Tax haven London targeted by activists armed with adverts (and palm trees)

Global collective The Rules launches ‘Visit the City’ mock campaign in bid to shine light on tax avoidance

Over a year after the end of the Occupy tented protests in the City of London, a new movement has sprung up to challenge the global economic consensus, in this case focusing on what protesters say is the rampant, worldwide problem of corporate tax avoidance.

The campaign, launched on Monday, features a mock corporate video and a set of posters seemingly extolling the virtues of the City as a place to do business. The slogan is: “Visit the City of London – the tax haven capital of the world”.

It has been organised by a group called The Rules, a loose global collective with links to Occupy, which aims to stage a number of campaigns based on what it sees as major issues connected to fairness and equality in each country.

The London campaign, in which the group has bought poster space on phone boxes and produced the video above, is aimed at focusing attention on tax avoidance and evasion during the UK’s presidency of the G8 group of industrialised nations and ahead of elections later this month in the Corporation of London.

While the Corporation stresses it has no special status related to tax and brings no tax advantages to companies based within its environs, the campaign argues it nonetheless gets special treatment from government – not least because of the square mile’s vehement lobbying – and says City-based firms widely use overseas tax havens.

Corporate tax avoidance has become an increasingly controversial issue, in no small part thanks to the efforts of another loosely organised campaign group, UK Uncut, which has highlighted the tax affairs of companies including Vodafone, Goldman Sachs and Starbucks.

Alnoor Ladha, from The Rules, said: “This campaign is about bringing a global voice to the UK tax debate. This affects us all. The City of London is a global hub for the tax haven spider web that extracts wealth from the developing world. We stand in solidarity with the brave citizens of the UK that are fighting the unjust practices of their government.

“To be clear, this not about a couple of bad apples, such as Starbucks or Amazon. It’s about the underlying system that allows the few to benefit at the expense of the majority.”

The campaign is also intended to promote a more traditional, Occupy-style street event in the City this Saturday, where The Rules will join with activists from Occupy and UK Uncut to – the promise goes – “transform a space in the City of London into a tropical tax haven”.

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Mobile phone charges: ‘Welcome to France’? But we’re in Kent

Residents and tourists at the foot of the white cliffs of Dover regularly get charged for using French network

Visitors to the famous white cliffs of Dover are getting a nasty surprise when they want to use their mobile phones – they are picking up a French signal at higher charges.

Residents and tourists in the seaside village of St Margaret-at-Cliffe and St Margaret’s bay at the foot of the Kent cliffs – just 18 miles from France – regularly get a “Welcome to France” message and the extra costs, including data roaming charges for smartphone users, from companies such as Orange F and SFR.

Landlord of the Coastguard pub and restaurant on the beach Nigel Wydymus, 53, said: “We are a little telecommunications enclave of France here.

“It did not cause a huge amount of trouble for a few years because you got a message saying ‘Welcome to France’, but since smartphones have come in it’s more of a problem.

“Obviously people strolling along the beach in England do not expect to be on a French network and so, unlike when they get off the plane in Spain or elsewhere, they haven’t switched off their data roaming and it causes some extra bills.

“In the village the French signal is patchy depending on the atmospherics and the weather, but here on the beach the French signal is constant because we are at the foot of the cliffs and the UK signal is blocked out.”

Costs for making a call on the French network can be up to four times the cost of using a domestic one with a cost of up to 28p to make a call and nearly 8p to receive one and nearly 9p to send a text.

The signal problem has upset locals who want something to be done to stop the extra charges and inconvenience.

A spokesman for EE said: “We always recommend our customers switch off roaming while they are in this little pocket of an area to ensure that they are connecting to the correct network because we cannot control the networks from the other side of the water.”

The issue is believed to affect all UK networks.

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Hidden extras that drive up car hire costs

The additional driver, satnav and excess … all these can add up to more than your original car hire quote

Are you planning to hire a car over the Easter holidays? Beware hidden extras, which can add as much as £350 on top of the original quoted cost.

According to research for The Observer, adding an extra driver, particularly one under 25, a car seat, a satnav and excess car hire insurance at the rental desk all bring extra cost – in some cases more than the price of the actual hire. The most expensive optional extra is adding a young driver, but choosing to hire a satnav can also make a sizeable difference to how much you pay.

Website icarhireinsurance.com compared the hire car prices of four rental companies at five popular destinations (Malaga, Faro, Nice, Milan and Barcelona) for the Easter week of 29 March to 5 April 2013. It found that hiring a standard family car in Malaga with Hertz, for example, would cost £280 for the car – but an extra £352 if you wanted two extra drivers added (one under 25), a car seat, a satnav and paid for excess insurance to take your waiver down to zero.

