Did you notice White Elephant Week? There was a veritable parade of these unendangered animals over the last seven days, all displaying the common characteristic of an appetite for cash that befits their size, and an inability to produce anything worthwhile.

First came the wonderful salute to a lost empire that is the Queen Elizabeth aircraft carrier. Conceived as a job-creation exercise for his Scottish homeland by Gordon Brown,  this magnificent ship may one day boast some aircraft, if they are not needed for the air show industry. Given the cost over-runs and the plunging pound, it’s unlikely the UK would be able to afford more than a couple of the 42 F35s on order. That would be one for the Queen, and another for the Prince of Wales, her sister ship promised for 2020. But chin up. Mark Cox calls them “a cause for celebration”.

Next comes the dear old jumbo that is Hinkley Point C, at this very moment desperately trashing some Somerset countryside in the hope that we’ve started so we’ll finish, even though finish will be sometime or never. Once upon a time, this nuclear power station was going to be generating this year, but this week the operator, EDF, admitted that 2027 is its current best guess. Oh, and it will have to replace the top of its prototype in France quite soon after starting it up. Best of luck with that.

Finally, bringing up the rear comes the baby, the satirically-named Smart Meter. Even when it’s offered for free, one in five of British consumers say they don’t want one. Understandably, they fear cybersecurity risks from devices that transmit their data over the airwaves.

Alas, the meters are neither free nor smart. The cost, between £200 and £300 a pop, will be sneaked into bills in the manner pioneered by green subsidies, in the hope that the electricity companies will be blamed. The meters are almost as smart as the old night storage system, since all they do is tell you how much juice you are using. The experience with water meters, which produce an initial drop in consumption before it returns to the previous pattern, has been ignored.

All these fine animals come with eleven-digit price tags. What a circus!

Off track

Active fund managers are a rip-off. Put your money into an index fund. This is not quite a fair summary of the Financial Conduct Authority’s final report into the fund management industry, but the theme runs through it. Margins are too high, there is no price competition and the real level of charges is impossible to see. Oh, and don’t even think about performance.

Most of this is fair comment but trackers, currently multiplying like viruses, are hardly any better. They cover ever more exotic sub-sections of the markets, making consumer choice almost as hard as picking shares. They must churn their portfolios to balance buyers and sellers and changes to the index they are tracking. Underperformance is inevitable.

The index constituents are themselves selected by an arbitrary, and sometimes opaque, process like that which embarrassingly propelled ENRC into the FTSE 100. That the industry needs reform is clear from the two pages of funds listed in the FT, many of them chasing the same occupants of the preceding half page of our share service.

The FCA report has summarised the problem, as if we didn’t know. It has also exposed the murky world of investment consultants, which richly deserve to be despatched to the Competition and Markets Authority. The whole industry would work better for its customers with disclosure of real costs and better governance inside the funds, but encouraging investors into trackers is merely a counsel of despair.



Philip Harris, 57 years in the business, retired from Carpetright in 2014. His son, Martin, followed him into carpets in 2015 with Tapi, opening next to the most profitable Carpetright stores. Its current chief executive, Wilf Walsh, reported some grim figures this week, explaining: “They’ve not opened against the stores that don’t make any money.” Wilf, you haven’t quite got the hang of this, have you?

This is my FT column from Saturday.