentially enormous numbers of people will have access to the information which is surely a potential security risk.

This consultation closes on the 1st March so you need to respond quickly if you have an interest in this matter. Click on the link below for more information and to respond.

Government consultation:

Comment: The creation of digital IDs for all UK citizens has many advantages and if properly done might actually improve security. But the proposed legislation appears to enable data sharing much too widely and without adequate protections.

Roger Lawson (Twitter: )

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VCT Investor Workshop

Today I attended a VCT Investor Workshop on-line run by the British Smaller Companies VCTs (BSV and BSC). These are two of the better performing generalist VCTs managed by YFM. It was a disappointing event.

There were presentations from investee companies Unbiased and SharpCloud which gave a general overview of the businesses but no financial information – such as sales, profits and what the VCT’s valuation is based upon. In other words, the key information about a business that any investor needs.

As I got the impression from other VCT managers that a year or two back the valuations of new deals were rising to levels that might reduce future returns I asked this simple question: “Are you paying less for new investments as I get the impression the market had become over-heated?”

The question was not answered. In fact few questions were answered, perhaps because the time allotted was minimal – perhaps 10 minutes which turned into 5 minutes in reality as other sessions overran.

I really don’t see the point of running events when not enough time is allowed for questions and key issues are ignored.

Roger Lawson (Twitter:  )

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Saving Tax and Protecting Income from Inflation

To follow on from my comments on the Chancellor’s Statement and the changes to dividend and capital gains tax, it emphasises the importance of minimising tax liabilities.

It is important for both income and capital gains to hold your shares in ISAs or SIPPs which makes them both tax free. If you have maximised your holdings in ISAs and SIPPs then if you want tax free dividends one option to look at is Venture Capital Trusts where dividends are tax free and you also get tax relief on investment in new shares. Or you can simply buy them in the market where you won’t get the initial tax relief but will avoid the prompt decline in your investment value as they normally trade at a significant discount to NAV – currently between 5% and 12% for generalist VCTs.

The dividend yields on VCTs are also typically quite high mainly because they tend to only maintain capital values while converting capital profits into dividends. The AIC web site can provide a summary of all VCTs, their dividends and past price performance.

VCTs have not been performing well of late as their focus on unlisted and AIM shares in small companies which are out of market favour has damaged their share price performance after a period of excess exuberance particularly in technology company shares. But now valuations in small companies have become more reasonable so it might be time to consider more investment in VCTs.

Investing in ISA and SIPPs do not of course give you cash dividends to spend but you can put money into ISAs and then take out the cash accrued from dividends tax free, except for Lifetime ISAs.

From my past investment in VCTs I now have a substantial proportion of my income tax free. But VCTs and their taxation are complex subjects so make sure you understand them and/or take professional advice on them. My comments above are based on my understanding of the position but I do not guarantee that it is correct.

As regards minimising capital gains tax one solution is simply to not sell holdings that are showing a profit, or offset them with sales of holdings showing a loss.

Inflation protection

The other big issue raised by the Chancellor’s statement was how to protect a portfolio from the ravages of inflation. A half-year report from Value and Indexed Property Income Trust (VIP) this morning shows how they are providing that. For example they say: “VIP’s dividend per share has risen every year since 1986 when OLIM’s management began. It has risen by 932% over the 36 years, against the Retail Price Index rise of 232%. The medium term dividend policy is for increases at least in line with inflation, underpinned by VIP’s index-related property income.”

The net asset value per share fell during the half year but this is explained by these comments: “….rising bond yields and slower rental growth force property valuation yields up and capital values down. All sectors will be affected, with offices declining further, retail giving back its recent gains and the industrial sector suffering worst in the short term as it had become the most overheated. With consumer confidence at an historic low, and mortgage rates rising rapidly, stagflation may be here to stay, for at least as long as the war in Ukraine lasts.

Property transaction volumes have slowed down markedly since the summer, especially in the previously strongest sectors such as industrials and retail warehousing, with many sales only going through after agreed prices have been “chipped” by buyers and many more properties having to be withdrawn from the market unsold. Buyers now are few and far between as they wait to see how far yields move out. Property unit trusts have become forced sellers to meet withdrawals, proving yet again that open-ended vehicles are the wrong way to invest in property. Some pension funds will also need to sell after they were caught short of cash to meet margin calls on their dangerous LDI (Liability Driven Investing) schemes.