Don’t assume, either, that you will pay the same price for identical extras with the same car hire company in different destinations. Hertz, for example, charges £57 for a car seat in Faro but £38 in Nice. A satnav with Avis in Nice will cost £97; but £50 in Faro.

The cost of fuel can be another hidden nasty if you use a car hire company that employs a “fuel empty” policy, where consumers are charged for a full tank of petrol when they pick up the car and told to return it empty – with no refund for unused fuel.

In 2012, Which? sent undercover researchers to Spain to investigate car hire companies after receiving complaints from its members about large charges for fuel that were not made clear at the time of booking. Its researcher in Malaga was told that the cheapest initial car hire price, including basic insurance, was from Goldcar at €30.25. But when the cost of fuel was added on arrival, the price rose to a whopping €94.25.

“Our research has shown that these unavoidable fuel charges can triple the price of a rental, turning what seemed like a good deal to potentially a very expensive one,” said Which? Travel expert Rochelle Turner. “All charges should be shown up front at the time the booking is made so consumers can make the right choice and compare prices easily.”

In both cases, it is relatively easy to avoid car seat and satnav charges by taking your own. Airlines’ policies on car seats differ, but most will allow you to take one on board (but often only if it is pre-approved and/or is a rigid-framed five-point harness type), or will allow you to check it in with your hold luggage. You sometimes pay a fee, but this is typically cheaper than hiring a seat from the car company. If you already have a portable satnav, you can usually buy a card compatible with the country you are visiting to put in it. Alternatively, you can buy a new satnav that covers both the UK and Europe for around £50-£60.

Some of the extras you simply won’t want. However, excess waiver insurance is one that many drivers who have had their fingers burnt will be wary of dropping. This can add on as much as £35 a day, but if you don’t take it you could be liable to pay a typical £1,600 if the car gets damaged or stolen. It can even cost more — Avis’s starting excess in Faro is £2,567.

“Take out excess waiver insurance here in the UK rather than with your car supplier,” says Bob Atkinson of travelsupermarket.com. “A standalone policy is significantly cheaper and gives you greater levels of cover and protection in case of accident or damage to your vehicle.”

Companies including Insurance4carhire.com and icarhireinsurance.com have annual and daily policies that you buy before you go, and can cost as little as £3 a day.

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One in seven women are made redundant after maternity leave

‘Sad and shocking’ poll reveals maternity leave can mean demotion, stress or the sack

Women are suffering escalating levels of illegal discrimination at work when they get pregnant, and are often made redundant while they are on maternity leave, according to a new poll.

The figures show one in seven of the women surveyed had lost their job while on maternity leave; 40% said their jobs had changed by the time they returned, with half reporting a cut in hours or demotion. More than a tenth had been replaced in their jobs by the person who had covered their maternity leave.

Samantha Mangwana, an employment lawyer at Slater & Gordon, the law firm which commissioned the research, said the results were “sad and shocking”.

“Women are suffering in silence,” she said. “A common case is that a woman goes back to her role and all her clients have been given to other people. And they are not returned. So everything she has built up over the years is gone. Or they are simply being made redundant ahead of worse-performing men. The big issue is that women are somehow seen as being less committed to their employers because they are now mothers. Many companies are settling out of court because they don’t want to be seen to be treating pregnant women or new mothers like this. But the awful thing is that I see the same major companies again and again and again, writing out these cheques – accompanied, of course, with a confidentiality clause.”

Research company OnePoll questioned 1,000 women last month. On returning to their jobs, almost a third of the new mothers (30%) felt they didn’t fit in any more and two in five felt they lacked support, with almost 20% feeling that no one understood what it was like juggling work with new motherhood. Nearly one in 10 said the stress affected their relationship with their partner. Only 3% had sought legal advice over maternity discrimination; 10% had sought help from their HR department.

It is unlawful to dismiss or otherwise disadvantage an employee for a reason related to her pregnancy or maternity leave. Campaign group Maternity Action provides advice to women and is trying to get the government to monitor unlawful discrimination. Before the recession, the Equal Opportunities Commission estimated that 30,000 women lost their jobs each year as a result of being pregnant, and campaigners believe that figure has risen dramatically.

