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RUTH SUNDERLAND: Bosses must stand up to Corbyn

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Business leaders are utterly terrified of a Corbyn government. One chief executive of a household name retailer I met last week was visibly shaken at the prospect. 

Bosses in all sectors from investment banks to manufacturers are scared stiff – much more so than they are about Brexit.

Yet despite the strength of their feelings, most are reluctant to speak out in public. In the case of consumer businesses they are fearful of a backlash in the form of boycotts that could damage their share price.

Reckless promises: Jeremy Corbyn and the shadow chancellor John McDonnell need to be told that wrecking the economy is unlikely to lead to higher tax revenues

Reckless promises: Jeremy Corbyn and the shadow chancellor John McDonnell need to be told that wrecking the economy is unlikely to lead to higher tax revenues

Reckless promises: Jeremy Corbyn and the shadow chancellor John McDonnell need to be told that wrecking the economy is unlikely to lead to higher tax revenues

They want to steer clear of politics and leave it to business lobby groups and trade associations. The problem with that is the lobby groups are too mealy-mouthed.

Take the CBI’s statement after the two main parties set out their spending plans. In the same breath, it praised Labour’s ambition to wipe out regional inequality and to decarbonise the economy alongside the Conservatives’ fiscal rules that would allow us to modernise our infrastructure.

The CBI styles itself as the voice of business but gave no sense of how many of its members feel. The faux-balance in the statement, the idea there is any equivalence between the Labour and Tory visions for the economy is absurd.

No mention here of the orgy of public spending being proposed by Shadow Chancellor John McDonnell. 

He is conjuring up images of a workers’ paradise, though the flip side is that it would be a nightmare for entrepreneurs and anyone trying to manage a business.

McDonnell and Jeremy Corbyn are hostile to aspiration. They heap contempt on billionaires such as Sir Jim Ratcliffe. 

His mooted move to Monaco may be questionable but his achievement in rising from council house roots to be an employer of thousands is not.

Under Labour, chunks of companies’ share capital would be seized and swathes of the stock market nationalised.

The crude suggestion that ‘the rich’ will pay for all this through higher taxes is naïve at best. Genuine tycoons will leave the country and the supposedly wealthy people, who are in fact just middle class, will soon be a great deal poorer.

Corbyn and McDonnell need to be told that wrecking the economy is unlikely to lead to higher tax revenues.

Far from offering a vision for a new economy, a Labour victory would lead to a further huge fall in the pound, driving up prices in shops; and plunging share prices, hurting people’s pensions and savings.

Yet business leaders and the organisations representing firms prefer to remain silent, or make only anodyne statements.

This isn’t an easy issue. There is an argument that when they do speak out, it is counterproductive.

It’s different in the US, where two businessmen, Donald Trump and Michael Bloomberg, are squaring off. Starbucks founder Howard Schultz – who has spoken out against Trump – was, until he recently decided not to run, seen as another possible opponent to the President.

In this country, top business people like M&S chairman Archie Norman who go into politics are a rarity. This may explain why the Conservatives have failed to make a convincing case for business and capitalism as a force for good.

The Tories also want to spend. Their argument is that with interest rates low, it is a good time to invest in infrastructure.

There is a risk that the focus on balancing the books valued so highly by Mrs Thatcher, who likened herself to a housewife keeping a family budget, has been too easily cast aside. 

But this is a lesser concern compared with the overturn of capitalism Corbyn and McDonnell yearn for.

In the face of this, chief executives cannot pretend they are politically neutral or above the fray. 

They are responsible for the livelihoods of millions of people in the wealth-creating private sector of the economy. This is not good enough when the entire foundation of our prosperity is under attack.

Failing to speak out, choosing not to defend their employees and customers, looks a lot like dereliction of duty.

 

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Rugby World Cup helps Heathrow Airport record its busiest October on record

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The Rugby World Cup helped Heathrow Airport record its busiest October on record.

A total of 6.9m passengers travelled through its terminals last month.

Heathrow said flights were fuller, particularly to Japan, where the home nations took part in world rugby’s showpiece.

Flying high: South Africa beat England (pictured celebrating during an early match) in the Rugby World Cup final

Flying high: South Africa beat England (pictured celebrating during an early match) in the Rugby World Cup final

Flying high: South Africa beat England (pictured celebrating during an early match) in the Rugby World Cup final

Wales reached the semi-finals, losing to South Africa, who went on to beat England in the final.

In total, trips to East Asia were up 4.9 per cent while Africa was up 5.9 per cent and the Middle East 6.5 per cent. 

Trips to the Middle East increased, in part due to Virgin opening a route to Tel Aviv in Israel, and East Asian trips grew with British Airways flying to Kansai International Airport in Japan.

