IF: Arbuthnot Latham
Our thanks to Arbuthnot Latham, for hosting our meeting on 26 September 2019. In its early years, the company thrived as a merchant of produce from India, such as cotton, tea and jute. Adapting with the times, it additionally expanded into lending and finance.
From 1994 under Sir Henry Angest, there was a renewed focus on the private banking business on which Arbuthnot Latham’s reputation had been based and having celebrated its 180th Anniversary in 2013, Arbuthnot Latham is one of few merchant banks whose name continues to deliver a secure, high-quality and personal service.
Camilla Dell is Managing Partner and founder of Black Brick Property Solutions and has worked in the London property market since 2002, with estate agents Foxtons and Knight Frank.
She was, she said, “one of the world’s worst employees” and always believed that she could do better than her boss. That might resonate with a few of us but Camilla did something about it. In 2007 she seized the opportunity to create a holistic property consultancy company. Her vision inspired her to set up Black Brick in 2007. During the next twelve years, driven by ambition sheer hard work and determination (deferring the start of her family for eight years), the business has grown from being a two person team operating out of a loft in London’s South Hampstead, to one of the leading independent buying agencies in London and the South East based in Mayfair. The pace of Black Brick’s success has been as swift, but sure. Staggeringly so. Services now include property buying, investing, and managed sales, property management, rental search and a vacant property care service. With approximately 30 to 40 transactions a year, Black Brick has, in its lifetime sourced and acquired in excess of £1 billion of residential property for private clients.
She believes that her timing was fortunate. After the financial crisis clients were nervous about financial investments and reverted to bricks and mortar, and London property was seen as a safe haven. Now 60% of her Clients are overseas, but their origin depends on geopolitical stability. Currently Middle Eastern and US clients seek value in the London market – partly driven by the depreciation of Sterling over the past five years. Not all Clients are enormously wealthy; some may have a budget of as little as £500,000.
Camilla indicated that prices in the London residential market, have fallen by 15-20% since the peak in 2014, but are now levelling off. She believes that property price falls have been more to do with transaction taxes than Brexit. Despite the current climate of uncertainty in the property market she advises “keep calm, ignore the noise, and take the long-term view. It’s at times like these that some of the best opportunities can be found.”
Roger Bootle is one of the City of London’s best-known economists. He is Chairman of Capital Economics, which he founded in 1999, and an Honorary Fellow of the Institute of Actuaries. From 1998 to 2017 Roger was a Specialist Adviser to the House of Commons Treasury Committee. He was formerly Group Chief Economist of HSBC and, under the previous Conservative government, he was appointed one of the Chancellor’s panel of Independent Economic Advisers, the so-called ‘Wise Men’. In 2012, Roger and a team from Capital Economics won the Wolfson Prize, the second biggest prize in Economics after the Nobel.
Roger introduced his book “The AI Economy” highlighting that of the many of the books on Artificial Intelligence ( AI ) the majority have been written by practitioners. He felt it was time for one written by an economist.
There is little doubt, he said, that the Artificial Intelligence ( AI ) revolution is going to transform our lives, and outlined two distinctly different visions: The first, a terrible future – poverty, loss of self-worth, devastating consequences for employment, and even annihilation of our species – as our creation, the robots, take over; the second, a revolution that will enrich us all and free humanity from drudgery.
He shares the latter, and argued that at the root of the former is often a misunderstanding of economics, by those who say that we should consider a world in which robots/AI which cost nothing to manufacture and maintain, and can do anything as well or better, and as fast or faster, than human beings.
Robots and AI are far from costless, and developing and maintaining them costs money. There are, indeed, some things that robots and AI can do, and are already doing better and more cheaply than humans, but there are many other things that they cannot do at all. There are others that they will never be able to do better than humans, and still more that they will not be able to do as cheaply.
We are yet to discover the full range of these things, but we can already make out the major limitations to what robots and AI can do:
First, there appears to be a quality in human intelligence that, for all its wonders, AI cannot match, namely its ability to deal with the uncertain, the fuzzy, and the logically ambiguous.
Second, because of the innate nature of human intelligence, people are extremely flexible in being able to perform umpteen possible tasks, including those that were not foreseen at first.