“Those walking into Slater & Gordon are the tip of the iceberg,” said Rosalind Bragg, director of Maternity Action. “We know there’s a huge amount of pregnancy discrimination among low earners, who would not be able to go into a legal office for help. Demand for our helpline has doubled year on year for the past three years and our information sheets were downloaded 397,000 times.

Few cases go all the way to tribunal and when they do they attract a lot of publicity, like the case last month of Katie Tantum, 33, a trainee solicitor who accused a City law firm of sex discrimination, saying they “just stopped bothering” with her when they discovered she was pregnant. A judgment has yet to be reached with the firm claiming it was her “intellectual vigour” at fault.

Bragg said: “We believe only a very small percentage of women take any action against an employer who has broken the law. They may simply not know their rights, but often there will have been a period of bullying and harassment before the woman is finally sacked or leaves, so she’s in no position to invest energy and emotion, let alone money, in pursuing an action that may well not produce results.”

She pointed to comments made in 2011 by Downing Street’s then director of strategy, Steve Hilton, who suggested that scrapping all maternity allowances at work would help the economy. “People might have backed away from his comments afterwards, but that message was already out there loud and clear.” She added: “This year employment tribunal fees are to be introduced: an upfront fee of £1,200 before you even start, which is just increasing barriers. We expect the situation to get a lot worse.”

One woman who contacted Maternity Action was Sarah, from the south-east. She wrote: “I was both anxious and excited about going back to work … I’d agonised over childcare and paid a large deposit at our local nursery. I’d left my son there for two weeks to get him used to it gradually. I had to buy new clothes as none of my old ones fitted any more … Like many women, I felt unconfident about going back – but also exhilarated. The day came, I dropped my baby off, and arrived at work early and raring to go. The head of personnel invited me for a coffee to explain that, with regret, I was being made redundant.”

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Cash Isa rates improve

Long-suffering Isa savers are finally seeing rates edge up. We round up the best of them

Savings rates have taken a hammering ever since the Bank of England slashed the base rate to 0.5% four years ago this week, and the government’s Funding for Lending scheme has arguably made things worse. But are we now starting to see some green shoots of hope for long-suffering savers?

On Monday, Santander will launch a range of cash Isas, including an easy-access account paying 2.5% for 12 months, and a two-year fixed rate paying up to 3%. Its move comes days after Barclays and HSBC launched Isas paying up to 2.3% and up to 2.75% respectively. Some have strings attached, but don’t stack up too badly against the current overall best-buy 2.8% rate from Coventry building society.

At the same time, the Halifax has announced a boost to its monthly prize draw, with six top prizes of £250,000 up for grabs in May and June, in a bid to encourage more people to use their full cash Isa allowance.

Meanwhile, First Direct current account holders can get an impressive 6% fixed for a year if they sign up for the bank’s new Regular Saver account, where you can save between £25 and £300 a month for 12 months. If you stashed away the maximum, you would receive £117 gross interest. Alternatively, you can enjoy a 5% return for 12 months, and thereby earn up to £125 interest over the period, if you’re prepared to sign up for Nationwide’s FlexDirect current account.

The new rates represent a much-needed boost for savers, who have been the biggest losers from the Funding for Lending scheme launched last August. This was designed to help lenders offer cheaper loans to homebuyers and businesses, but those trying to put some money aside for the future are paying a high price. Since August 2012, the average interest paid on a cash Isa has fallen from 2.5% to 1.8%, while some of the deals from the major high street names have fallen even further.

Santander’s new products include an easy-access account called Direct Isa Saver, which offers a variable rate of 2.5% for 12 months. However, the minimum opening balance is £2,500. Santander is also bringing back its Major Isa, which is a two-year fixed-rate account paying 2.8%, with savers getting an extra 0.1% if Rory McIlroy – one of the bank’s brand ambassadors – wins an eligible golf major championship in the next two years.

There is also a version paying a slightly higher rate – 3%, plus the possibility of an extra 0.1% – that is only available to holders of its 123 current account or 123 cashback credit card. All three Isas accept new money and transfers in of existing Isa cash, including existing Santander Isas.

Last week, Barclays launched the Instant Cash Isa and the 3 Year Flexible Cash Isa, both of which let savers transfer in money from other Isas held with Barclays and other providers.

The former is an instant access account paying 2.1% on balances of £1 to £14,999; 2.2% from £15,000 to £29,999; and 2.3% above £30,000. However, these rates are boosted by an introductory bonus of 0.8% that lasts for 12 months. The three-year Isa is a fixed-rate product, not boosted by a temporary bonus. It allows you access to some of your money – you can make up to three withdrawals during the term, each of up to 10% of the current balance.