Heathrow also remains on track for a ninth consecutive year of passenger growth. Chief executive John Holland-Kaye said: ‘Heathrow continues to deliver for the economy. 

‘But we are also making progress on tackling the biggest issue of our time – climate change – by decarbonising the global aviation sector.’

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Greggs raises profits forecast for fourth time this year sending its valuation soaring to over £2bn

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Greggs has raised its profits forecast for the fourth time this year – sending its valuation soaring to over £2 billion.

More customers are visiting the bakery chain’s stores, and a total sales increase of 12.4 per cent in the past six weeks compared to the same period last year pushed shares up 16.5 per cent, or 293p, to 2064p.

The Newcastle-based company’s £2.1 billion market capitalisation is bigger than outsourcer Serco’s and self-storage company Big Yellow Group.

Join the queue: More customers are visiting the Newcastle-based bakery chain's stores

Join the queue: More customers are visiting the Newcastle-based bakery chain's stores

Join the queue: More customers are visiting the Newcastle-based bakery chain’s stores

Greggs had previously been expecting full-year profits to be around £107m on revenues of £1.16 billion, according to its house broker. But the business said it anticipates profits ‘to be higher than our previous expectations’.

Launched 80 years ago by John Gregg, who sold fresh eggs and yeast, the group has transformed itself into a leading food-on-the-go retailer with 2,000 stores and 23,000 UK staff.

Earlier this year growth was boosted by the success of its vegan sausage roll, and more vegan lines are expected early next year.

But bosses warned they would temper its store openings this year and that Brexit was leading to an increase in labour and input costs.

Neil Wilson, analyst at Markets.com, said: ‘Greggs has the magic touch. We’re now talking about a £2 billion sausage-roll seller.’

Last month the company’s chief executive Roger Whiteside said the company had stockpiled selected ingredients including bacon in case of a No Deal Brexit.

The chain announced its Christmas menu this week which includes a pigs-in-blankets baguette and turkey and stuffing soup.

Two years ago the company was accused of sacrilege after an advert for its Advent calendar showed an enormous sausage roll in a crib in place of the baby Jesus surrounded by the Three Wise Men.

Christians said the mock Nativity scene was ‘an affront to millions’ and no other religion would be treated in that way. Greggs apologised.

Yesterday the firm was mocked for encouraging its customers to watch their weight by opting for lower-calorie ringed doughnuts.

Good Morning Britain host Piers Morgan said: ‘You’ll still get fat.’

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US private equity business KKR makes a formal approach to buy Walgreens Boots Alliance

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Boots’s owner has received a £55bn buyout proposal – a deal that if completed would be the largest ever debt-fuelled transaction.

US private equity business KKR has made a formal approach to buy Walgreens Boots Alliance – the High Street chemist’s parent company – and take it private, Bloomberg reported last night.

The sheer size of the company has made the prospect of a buyout seem fanciful, and the feasibility of the current proposal is not clear.

Swoop: US private equity business KKR has made a formal approach to buy Walgreens Boots Alliance

Swoop: US private equity business KKR has made a formal approach to buy Walgreens Boots Alliance

Swoop: US private equity business KKR has made a formal approach to buy Walgreens Boots Alliance

But unions have already said the prospect of the mega deal raised fears over the future of Boots’s 54,000 UK employees and 2,500 stores.

Walgreens, one of the 30 companies that make up the elite Dow Jones Industrial Average, is worth £44 billion and has £13bn of debt. The largest leveraged buyout in history was in 2007 when Texas-based power company TXU was sold to KKR and TPG for £35 billion.

It ended in bankruptcy seven years later after the firm collapsed under £31bn worth of debt, costing KKR £3.1 billion in losses.

The Boots deal is reportedly being driven by the US giant’s billionaire chief executive Stefano Pessina, 78, who holds a 16 per cent stake.

The Italian, who worked with buyout house KKR in 2007 to take Alliance Boots private for £11.1 billion, could be in for a £9.4 billion payday if shareholders were bought out.

For the deal to go ahead, he would have to pull in more than £15 billion of equity, Stephen Schwarzman, the boss of Blackstone, said last week, describing the plans as a ‘stretch’.

Some analysts have questioned whether Walgreens could generate the quick returns that the private equity model requires.

Critics also say that going private will not solve the underlying problems in the business. The wider group has been forced to cut £1.4 billion a year in costs by 2022 by closing stores and laying off staff.

Boots has already announced it will close 200 stores to help mitigate sliding sales and profits in both its retail and pharmacy businesses.

The High Street stalwart has suffered from increasing competition from supermarkets and online rivals. KKR declined to comment. Boots were contacted for comment.

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