Sleazy UK Politics may Breed Corrupt and Venal Companies

Blain’s Morning Porridge, 8^th November 2021 – Sleazy UK Politics May Breed Corrupt and Venal Companies

“A man who has never gone to school may steal a freight car; but if he has a university education, he may steal the whole railroad.”

This morning – Short porridge this morning as I’m angry and in a rush. As the UK  government flounders in yet another storm of sleaze and corruption accusations, its venality and crass opportunism appears to be spreading through the economy, and is likely to hold back the recovery of personal and business travel.

I’m afraid I won’t get time to write a proper Morning Porridge today. I was going to examine the apparent strength of the US economy, and why that’s bad news for bonds and therefore overpriced stocks. I won’t get round to Musk’s gaslighting promise to sell 10% of his Tesla stock. Nor will I find time to delve into the increasingly vicious end-game gang-war at the top of the Chinese leadership contest – which will still likely see Xi Jinping anointed de-facto emperor.

Instead, I find myself on the periphery of Tory Sleaze. I shake my head in despair… and blame myself. I voted for them.

When even the Rupert Murdoch Sunday Times is headlined with “New Tory sleaze row as doners who pay £3 mm get seats in House of Lords” or “Cynical treasuer system is great untold scandal” , then it’s clear the thin ice is cracking under the current Boris government. Which is a terrible shame. Boris and his party were about to score a major Publicity win from a “more effective than expected” COP26 Climate Change conference in Glasgow – but is there anything on the front pages aside from Tory Sleaze?

It’s a shame because the Conservative Government still shows a far higher likelihood of putting the nation back on its feet after the pandemic than the still Corbynite Labour Party – and that’s after weighing up the probabilities the Tories will commit a major policy mistake by imposing austerity spending. The problem for the Labour party – whatever its left-wing believe about a workers’ paradise – the UK electorate wants a government of the centre first..

We should have what we want; a slightly left-of-centre Conservative government willing to fund recovery (a generally good thing), but instead it’s shown itself to be increasingly corrupt and venal. If it wasn’t former premier David Cameron lobbying dodgily for Greensill, then it’s been Tory Minister’s chum’s troughing from government handouts and contracts through the pandemic. Then it was last’s week abrupt volte-farce trying to protect a Tory MP from the independent parliamentary standards committee – Boris assuming if the rules don’t suit, then he could change the rules.

There are some good Labour politicians. There are some good and honourable Conservative politicians. The question is how do we get them into office?

The problem with little corruptions and venality is how quickly it spreads. If one pig gets it head in the trough, all the others will do the same. If one dubious businessman sees the opportunity to buy respectability like a title via donations to the Government, or buying the prime minister a holiday in the sun, then everyone will do it. The effect spreads. As the French say (and know); fish rot from the head down…

Which leads me to my own issue.

Global business travel is about to reopen. The US will be opening its doors. Travel is going to surge. Airlines will recover.. and travellers are going to face a ……. nightmare. Covid Testing.. a new industry that’s sprung up overnight is effectively writing its own rules and reaping monopoly profits. Covid testing is proving a gold mine for well-connected opportunists.

I ran into it last night.

I’d booked an £80 PCR “fit to fly test” late on Sunday evening for a business flight on Tuesday with a company call “ExpressTest”. I showed up to their drive-in testing centre to discover a bored security guard and 2 girls doing the tests. I got chatting to them and it was clear it was just a job to them. I was administered the swabs while I sat in the car, and immediately noticed it was a lateral flow test she was doing. I suggested it was a mistake… I needed a PCR, and that’s what it said on the booking which I showed her again. I was told the test I was getting was the one they did – and could complain to their customer service team.

I called “customer support” – after the usual guff about high volumes of calls, then eventually admitted there seemed to have been a mistake. But because the centre was now closed I couldn’t get a new test till Monday, and there was therefore no guarantee I would get the result in time for a Tuesday flight. The girl promised me a manager would reply to my complaint by email that evening – but no one did.

I now face a scramble this morning to get a 12 hour PCR test in time for my flight on Tuesday – which is why I rushing to write this. I spent hours last night trying to book one – I was offered a fast test at Heathrow (2 hours away).

So late last night I did some digging – and discovered ExpressTest is owned by a firm that’s emerged during pandemic called Cignport Diagnostics Limited.  The three guys behind the company include a proper doctor, and two chaps who are involved with Inchora Investments – which I’ve only ever noticed in the UK housing rental sector before.

Now there is absolutely nothing wrong with any company spotting an opportunity and making it happen… but… after my experience last night I can’t help but think the whole thing and Covid Testing stinks of something fishy and financially dodgy. It felt like the kind of thing that should be on the pages of Private Eye, rather than trying to assist the UK travel business to recover and get up flying again.

I’ve haven’t had the time overnight to properly research the company, but I did find out one of the three founders is a former conservative councillor, Nick Markham. He’s had a stellar career as the youngest ever Conservatives on the notorious Westminster Council rising to deputy council leader, and has the spent the last 8 years in a succession of Non-Executive Director roles in the Department of Work and Pensions. He even has a page on the UK.Gov website.

The other Inchora Chap is it’s CEO; Steve Whatley. Aside from involvement in Rental Property – perhaps his link to Westminster Council – he’s co-chair of the All-Party Parliamentary Group (APPG) “Business in a Pandemic (Covid) World”. The APPG’s biggest contribution to solving the pandemic business crisis is a press release where it proposes “fit to (fly or attend)” covid passes should be administered at test centres with the government acting as “final underwriter” of the costs of the test programmes. (You can find it here.)

I also discovered Cignport is one a few large test firms who’ve got together to write rules for the test industry.

Effectively Cignport is a company that not only stumbled on the whole new business niche of profiting from enforced passenger testing, but it is also self-regulating that same niche! Meanwhile, its managing to charge customers £80 a shot and has apparently got government to underwrite all its financial risk!

Nice work if you can get it…..

Big changes in the Porridge for a few months.. Off to Dubai!

The Porridge will be intermittent over the next week due to my day job! When I’m not scribbling the Morning Porridge (which I do early each morning) I run alternative assets (private debt, equity and hybrid finance) for Shard Capital in London.

Tomorrow (Covid Test permitting) I’m off to base myself in Dubai for a few months to bring the finance together on a very large project finance deal and through to closure. (It broadly means being diplomatic with the funders and racking up some miles…)

It’s a fascinating deal – and suffice to say I will be looking for a considerable amount of debt (the equity is pretty much done..). I will write it all up for the Morning Porridge in due course. I should be set up in the new office Wednesday and back up and running. I’m looking forward to get a slightly different perspective on the world….

Out of time, off to find a Covid Test, then do the Day Job

Bill Blain

Strategist, Shard Capital