Last Monday, HSBC launched new deals, though its cash Isas are only available to current account holders. If you are a Premier account holder, its variable rate Isa pays 2.75% on balances over £15,000, and 2.25% below, while for Advance current account customers, the rates are 2.15% and 1.65% respectively. Standard current account holders will receive 1.7% above £15,000 and 1.6% below. First Direct’s Isa, available to current account customers, pays between 0.5% and 3%.

In late 2011 the Halifax started a free monthly prize draw for customers with balances of £5,000 or more in any of its savings accounts, and this week it announced a “super draw”, with three top prizes of £250,000 in both May and June. To enter the May draw, customers need to have £5,000 in their savings for the whole of April, providing an incentive to savers who have not yet used their full 2012-13 cash Isa allowance of £5,640 to add to their tax free savings before the end of March.

Some people will have built up large sums in cash Isas since 1999, when they were launched, and in many cases will be earning paltry amounts. Many savers are unaware they can transfer their savings while retaining the tax-free advantages.

One provider playing fair is Coventry building society, which has announced it is increasing the rate on all existing variable cash Isas to 2.5%. The move takes effect on 6 April and means that from that date, none of the Coventry’s 250,000 cash Isa customers will earn less than that amount. Of its current offerings, the society’s 60-Day Notice Isa is a best-buy, offering a rate of 2.8%, which includes a 0.6% bonus for the first year. You can invest from £1 up to £5,640, and penalty-free withdrawals can be made with 60 days notice.

Even if you are a taxpayer who can’t afford to tie up money for a long period, it still pays to use an instant/easy access cash Isa because you won’t be taxed on the interest. Fixed-rate Isas typically pay the best, but you need to be fairly certain you won’t need the cash during the fixed term.

Virgin Money has launched a fixed-rate Isa paying 2.75% annually, fixed for five years, available in branches, online and by post. It accepts transfers in of previous years cash Isa money. Withdrawals are allowed during the fixed-rate period, but you will pay a charge equivalent to 180 days’ interest.

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‘Autism doesn’t hold me back. I’m moving up the career ladder’

Driven new generation of people with the condition are showing employers there is no limit to what they can do

Jonathan Young has big plans for his career. The business analyst at Goldman Sachs is on the autistic spectrum. But this, he says, is not something he allows to hold him back.

“I’m the company’s global go-to guy for all the information used in every single one of our internal and external presentations,” he says. “I’m moving up the ladder every year in terms of responsibility or promotion. My ambition is to maintain this momentum. In 10 years, I want to be someone fairly big.”

He is part of the most visible generation of young people with autism our society has ever known. Diagnosed early, this generation have been educated to expect not just a job when they leave school but a career on a par with their “neuro-typical” contemporaries.

The confidence and determination of these graduates – some of whom are educated to PhD level – are forcing the pace of change in organisations previously inaccessible to those with autism. Businesses, from City law firms and banks to global healthcare companies, have begun to open their doors to young people once thought able only to do lowly jobs.

Young first went to Goldman Sachs as an intern in the National Autistic Society’s specialist employment programme, Prospects. His time at the investment bank was such a success that the two-month internship swiftly became a full-time, permanent post.

“When I arrived, this role was a part-time job but I built it up into a key, full-time post and made it my own,” he said. “Autism doesn’t hold me back because I have had the correct support from a young age. It’s key to have that support, both in education and in the workplace, but I don’t require anything complicated: people just have to understand that I’m different.”

For all his confidence, Young admits that he considers himself fortunate. “I never lose sight of the fact that I’m lucky to have a job that allows me to use all my intelligence and stretch my potential,” he said.

Prospects has placed young people with autism in companies including Thomson Reuters, the law firms Clifford Chance and Ashurst, the technology and business consultant Cartesian, and John Lewis.

Penny Andrews got her job as a library graduate trainee at Leeds Metropolitan University in August without any help from a charity or specialist employment agency.

Having beaten 200 applicants to the job, she believes she has proved herself to be the best candidate. “Sometimes I feel people think I should be grateful that I have a job but I’m performing a useful task and doing it well, so they should be grateful to me,” she said. “After all, they wanted me badly enough to employ me a month before I had finished my degree in IT and communications with the Open University.”

Far from feeling that her diagnosis of Asperger’s is something to be “got over”, Andrews maintains it gave her a lead over the other candidates. “I was completely open about my autism throughout the interview process and even asked for a few special conditions to take account of my Asperger’s, such as working from 8.30am to 4.30pm,for example, so I don’t have to take the rush-hour bus home, taking extra breaks in a special quiet area if I need quiet, and not having to answer telephones.”

