Motor finance compensation in doutbt, Thatcher aide on 'No. 10 North' and: what is co-living?

The financial conduct authority has suspended parts of its £9bn motor finance ruling after a venomous response from industry and consumer groups. Senior City Reporter Sam Norman has the story. 

Meanwhile, Politics and Economics Reporter Mauricio Alencar speaks to Margaret Thatcher's former private secretary about Andy Burnham's plans to build a 'Number 10 North'. 

Plus: The City AM quarterly magazine is out, and we're joined by one of its editors, Adam Bloodworth to explore what co-living in London actually is. 

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Transcript

SPEAKER_05 0:00

This is a City AM Studios production.

SPEAKER_04 0:04

Hello and welcome back to Business as Usual with me, Martin Kimber. And me, Matt Kenyon. Coming up on the podcast today, motorists may miss out on compensation as the City Watchdog U-turns on a chunk of its landmark motor finance ruling.

SPEAKER_05 0:18

A former senior civil servant in Margaret Thatcher's administration gives us her view on Andy Burnham's plans for a number 10 in the North.

SPEAKER_04 0:26

Plus, we get stuck into the latest edition of the City AM magazine with one of its editors. Happy Friday, business as usual fans. We've made it to the end of another week. It looks like we are heading into a fairly glorious weekend, but don't you worry, we have got some cold, hard corporate news for you to see in the weekend.

SPEAKER_05 0:46

That's a way to set up an episode. There you go. Everyone's gonna keep listening now.

SPEAKER_04 0:50

So the Financial Conservative Authority, the most summary of all the watchdogs, the City Watchdog, it has uh announced this week it's suspending uh parts of its £9 billion motive finance ruling. This was after a pretty venomous response from industry and consumer groups. It's been a big topic. It's one which has been, uh I would say, a hyperfixation of our senior city reporter, Sam Norman. He joins us now. Sam, it must be such a dream come true if we're talking about motive finance.

SPEAKER_03 1:19

Well, yeah, there was that sense. So uh for those of you who don't know, this is something that relates to the idea of a secret commission deal between car brokers and lenders that left consumers out of the dark. So it was this ruling that if the consumers weren't aware of how much commission the brokers were getting, it was illegal. And yeah, this traveled all the way up through the court system. It went to the Court of Appeal who gave a massive ruling, shockwaves across the city, as they um ruled in favour of the consumers. That was eventually partially overturned by the Supreme Court, but sort of upheld it for the uh for them as well. It was a real real lukewarm win for the banks, and it left the door open for this industry ride rejust scream. And uh we've seen over the last year um just back and forth on this, and now uh yeah, forced us to spend parts of it.

SPEAKER_04 2:03

So I suppose where do the biggest parts of the backlash come from? Who was most incensed by the original uh maintainers?

SPEAKER_03 2:13

Well, it it was funny enough, so there's a real split between this. You've got the industry group, so people who are exposed to this, you're thinking Lloyds, you're thinking Santander, uh, Close Brothers, a specialist motorfinance lender, but you've also got manufacturers who have their own financial services arms. So this is Mercedes-Benz with their financial services arm, Volkswagen with their financial services arm. So the banks actually, so Lloyd's is uh on the hook of two billion pounds with this, they don't want this to go for another legal challenge. They just want it to get it out of the way, they're ready to pay up. The manufacturers who aren't really used to these mass-scale redress things, they want to challenge this. They want to bring their overall bill down. Now, on the flip side of this, the consumers, they don't think the redress has gone far enough. They think they're owed more. So the actual redress, I think it averaged out £829 per consumer uh for what the payout they were gonna get. They want more. So no one's happy. No, no one's happy. Um the FC is actually facing four legal challenges. Three are from manufacturers, they include Mercedes-Benz and Volkswagen, and one is uh a big group one from Consumer Voice, which is representing a bunch of motorists who believe they should be getting more money. So, regardless of what way this goes, I don't know how this scheme can carry on as it is, but this scheme was already a negotiation and a watered-down version of a previous one that they tried to do in October last year. So this was like the final rules it published in March, and no one's happy.

SPEAKER_05 3:31

What is it about this particular redress scheme? Because there are always sort of lawsuits that then open floodgates that then leave the floodgates open to more lawsuits about certain issues. What is it about this that keeps it just rumbling on and on and on?