Third, humans are social creatures rather than isolated individuals. Humans want to deal with other humans. Robots will never be better than humans at being human.
Although robots and AI will replace human labour in some activities, they will enhance its productive capacity in others, he said. Many new jobs that we can now barely imagine will be created. If we manage things properly, the result will be a speeding up of rates of economic growth and productivity, with an accompanying improvement in living standards.
Although he conceded that particular individuals and groups will suffer a drop in demand for their skills and aptitudes, they will not necessarily be those that one might imagine. Robots lack manual dexterity and are unable to move easily between different tasks, so manual labour, for example, will be resistant to encroachment by AI.
The AI revolution will result in an increase in the capital equipment available to workers in the service industries, particularly education and healthcare, which will substantially increase productivity. Increased productivity will present a choice between higher incomes and greater leisure, through a reduction in the average number of hours worked. He believes that ultimately, a four-day working week, will become standard. Spending on leisure activities, will increase as will employment in those industries.
The AI revolution will, he said, release human beings from many of the mundane jobs that have taxed their spirit and eroded their strength and enthusiasm, and in the process leave them free to be more truly human.
Of course, as with many long term economic projections, many of us will never know the actual outcome.
Kate Nicholls is CEO of UKHospitality, which was formed in April 2018 from the merger of the Association of Licensed Multiple Retailers and the British Hospitality Association. It is the voice of the broad hospitality sector – everything from bars, coffee shops, contract catering, hotels, nightclubs, visitor attractions and other leisure venues.
With over 700 member companies its main aims are to represent and promote the sector, share best practice and create an unrivalled networking platform.
Kate stressed the importance of the Hospitality sector. It is a major contributor to the UK economy, employing 2.9 million people and generating £130bn in economic activity, while paying £38bn in taxes. It is the third largest private sector employer in the UK; twice the size of financial services and larger than automotive, pharmaceuticals and aerospace combined.
UKHospitality seeks to unlock the industry’s full potential as one of the biggest engines for growth in the economy. It engages with government, the media, employees and customers,
To promote the sector so the sector and its employees are noticed and treated fairly;
To provide the necessary advice so that the commercial interests are protected
To prevent restrictive legislation or taxation , through lobbying
This week alone she has met; the Home Secretary re: the level of immigration required to meet the demand in the sector; the Brexit committee – reminding us that there is only three days food supplies in the country, and the risk to those supplying meals to the Educational, healthcare and correctional sectors.; the US Ambassador- although she did not disclose why!
She finished with a reminder that it is Hospitality that is the barometer of the economy – not the Retails sector, and what’s more, Hospitality will not be replaced by AI!
Our final speakers were Victoria Lajer, Managing Director of Philately and George James, Head of the Commonwealth Department at Stanley Gibbons, the world’s longest established rare stamp merchant, which was established in 1856 when Stanley Gibbons bought a sack of Cape of Good Hope triangular Stamps from two sailors in Plymouth.
George brought the business of philately to life as he passed around a number of stamps and stamped envelopes. Each encapsulated a fragment of history. Of these the UK’s Penny Black, was the oldest being the world’s first adhesive postage stamp to be used in a public postal system. As the first country to issue postage stamps the UK to this day does not show the country of origin on its stamps.
He showed us a variety of Cape of Good Hope Triangular stamps which were first issued in the colony in 1853, but later demonetised in 1900. He told us how stamps featured in the history of the Siege of Mafeking during the Boer War. During the siege the town ran out of postage stamps and began to issue their own. A corps of cadets mounted on bicycles continued to deliver the mail inside Mafeking while runners slipped through enemy lines to deliver mail to post offices outside from where they could be dispatched to friends and relatives. Some of the homemade stamps were printed with the face of the British commander Colonel Robert Baden-Powell rather than that of the monarch.Queen Victoria, allegedly, was not amused.
Every schoolboy collector of a certain generation sought a Penny Black. So it was of some surprise that the sample that George showed us was worth a relatively modest £450. George highlighted that collectible stamp prices are driven by factors such as Condition, Demand and Rarity, and with 64 million printed they are evidently not particularly rare.
When asked whether collectible stamps are a useful store of value he answered a qualified “yes”, cautioning that individual collector’s interest was unpredictable, and this would impact prices.