They are small adjustments for her employers to make, she said, compared with the advantages her Asperger’s gives them. “I’m more focused, intense and honest than a neuro-typical person,” she said. “I do things thoroughly and pay proper attention to detail. I’m always switched on: even when I’m not at work, I’ll go to events that are relevant. Libraries are one of my autistic specialities and I harness that at work.”

Employers’ attitudes might be changing but there is a lot of ground to make up. Just 15% of those with autism have full-time jobs, according to research by the National Autistic Society (Nas), while 9% work part-time. These figures compare unfavourably with the 31% of disabled people in full-time work in the UK. More than a quarter of graduates with autism are unemployed, the highest rate of any disability group. Nevertheless, employers are increasingly coming round to the arguments from disability advocates that employing those on the spectrum is not about charity or social responsibility – but the empirical benefit of taking on people with unique skills.

Tom Madders is head of campaigns at the society and responsible for its Undiscovered Workforce campaign to get young people with autism into employment. He talks of a “vast pool of untapped talent” among those with autism.

“When someone has the intellectual ability and ends up doing a job like working in a supermarket, it’s heartbreaking. It’s such a waste because although everyone with autism is different, the things they bring that are additional to the rest of us include a very high concentration level, very good attention to detail and analytical skills that are key in data analysis and when looking for anomalies in complex spreadsheets,” he said. “Why would employers want to miss out on those skills? In addition, those with autism have very specialist areas of exhaustive interest which, if these can coincide with the job in hand, can be extremely useful. They’re much more reliable in terms of timeliness and absenteeism and very loyal. Often, they’re very happy in jobs other people find boring.”

William Thanh has such severe autism that he can only communicate through his iPad. But his work at the Paul bakery in London is of such high quality that the manager, Salina Gani, is keen to increase his hours.

“When we decided to take on three young people with autism last year, we thought there would be limits to what they could achieve,” said Gani. “But these young men have shown us that we shouldn’t assume anything on the basis of their autism alone. Yes, they need work that’s repetitive and structured, but much of the service industry is like that anyway. We would gladly take them on full-time and increase the numbers of people with autism working for us across all our outlets.”

At Guy’s and St Thomas’ hospitals in London, an initiative was set up two years ago to help people aged 18 to 30 with autism gain work experience. Of the 20 or so interns who completed the scheme, four have jobs at the hospital. The third cohort of about 16 young people to begin this year will be twice as large as that in the first year.

Staynton Brown, associate director of equality and diversity at the hospital, dismisses any suggestion of the initiative being a philanthropic one. “This is not a charitable gesture,” he said. “We want to make sure we have the most talented workforce possible. It’s in our interests in multiple ways. For a start, this hospital serves a very diverse population and we want to do that to the best of our ability, which is more likely to happen if our workforce is used to working alongside a diverse group of colleagues.

“We’ve all benefited from the changes we’ve incorporated to accommodate those with autism. By clarifying the way we give information to and help introduce the interns into the hospital, we’ve made communication clearer for everyone, which leads to better patient care.”

William Elliott, a managing director at Goldman Sachs, agreed. “Employers are thinking more diversely about their workforce because they want to get the best talent through the door. We’re increasingly recognising those talents can be found within this historically underrepresented group.

It’s a lot easier than most people think to integrate someone with autism into the workplace. It just takes a good manager who is prepared to give some time to bring that person on, an approach which will be of benefit to every new employee.”

Project Search, a programme supported by the Office for Disability Issues, helps those with autism find – and keep – permanent employment in companies including GlaxoSmithKline and the security firm G4S. About 30% of Project Search graduates have been taken on by their host employers. An additional 30% are signed up by other employers.

“People are being recruited on Project Search before they have even finished the programme because, far from being seen as a charity scheme, these young people are rightly regarded as a talent pool, like student nurses,” said Anne O’Bryan, who runs the European arm of the programme.

Some of the improvements can be traced to government policies. The Autism Act 2009 – a response to poor employment rates for people with autism – was the first disability-specific legislation to be passed by the government.

In 2011, the Department for Work and Pensions and Nas published a guide for employers, Untapped Talent. But David Perkins, manager of Prospects at Nas, said the government had done as much harm as it had good. “Unfortunately, things really haven’t improved in terms of employing people with autism and Asperger’s syndrome over the last few years,” he said.