SPEAKER_03 3:45

I guess it just must affect everyone. Like, I think of how many motorists there are in the UK and the the time span for what this covers, it's it's a decade, it's a decade window of people who didn't even realise, and still to this day, people don't even realize if they're exposed to it. I mean, you must have seen the marketing campaigns that some of these law firms go on. I I don't drive, and I have texts once every couple of days saying you could be owed compensation. So you just get unsolicited text. Yes, it happened all the time. You don't drive. I don't drive.

SPEAKER_04 4:12

Is your number on a list somewhere? Like, how's how why are you doing it?

SPEAKER_03 4:15

Maybe that's maybe that's a separate problem. Um YouTube ads, and maybe I've just got like the cookies of where I'm always Googling Motorfinance. I get the ads for it too. But the FCA has actually gone on the offensive and um has threatened to really crack down on some of these firms that are aggressively marketing to consumers that they can abandon the scheme and come through them and uh they'll get the full compensation. It's a real back and forth from so many players, from the manufacturers to the banks to the consumers to the motorists. It's it's there's so many moving parts.

SPEAKER_04 4:45

In slightly uh happier news, uh, let's talk about curries. Uh, they've just posted some pretty encouraging looking results. Some bright spots.

SPEAKER_05 4:53

Curries and jing. Yeah, Simon Hunt would have made that worse.

SPEAKER_04 4:57

So Simon Hunt would have had a retort uh with a sort of a quintuple pun. Can you compete with the same thing?

SPEAKER_03 5:02

Possibly even compete with that. But you know what? It is some positive news. I mean, there's no secret, I think the high street has been a pretty bruising time with consumer sentiment, and especially this first six months of this year. I mean, basically all the start of this year was VRM War and how that damaged sentiment. But Curries themselves have said uh they've had stronger sales, and I think their quote was in a subdued consumer backdrop, which is quite encouraging. If they're saying, yes, we know it's bad, but it's good for us.

SPEAKER_04 5:25

It's interesting with Curries. What do you think has made because in my head, if I'm ranking all of the shops which I think will be struggling most, I always instinctively think that hardware electronics shop should be doing quite badly. What is it about their approach which has made them weather the storm?

SPEAKER_03 5:42

There's a few moving parts. I think the demand for AI tech is is has really been a big factor in this, and that's what Curries has put it down to. And also a lot of gaming launches. So um Martin, you maybe you'll know this one. The Nintendo Switch 2? Yes. Is that this year? Oh, that was that came out last year.

SPEAKER_05 5:56

So is that a sequel to the Nintendo Switch? Yeah, yes, yes, for the computer games, Matt. Computer games. Um but I think one thing that that um Curries does really well is their TV competitions. Like I won a TV from Curry's uh during the last football thing that was happening. Uh I know there's a football thing going on now. There is. Um but I I there was a one in there was a one in twenty chance of winning your money back if you bought a television during the uh World Cup. And I did, and I put my receipt number in and I won a grand's worth of telly back.

SPEAKER_03 6:32

So you know what? Ironically, uh in the results over the last year, every category grew apart from consumer electronics, and Curry's put that down to soft demand for TVs. So maybe if they stopped giving so many away for three, they'll stop like yielding TVs.

SPEAKER_05 6:45

Right. Very quickly, um speaking of football, now I was on the train on Wednesday when the England match began. Very patriotic. Uh but I I watched it though on a television, on my free television. Uh, and and I was surrounded by people on their phones watching the England game on the train. Now, apparently I wasn't the only one.

SPEAKER_03 7:06

Yeah, I think I think it's an interesting up to come because we've got this uh new research uh from O2 that's showing uh highest ever mobile traffic during the England game. Uh it's no surprise, is it? I think these sort of companies you forget who's going to benefit from something like a World Cup. I mean, naturally you go to the pubs and think, oh, the pubs are gonna be the biggest beneficiaries, but there's a lot of moving parts to these things.

SPEAKER_05 7:26

Well, uh they've broken it down by app. Oh Virgin Media O2 have broken this down by app. Tinder users fell by 36%. So no one was swiping.

SPEAKER_03 7:37

Uh I've got two hands. Not where I was.