Land Securities has just sold a prime long-let London office at 9% below its March valuation, while the market for older or secondary offices has fallen off a cliff, with some now virtually unlettable and unsaleable where they do not meet environmental standards. The deep “brown discount” for properties in all sectors with non-compliant Energy Performance Certificates (EPCs) is the clearest evidence so far of the growing market impact of ESG. Two-thirds of car showrooms, for example, are currently estimated to have non-compliant EPCs.”

Property REITs are another sector out of favour at present for those reasons but longer term I would expect them to provide some protection against inflation.

Roger Lawson (Twitter:  )

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Chancellor’s Autumn Statement

This morning Jeremy Hunt delivered his Autumn Statement. As expected taxes are up and Government spending is down, but exactly where the latter cuts, which are estimated to be £30 billion, will fall is not clear. That is particularly so as the NHS and Social Care are getting £8 billion more and schools £2.3 billion more.

Infrastructure spending remains also with Sizewell C nuclear power station going ahead and HS2 to Manchester plus other rail projects. Comment: a great pity that HS2 has not been canned which would save many billions of pounds.

As a retired taxpayer with significant dividend income and capital gains in some years (not this one I hasten to add), the tax increases are not as bad as they might have been. The pensioners “triple-lock” remains in place when my feeling is it should not have been retained, while with a lot of our assets in ISAs and SIPPs the damage won’t be too bad.

There is also continued support worth £26 billion for energy bills with £300 going to pensioners and the energy price guarantee will be extended past April 2023.

The big personal tax increases will come from a reduction in the threshold for the higher rate of 45p to £125,140 while income tax, inheritance tax and National Insurance thresholds will be frozen for a further two years until April 2028.

The tax-free dividend allowance will be reduced to £1,000 next year and to £500 from April 2024. The exempt amount of capital gains will be reduced to £6,000 next year and to £3,000 from April 2024, but capital gains tax rates are otherwise unchanged so there should be no rush to sell assets to realise gains. 

A rise in the Energy Profits Levy and a new tax on the extraordinary profits of electricity generators will raise £25 billion. The former will hit oil/gas producing companies unless they can offset it with investment allowances for developing UK oil and gas extraction. Comment: I hope Just Stop Oil take note of this poke in the eye and give up their campaign.

There will also be an impact on renewable energy generators with a 45% levy on “extraordinary profits” – defined as electricity sold above £75MWh.These changes seem to have been well anticipated and the prices of renewable energy trusts (wind farms etc) not significantly changed so far today at the time of writing while a UK gas producer I hold has risen.

It is always unfortunate though that the Government is making legislation that changes the likely future profits of these companies on which their long-term business plans, and my investment decisions were based.

There is also some jam for those living on means tested benefits to help with the cost of living. Benefits will rise by the rate of CPI meaning they will go up by 10.1%. There will also be £6.6 billion provided to improve the energy efficiency of houses and business premises which is a rational move when the UK compares very badly with similar European countries in insulation of buildings and construction quality.

The Chancellor has also announced that electric cars will no longer be exempt from vehicle excise duty from April 2025. This is a sensible move as the lack of tax on them was undermining the tax base and that incentive will no longer be necessary.  

In conclusion I suggest these tax/spend changes are a reasonable compromise and seemed to have had minimal impact on the stock market. I quote from the Chancellor: “The furlough scheme, the vaccine rollout, and the response of the NHS did our country proud – but they all have to be paid for. The lasting impact on supply chains has made goods more expensive and fuelled inflation. This has been worsened by a Made in Russia energy crisis.Putin’s war in Ukraine has caused wholesale gas and electricity prices to rise to eight times their historic average.”

Raising taxes won’t be liked by some Conservative MPs but I think they will accept the changes as necessary. The key is to ensure that spending cuts actually happen and that there is no back-sliding on that commitment.

Autumn Statement:

Roger Lawson (Twitter:  )

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