Prospects has helped place 30% of its clients in work – 18 people in 2012 and 15 in 2011. But these figures, said Perkins, are down on the three years before. He blames the government’s Work Programme.

“It has been detrimental in helping people with autism to find employment because it really doesn’t reflect the specific needs and difficulties people with the condition might have in terms of employment,” he said, pointing out that some Work Programme providers were getting just 3.5% of clients into jobs.

“Funding for courses such as our own – which is 10 times more successful – is extremely limited, and those with autism who want to work continue to struggle to get adequate support to allow them to do so,” he said. “As things stand, there is so little help out there for the around one in 100 adults with the condition, that finding sustainable employment for people with autism is an uphill battle.”

But Peta Troke of Autism Plus is more optimistic. “The job market is opening up to people with autism in a way it never has before,” she said. “There’s a ‘can-do’ attitude around people with autism now. There’s a spark.”

Unrealised potential

• Only 15% of adults with autism in the UK are in full-time paid employment and only 9% are in part-time employment.

• 26% of graduates with autism are unemployed, by far the highest rate of any disability group.

• Of those who do not currently have a job, 59% do not believe or think they will ever be able to get one.

• According to the National Autistic Society, most of the 300,000-plus working-age adults with autism want to work but are held back by a lack of understanding of autism and a dearth of specialist employment services.

• With help from the National Autistic Society’s employment support service Prospects, 70% of adults with autism were able to find a job.

• Only 10% of adults with autism receive support in finding work but 53% would like it.

• 79% of adults with autism who receive out of work benefits say they would rather work.

• 37% of adults with autism have never had a paid job after the age of 16 and 41% of people over the age of 55 have spent a period of more than 10 years without a paid job.

• 51% of adults with autism in the UK have lived through a period in which they have had neither a job nor access to benefits. Of those, 10% have been in this position for a decade or more.

• Of those who have worked, about a third said that they had experienced bullying and felt that they had received unfair treatment or discrimination as a result of their disability.

• Job applications and interview processes can be particularly challenging for people with autism, as the condition can affect the ability to communicate. Often “good communication skills” are described as a prerequisite in a job specification, even when the role does not directly require them – which can discourage people with autism from applying. Research by Jemma Buckley

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Online grocery shopping: when will Morrisons come in from the cold?

The supermarket risks being left behind as the online market soars – and investors are getting impatient

Sir Ken Morrison, the no-nonsense Yorkshireman who built up the supermarket chain from his father’s market stalls, famously dismissed home deliveries as “something he had done on his bike as a young man”.

With Sir Ken no longer in charge, Morrisons is less sniffy about home delivery – but it remains the only big UK supermarket to shun the booming business of online groceries, which analysts expect to be worth £7.5bn this year.

Investors are getting impatient with Morrisons’ wariness. Dalton Philips, who came in as chief executive after Marc Bolland jumped to M&S, has said the online grocery business “is something that we are going to have to do in the coming months”.

He is under mounting pressure to explain his plans as he prepares to announce the company’s full-year results next Thursday. Morrisons’ internet strategy could make or break the Irish chief executive, who marks his third anniversary in the top job this month.

“They have got to come out definitively and say what they are doing,” said Neil Saunders, managing director of Conlumino retail analysts. “The market is looking for a commitment or otherwise to do online, with a time frame on that, and they are looking for some detail on how the offer will be constructed.”

Morrisons, which had the worst performance of any supermarket chain over the lucrative Christmas period, risks being left behind as the online market soars, analysts warn. When it goes online, it will have to run fast to catch up with rivals who have been selling food over the internet for more than a decade. Tesco.com went live in 2000. Ocado, the upmarket online grocer that sells Waitrose goods, dispatched its first van in 2002.

“Online groceries is about 4.5% to 5% of the market. It is growing around 15% per annum and by 2020 we think it will be worth between 10-12% of the market,” said Clive Black, head of research at Shore Capital. “[By 2020] Morrisons would effectively be competing only with 88% of the market and that is a very difficult task.”

Morrisons blamed its miserable Christmas trading partly on the absence of an online grocery business – like for like sales were down 2.5% in the last six weeks of the year.

It has been taking tentative steps in cyberspace. In 2011 it bought Kiddicare.com. Last year it launched wine website Morrisons Cellar, where a bottle starts at £3.99 and customers can do a taste test devised by posh north London wine merchant Bibendum. This spring, the retailer will launch a kitchen products website with home-shopping specialist Lakeland, bringing its tally of online businesses to three.