SPEAKER_05 7:42

Um TikTok traffic mostly sort of fell off at kickoff. I mean, they've got all the annual.

SPEAKER_04 7:49

It was five o'clock, so it was a rush hour match where presumably a lot of people who might have been planning to watch it just were caught a bit short.

SPEAKER_05 7:56

Quarter to five, the uh usage for food delivery apps went up to 68% of everyone ordering in their football food.

SPEAKER_04 8:05

And obviously, tipping into this weekend, we've got the the 1am match uh into Monday morning. That is gonna put interesting pressure on a lot of people. So, like the pressure like, do you do you stay up? Do you let your kids stay up? Uh, there are gonna be pubs. I know um our colleague Mauricio was reporting this, pubs kicking people out at half time because of licensing rules.

SPEAKER_03 8:24

Well, I think we just saw on Thursday as well, uh the councils are being the ones now left to decide whether they'd get permission to stay open late. So it's gonna cause widespread mix of what we're gonna get across the country.

SPEAKER_05 8:35

I'm sure all British councils are going to make the pro-growth decision uh in every case. I have full confidence in our local policy. God save the king.

SPEAKER_04 8:44

Will you two be watching the England match on uh crack of absolutely not. Not crack of before dawn on the bottom.

SPEAKER_03 8:50

I'd love to, but there's only one thing I'm more loyal to than uh the England football team, and that is the 7am RM.

SPEAKER_04 8:57

Well, God bless you, Sam, and um well yeah, people can can read all your work at the at the actual crack of dawn on the FTSE Live blog. God said the King, God said the Football. We'll have you back very soon.

SPEAKER_03 9:07

Thank you, guys.

SPEAKER_05 9:10

Now it feels like a lifetime ago that Andy Burnham gave that speech announcing a massive programme of devolution and moving the levers of power out of London. Caroline Slowcock was the private secretary to Margaret Thatcher and worked very closely with her, and she's just published her second book, Bad Government. Our politics and economics reporter Mauricio Allancar caught up with her a little earlier and asked about Burnham's plans for a number ten in the north.

SPEAKER_01 9:36

I think one of the things he's trying to do by devolving more is to kind of join up government because it tends to be very siloed, uh, as you know, people say in the jargon, which means you know it works in different parts and doesn't talk to each other. So um, you know, I think that's his instinct by devolving. But the danger of setting up a number ten in the north is that you you end up sidestepping the rest of government and actually you know the centre of government, one of its critical functions is to join up the way government works, and government, the central government is still going to be there, it's still gonna have an enormous influence on the devolved regions. So I think he may actually find that he has to spend more time in London doing that than he will do in Manchester.

SPEAKER_03 10:17

So he won't deliver on his Oh, I think he will.

SPEAKER_01 10:20

I mean, I think he will try. I mean, I hope, you know, I mean, one hopes is you know, my book starts with uh Starmer's speech on the number on the step to number ten. I was hopeful then. So I hope that these words will come you know to fruition. But I think that uh the job of the Prime Minister is to uh orchestrate the whole of government as well as you know running the country. Uh and you know, Manchester I think is a nice as a nice piece of symbolism, and maybe it will be important. But one of the things about Manchester, because I once had a head office in Manchester and one of my roles, is it's a very hard place to get to from other parts of the country apart from London. Uh, if you're trying to come from the West Country, for example, it's a really difficult thing. So it's not necessarily going to be the best way to communicate with the rest of the country.

SPEAKER_04 11:06

And finally, City AM has the latest edition of its magazine out this week. If you haven't seen it yet, it is going to be all around London. You will see it uh around train stations, all sorts of places, all in public. Um, to speak about it now, we have one of its editors, Adam Bloodworth. Hello, Adam. Welcome to your debut on the podcast. This is my podcast debut. It's very exciting.

SPEAKER_02 11:29

It's very exciting. Thanks for having me and the magazine.

SPEAKER_04 11:31

Well, it's a very exciting addition uh that we've all been we've all been leafing through over um the last week. I know there's quite a few we want to get on to. Um, what's your favourite story in the magazine?

SPEAKER_02 11:40

My the story that I I feel like could have made a nice cover story was the story about co-living and kind of the weird way in which like society is starting to think about how houses don't have to be 2.4 families anymore and how actually people can live together with strangers and live with friends, and that not be a weird quirk or something you do in your 20s, but how it's something you can do in your 30s and 40s and 50s.

