24 Jan 2021

Change is inevitable and continuous. It is the journey of human life. We can try to preserve what matters to us – our fitness, for instance – but change has an unbeatable ally – time. In the end, change is both inevitable and fatal.

For that reason, the promise that change can be controlled is very seductive. Convincing us that this promise is deliverable attracts those who would exercise political or financial power over us. 


Some politicians and campaigners pledge to deliver change as an improvement – others to block or reverse it where they see it as bad for us. In each case they are almost certainly over promising by implying that controlling change is in their power. 

Nonetheless, at times the public has an appetite for the idea that a government can deliver destiny. Then, perhaps, disillusion sets in. There certainly appears to be a cycle by which the message of change becomes more and then less popular.

In the UK 1959 election the incumbent Conservatives campaigned on the slogan “Life is better with the Conservatives, don’t let Labour ruin it”, often summarised as “You’ve never had it so good!”. The voters agreed.

But the change hounds, who can come from left or right, were back in the game in 1964. The Labour manifesto was titled “The New Britain” and its leader Harold Wilson became associated with the phrase “The white heat of technology”.

In 1970 Labour was expected to win for the third time in a row and was by now warning against change. “Now Britain’s Strong – Let’s Make it Great to Live In” failed to make the grade, even against a pretty bland Conservative party (slogan “A better tomorrow”).

In 1979 the Conservatives were undeniably the party of change with the famous “Labour isn’t working” poster. 

Fast forward to 1997 and the Conservative were in full change denial again. Their slogan was “New Labour, New Danger” and they were obliterated by Tony Blair and his campaign song “Things Can Only Get Better”.

For a while politicians like Blair and Barack Obama sold change as something progressive. The implicit message was that we are all sinners who need to be led to a new Promised Land. They were effectively preachers.

Perhaps there’s only so much preaching that people can take. And there was a perception that both Blair and Obama changed very little and largely protected the interests of their own natural supporters (pejoratively known as “the metropolitan elite” and “The Swamp” respectively).

So-called populist movements like Brexit and Trump rebelled. The change they promoted was about reclaiming the interests and rights of the overlooked or the “left behind”. Hence Take Back Control and Make America Great Again. As we know, the resistance was tremendous. It took four and a half years to achieve Brexit and Trump’s legitimacy was challenged from the first day to the last.


In the commercial world if there is a cycle it is much longer, measured in decades or even centuries.

One hundred years ago, the Dow Jones Industrial Average consisted of companies producing steel, copper, automobiles, locomotives, rubber, sugar, leather, corn, cans, electricity and telephones. Apart from Tesla’ futuristic cars, none of these industries would be said to be powering the economy now and change is more of a threat than a promise to them.

To a remarkable extent 21st century life has been influenced by new technology-based companies that were once referred to as “disrupters”. Amazon, Apple, Facebook, Twitter, Google, Netflix and recently Zoom have laid to waste many 20th century business models. 

Their success has been such that they now have much to defend. The last thing the disrupters want is any new change outside their control. The greatest asset a successful and established business can have is barriers to entry. In some cases barriers to entry involve expertise that is impossible to imitate but more often it is simply a question of scale. 

The silent friend of scale is ironically the very process that seeks to control it – regulation. The fund manager Terry Smith is pleased to explain that this is why he owns tobacco companies. The hostile environment that persecutes and taxes the distribution of tobacco is as close as you can get to a perfect guarantee that there will never be a new market entrant.

You can see now that as people call for Twiiter and Facebook to be regulated, or to censor their own customers to avoid the threat of regulation, the influence and immovability of those companies is being confirmed. 

It seems obvious why almost all big businesses in the UK were so keen on staying in the EU. Box ticking, preferably with plenty of legal expertise thrown in, is a big headache for new competitors to old businesses. 

You will see many references to change on corporate mission statements but it will typically be outsourced to firms of consultants whose implicit brief is defensive. Nothing demonstrates this better than the recent rush by big corporations to demonstrate diversity. And bear in mind that complicated diversity rules are another barrier to entry against new competition. 


In the UK and much of the first world, it seems as if human rights are becoming subservient to the perceived needs of the planet. 

The climate is experiencing change of a bad kind (it’s out of control and it’s your fault) and the solution constitutes a kind of search for the past, before the industrial revolution. Were Extinction Rebellion to rename themselves Conservatives Against Capitalism they would perhaps be more honest. Climate activists deplore the changes that have resulted from capitalism and wish us to return to simpler, purer times of community Morris dancing and high infant mortality. 

Ecologists have never been found only on the political left – James Goldsmith and his newly ennobled son demonstrate that. Anyone with a taste for authoritarianism can find some appeal in the Green agenda. According to the XR website, the movement has no time for parliamentary politics, as you would expect, but no time for identity politics either. There is no lefty virtue signalling here. They don’t want your vote, they want your obedience.