And in a move to become more internet savvy, in 2011 Morrisons acquired a 10% stake in Fresh Direct, an online grocer delivering farm-fresh produce to well-heeled New Yorkers.

Morrisons snapped up 56 stores from bust retailers Blockbuster Video and HMV last month, as it seeks to increase its portfolio of convenience stores – another gap in its business that gives investors a headache.

Although Philips agrees the online grocery business cannot be ignored, he strikes a wary note. The “genius of the supermarket”, he said recently, is that customers carry the costs of picking out the goods and shuttling to and from the shop. If supermarkets take this bit over, prices could rise for those shoppers who prefer the bricks-and-mortar experience.

“You can end up therefore subsidising your online shopper by charging your core customer more and that is something that philosophically I struggle with,” he told BBC You and Yours.

Bill Grimsey, former chief executive of Wickes, Iceland and Focus DIY, says Morrisons cannot afford to stay offline as consumers abandon bricks-and-mortar shops. “Do Morrisons have a choice to stay out of the online food shopping business? The answer is unequivocally no. If they don’t, Tesco, Sainsbury’s and Asda will be taking shoppers [Morrisons] could have earned.”

Stanislav Desyatnikov, 42, a software engineer, might be just the customer Morrisons is missing out on. Popping into Morrisons in north London to pick up some juice, he said he and his wife shop online for groceries once or twice a month – at Tesco. If Morrisons offered home shopping, he could be tempted. “I work nearby, so I could have the food delivered to my office.”

When Morrisons takes the plunge, it must decide whether to ship orders out from the network of 455 supermarkets, or use “dark stores”, drab dotcom-only warehouses that are springing up on industrial estates across the country to feed the hunger for online shopping.

Analysts expect Morrisons will choose store delivery to get their fresh produce speedily to customers. “Morrisons has a great advantage in that it really is top of the pack for fresh food,” said Andrew Stevens, senior retail analyst at Verdict. A ‘fulfilment from store’ strategy would be the best way to translate these fresh-food values, he said.

“Though in London and the south-east, it will certainly resort to warehouses, because it has fewer stores.”

This combination of store delivery and warehouses in the south east is favoured by Tesco and Asda, while Sainsbury’s has traditionally preferred delivery from its shops.

But Morrisons will have to open its wallet if it wants to elbow its way into this crowded market. It could try to tempt customers away from rivals with free delivery, fistfuls of discount coupons, or the increasingly popular “click and collect” service that allows customers to pick up their online orders in-store

Speculation persists that Morrisons could make a bid for Ocado. This would give them “a leg up in the market”, said Saunders of Conlumino, “but they would have to think seriously because Ocado is not a profit-making operation at the moment”.

Not everyone is convinced internet shopping is the answer to Morrisons’ recent sales slowdown. Some analysts accuse the retailer of deserting its core customers, by moving up-market with its “Fresh Format” revamp, stores offering treats such as artisanal bread and olive counters. “Fresh Format is visually lovely,” said Clive Black at Shore Capital. “But we think they have disenfranchised some of their traditional customers and failed to attract new ones,” he said. “The fresh herbs and the cupcakes haven’t attracted the customers Morrisons seem to have been aspiring too.”

Philips has always stoutly rejected the charge of losing touch with his customers. He also insists being last to online shopping is no bad thing – because Morrisons can learn from rivals’ mistakes.

But time is running out. “There is no last-mover advantage. It is a fiction,” said Saunders. “The problem is that the grocery market is saturated.  

“Morrisons has now got to steal the show from every other player in order to win business.”

Other online refuseniks:

Aldi and Lidl: Tight times mean “hard discounters” Aldi and Lidl are booming – without a single sale online. With “a lean and efficient logistical model”  that eschews “luxuries, such as customer service and plastic bags” it is hard to see why they would go for the “frippery” of a pricey online service for groceries,  said Bryan Roberts at Kantar retail consultancy. But online shopping could make sense for their non-food products, he added.

Poundland: Everything for a pound might not sound like a promising start for a home shopping service, but Poundland could make it work.  Rival discounter Poundworld created its Discount Wholesale website, which sells everything from novelty ties to pregnancy tests. Targeted at small traders, Discount Wholesale demands a minimum spend of £500.

Primark: Booming sales show being offline isn’t hurting, but supply chain director Martin White has said it would be “dumb as a business if we weren’t looking online”. Clive Black, head of research at Shore Capital, thinks it unlikely Primark will go online soon, but it will “develop its website so it is more of a showroom”.