SPEAKER_04 12:02

This is such a fun piece. So, this is yourself and also our colleague Anna Maloney went and tried out a couple of co-living spaces. I think you there was one in Canary Wharf, one in Battersea. Yeah. What was that like? Did it sort of challenge any preconceptions you had of what it would be like as an adult going back and doing uni-style living?

SPEAKER_02 12:17

I think like, you know, it's socially acceptable to live in communal living style places until you're 25 at uni. Maybe you're doing a postgrad or a doctorate. And then from 55, there's this big rise in kind of posh retirement facilities where you know older ages, golden year living, and you know, there's huge expenses tied to these places.

SPEAKER_05 12:36

To which I I aspire.

SPEAKER_02 12:38

To which there's there's this sort of 25 to 55 year old gap where it's still stigmatized, and I think now that's changing. Lots of data showing that you know there's a huge explosion in the development of these new co-living facilities. And the the the thing that makes it an interesting story is for most people they do sound like hell on earth. You know, it's dorm-style accommodation. You share a bathroom. You don't share a bathroom, you have a bathroom, you have a kitchen, but your bed sheets are probably gonna smell like sausages if you're gonna be able to get more bacon because your bed is a meter from the kitchen. So me and Anna Maloney, who works on features here as well, um, went and did a couple of weeks in these. We we moved our we they the they came to us and said, we said, look, we'll do it, but we need to stay for a while. We need a proper, we need to bed in. Um and literally. And and literally, and so we spent a couple of weeks living in these places and meeting them. And what was interesting was that there was the kind of village weirdos, there were the there were the kind of there was this village feel that I think you lack when you're when you're sh house sharing in London because of the transience and the fact that everyone's in and out of the time, but the the nature of living in one building with all these people, sort of a bit of a pressure cooker feeling. There was that kind of student campus vibe of like you get to know people.

SPEAKER_05 13:52

And and what is the price benefit to living there versus, say, like an apartment?

SPEAKER_02 13:56

So it's expensive, and that's why again, it's an interesting story because they're not cheap. They're selling the dream of community, and we all know that you know there's lots of horrendously isolated people in London, and they're selling this dream of community that they start from about 1700, 1800 a month, so they're they're not cheap for a box. The room smells of sausages, it smells like sausages, it's an expensive fry-up, sausage smell, it's an expensive fry-up, and the there's a line in from Anna in in we so we wrote it kind of we both shared thoughts on the page separately, conversation style. There's a line from Anna where she's sort of saying, you know, it feels like the room is doing everything it can to get you out and and into the communal spaces, and I think that's fairly accurate. And there's there's rooftop pools, there's saunas, there's cinema rooms that are really luxe. You know, they really are providing this new template for kind of how we can all potentially live together. And I think the bottom line for me was I've always been very extroverted, Anna's quite introverted, so it was quite fun, kind of millennial Gen Z kind of perspectives on this. The bottom line for me was I you know if I moved to Madrid tomorrow, I'd sign me up, I'd do it immediately. In London, there's too much to lose. I I've got great housemates, I'm 37, I still love living with housemates, so that's why it's interesting to me as a story. But uh, there's too much to lose, I think, for me. But it was it's interesting, I can't quite get it out of my mind.

SPEAKER_05 15:14

Well, the good thing about the magazine is that there is a much higher word count in a lot of these stories than there is in a lot of the newspaper articles that you're probably used to reading in City AM. Um, very charitably, you've let Simon Hunt write something, who normally sits in that seat. He asked very politely and we'd be obliged. And he's written about uh falling back in love with the iPod, which I've sort of predicted for a long time would go the same way as the vinyl kind of craze, which is people miss a machine that does sort of one thing. You know, our phones, our computers, their music players, their cameras, I mean they're everything these days. So I mean it's quite a romantic kind of retrospective look at that really awesome wheel that it had, you know, they really did reinvent the wheel and record that.