It is fashionable and probably correct to say that the Covid pandemic and lockdowns in particular have accelerated changes that were going to happen anyway. These are positive for the technology-based companies referred to earlier and largely negative for travel-based businesses, especially airlines. But the distinction between supposedly inevitable change and imposition has eroded towards the point of invisibility.   

You will remember that the Conservative party won an 80 seat majority in the December 2019 general election using the slogan Get Brexit Done. If you read the 59 page manifesto you will find one page (55) about environmental issues. There is one sentence about cars.

We will consult on the earliest date by which we can phase out the sale of new conventional petrol and diesel cars.

Subsequently, in February 2020 there was a consultation looking at banning the sale of electric and diesel cars by 2035 (instead of 2040 as previously proposed).

And then in November 2020 it was announced that the ban would be imposed from 2030.

I don’t think that anyone could seriously claim that the electorate gave the government a mandate to do that on the basis of that single sentence on page 55 on the manifesto. 

A more immediate war on cars was started apparently from nowhere across much of London in June last year. Roads were closed to traffic, almost without notice, and declared to be cycle lanes. This has caused a volume of protest rarely seen in these days of lockdown. Again, there was no mention of the intention to do this in the manifesto of the party that won the election.

We all understand that politicians after our votes either promise change or its reversal. We have a choice about whether we treat such pledges with enthusiasm or suspicion. Sometimes we enthusiastically denounce the politicians that we dislike (sometimes too enthusiastically).

We also understand that businesses after our money make big promises to improve our lives with their products. However susceptible to advertising we are, essentially we can still choose whether to buy or not to buy. And if it pleases us to complain about “big business” but buy its products anyway, so be it.

By contrast, Extinction Rebellion and Black Lives Matter (“Implement mandatory diversity and inclusion training for all”) wish to impose their views. No doubt the facility of social media to enable mass personal attacks on individuals aids their causes. 

So we should be aware that threats to our rights and civil liberties come from those who claim to occupy the moral high ground. They think they understand the common good better than you and I do and they feel justified in imposing their own changes. 




Trying to invest in the outcome of elections is gambling. I sometimes have a modest bet but for fun only.

Investing in business change is very difficult but potentially fortune-making. It needs insight, foresight and luck but the odds say that it’s worth trying from time to time. If I knew anything useful I would share it as soon as I had invested myself.

Making free market investments in imposed change is something of a contradiction. Especially when those changes are at the behest of anti-capitalists like XR. That having been said, reversing the nineteenth century without dramatically shortening life expectancy is going to cost a lot of money. And some businesses will, to employ an appropriate phrase, clean up. 

I am looking at a rather counterintuitive candidate. 

Half of Rolls-Royce revenues come from selling engines and services to the civil aerospace industry. This probably explains why its shares were down by 80% at their low point last year (in October).

On 1 October R-R launched one of those rights issues priced at terms low enough to demonstrate that it absolutely had to succeed. New shares were offered at 32p against a pre-announcement share price of 130p. This raised £2 billion along with another £1 billion from a bond sale. 

The seriousness of the company’s position was demonstrated in the results for the first half of 2020 when the company burnt through £2.7 billion cash leaving it with net debt of £9.7 billion.

Along with some cost cutting and some disposals the company’s financial survival should be ensured for the foreseeable future. This allows an investor to take a view on its future prosperity without constantly worrying that the floor will fall away.

It is quite likely that civil aerospace will recover at some point. I wouldn’t want to bet on any particular airlines but whoever pulls through will still need aeroplanes and, despite the prospect of planes one day being powered by electricity, I am willing to bet that most of them will need jet engines for a while.

More interesting is that R-R is the leading industrial company in the Nuclear Advanced Manufacturing Research Centre. This consortium aims to have its first small modular reactor operating by 2030.

Long term, the aim is to have 16 reactors by 2050.

Given the fact that most of the UK nuclear power industry is ageing and due to close by 2030, there has been much unhappiness about the cost and tardiness of replacement: in particular Hinkley Point C which is supposed to be built and operated by the French company EDF and part funded by China. It is easy to imagine that were the UK consortium to offer a viable alternative, any British government would jump at it.  

To achieve net zero, society needs a huge step-up in power generated from alternative sources like nuclear power. The UK government has committed 215 million pounds for a four-year development programme for our small modular reactor consortium.

Warren East Rolls-Royce CEO 11 December 2020 (analyst meeting transcript)

This is an interesting story that might develop well for Rolls-Royce shareholders.

The current government wants to decarbonise everything that moves and doesn’t move (even central heating). It seems likely that the belief that electricity is the answer to everything will lead to the realisation that sun and wind will not carry the burden – not even close.

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