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High street sales forecast to shrink £13bn in next five years

Business that invested heavily in bricks and mortar may struggle as online sales predicted to more than double to £70bn by 2020

Tough times on the high street show no sign of abating, with sales from bricks-and-mortar stores expected to shrink by £13bn in the next five years, as customers continue to flock online.

Internet sales in the UK will more than double to £69.7bn by 2020, from an estimated £28bn in 2012, according to the investment firm Panmure Gordon.

“If retailers think the last 10 years have been tough for the industry, the next five years look even worse,” said Philip Dorgan, investment analyst at the company.  “There are going to be far more losers than winners.”

Businesses that are heavily invested in property are tipped to struggle, such as Argos-owner Home Retail. Ocado, the grocery delivery service, is also predicted to fare poorly, as it continues to underperform the fast-growing online food market.

Online shopping is expected to peak at 30% of all sales.

“Having stores in every high street will no longer be an advantage,” said Dorgan. The most successful retailers would be the ones who use data about their customers to best advantage, he said, an area where the likes of Amazon has a head start.

One of the biggest winners could be online fashion retailer ASOS, which recently enjoyed a 41% rise in Christmas sales.

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Leaseholders ‘at risk’ from court judgment

A leaseholder group fears decision will be used by freeholders to ‘bamboozle’ lessees into paying for expensive and unnecessary work on their blocks

Leaseholders in blocks of flats have lost a significant protection against landlords who fail to properly consult about often enormously expensive repairs to their properties.

One leaseholder group fears a judgment in the UK supreme court this week, limiting consultation rights, will be used by freeholders to “bamboozle” lessees into paying for expensive and unnecessary work on their blocks.

Until now, if freeholders failed to follow proper procedure for consulting lessees on renovations, the cost of which can be added to service charges, they risked having to foot almost the whole bill for themselves.

Now the UK supreme court has ruled that the tough sanction, contained in Section 20 of the Landlord and Tenant Act 1985, should only apply if leaseholders have suffered actual “relevant prejudice” as a result of a landlord’s failure to follow the procedures.

The lessees will now have to prove they have lost out by showing, for example, that they could have found a cheaper contractor for the work if properly consulted.

The regulations, brought in by Labour in 2002, arose out of fears that freehold owners of leasehold flats had no incentive to get the best deals for work on their buildings, since any inflated costs would simply go on the service charges of their lessees.

There have been particular problems where local authority tenants have bought their flats only to find huge bills for repairs added to their service charges.

The law says that unless the consultation requirements are followed, or a dispensation is given by the leasehold valuation tribunal (LVT), the landlord cannot recover more than £250 from each lessee for the work – a tiny sum when bills can run into hundreds of thousands of pounds.

Landlords complain the law gives huge windfall gains for technical breaches of the regulations – often when consultation would have made no difference to the lessees.

Under the rules landlords should provide details of proposed work to lessees; obtain estimates for the work; invite the lessees to propose other contractors; and take account of their views on the work.

In the case before the supreme court, Daejan Investments v Benson, Lord Neuberger noted: “The purpose of the requirements is to ensure that tenants [ie lessees] are protected from paying for inappropriate works, or paying more than would be appropriate.”

But he added: “There is no justification for treating consultation and transparency as appropriate ends in themselves.”

Daejan owned Queens Mansion in Muswell Hill, north London, where five flats were held under long leases. The property’s management company complied with only part of the consultation requirements for a big renovation in 2005, according to evidence to the LVT.

Daejan wanted £280,000 from the leaseholders for the work, but offered a reduction of £50,000 during legal proceedings. However, a LVT considered Daejan’s failure to be serious and refused to give the company a dispensation from the requirements. Daejan was faced with having to accept only £1,250 for the work.

The court of appeal backed the leaseholders, but the supreme court ruled in favour of Daejan, with Neuberger saying: “The correct question in this case was whether, if dispensation was granted, the respondents would suffer any relevant prejudice.”

In other words the leaseholders needed to show they were out of pocket as a result of the failure to consult properly. In this case the court decided Daejan’s £50,000 offer more than covered any harm they might have suffered.

Bob Smytherman, chairman of the Federation of Private Residents’ Associations, said: “Managing agents will use decisions like this to bamboozle leaseholders into extra expense. They will be carrying out unnecessary bureaucratic works and charging it to the service charges account.”

Leaseholders had already been campaigning for reform of the limited protections of the consultation regulations, and the latest judgment would make things “substantially worse, making our processes even more complex,” he said.

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