SPEAKER_04 15:59

And also there's something I think he's written about this, something about the the permanence of just owning the rights to songs. I think that's gonna be a big question. Yeah, well, as as everything, all these sort of marketplaces, be they for like video games or songs. PlayStation, literally, the other day said no more discs. Whereas if that just shut if that server shuts down, or if like my Spotify shut shuts down, then like everything ever curated or collated goes. You've got no ownership over that. You've got yeah, so there's there's something very, very interesting to be said about falling back in love with the iPod.

SPEAKER_02 16:28

Yeah, it's similar to kind of how we publish publishing a photo on on Instagram on a on the grid sort of legitimizes it in a weird way. And in the same sense, owning a song legitimizes it and and makes it feel like we own it and makes it feel like it exists. There's some crazy stats around the amount of I think we don't look at two-thirds of the photos that we um that we take on our phone.

SPEAKER_05 16:48

I do make a point to print them out. I get them printed in about a two size, they're quite big, and I put them up on the wall, and uh, I think that makes them sort of um that makes them worth more.

SPEAKER_02 16:59

Yeah, it's interesting, isn't it? The sort of part of the narrative of kind of how how we make feeling like we own something, feeling like we belong, feeling like we have ownership over something, which is clearly important to us as humans. Um, and yeah, it's a it's a lovely piece as well. Simon writes really, really beautifully, um actually. He's a he's got a really natural style of writing. So um, but do we need to do a quick sell-on kind of the magazine? Yeah, go on.

SPEAKER_04 17:19

I was gonna ask actually, yeah, what what what's your what's your pitch? Because this has been the magazine's been going for quite a while. Was this sort of issue number 90 or 91?

SPEAKER_02 17:27

I think this is 91. It's been going so I actually saw this magazine in about 2017, 2018 years ago, before way before I worked here. And um, I don't know, so it's the I suppose it's nice that it's one of the last sort of freemium magazines you can still find out on the street, you know. You know, boring, boring stuff out there, like you know, the cost of paper is high and astronomical, and most of our competitors can't produce this anymore. So we're really lucky to be able to put out a hundred-page luxury glossy uh magazine. Well, it's actually got this beautiful matte finish, which is quite rare, beautiful masthead. It's a really premium-feeling product for Summit that's free.

SPEAKER_05 18:01

It's gorgeous. And in this economy. In this economy, that's no bad thing. Well, just to end, the absolute bonus feature in this quarter's uh edition has to be Adam Bloodworth on a horse. Which is just Matt Hardy's in the corner there. Can an ordinary bloke Adam playing polo, which is just the best picture. I think we ought to get that frame for the uh for the. Is that inspired by the the latest series of rivals?

SPEAKER_02 18:27

Popularized in rivals currently uh available on your uh favourite streaming platforms. Uh yeah, no, great fun to try and uh do a fish out of waterpiece on like can an ordinary bloke play polo? Uh turns out no. Uh uh spoiler alert, but yeah, really good fun. And there's I think the great thing about this magazine is how eclectic it is. There's just there's all sorts of this food, drink, travel, weird world. We've had love letters to electricity pylons, we've had all sorts of weird stuff in here, and it's it's just a real privilege to be able to deputy edit it. It's it's great fun.

SPEAKER_04 18:55

Well, for God's sake, London, pick it up. It's all over the place. Look for it. It's out there and it's free. Or write to us and we'll send you one. Yeah.

SPEAKER_05 19:03

Adam, thank you so much for having me, I'm sure.

SPEAKER_02 19:05

Thank you so much for having me.

SPEAKER_05 19:06

Well, that's just about all we have time for today and for this week. Thank you very much for listening to Business as Usu.

SPEAKER_04 19:13

If you do just two things this weekend, make them downloading our free app and subscribing to our newsletters. Do that for us. They're both free.

SPEAKER_05 19:21

Well, uh, you won't hear my voice on Tuesday because uh I'm taking a day off. But uh I'm sure Matt and Simon will uh keep you well informed of everything. Don't forget to download our free app, as Matt says. It's just the same as all the expensive ones, except ours is free. Look out on Monday for a special episode of Business as Usual where Maisie Grice, our investment reporter, will be speaking to the UK boss of the biggest brokerage firm in the world, Charles Schwab, about uh the stock market and investing so far this year. So you can hear that at 6 a.m. on Monday. But for God's sake, don't miss it. Don't miss it. But for now, goodbye. Goodbye.