Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

In this newspaper we spotlight the work of the rich and powerful. Business and political news dominates. We forget, usually, that this world of shiny workplaces and frictionless lifestyles is made possible by the unseen, underpaid work of millions of office cleaners, refuse collectors, domestic staff — and sex workers.

Hard Graft: Work, Health and Rights, at London’s Wellcome Collection, puts a long overdue spotlight on these forms of physical labour. The space is divided into three zones headed “The Plantation”, “The Street” and “The Home”. These sections reflect locations of physical labour, starting with enslavement on plantations, and their legacy today; passing through the street — traditional site of sex work and refuse collection — and finally into the home, where domestic workers may be trapped in modern slavery. Each of the three areas is bounded by latticed timber walls, generating an impression of inside/outside spaces, enclosure and freedom.

The exhibition brings together unexpected combinations of art and artefact to make new connections in the viewer’s mind about power, resistance, racialised oppression — and the effects of hard labour on individuals. Items in the show span the early 19th century to the present, from a slide rule (1823) used to calculate treadmill productivity in prisons, to a new multimedia installation by Moi Tran, “Care Chains, Love Will Continue to Resonate”, made with the participation of 12 domestic workers in the UK.

These connections are subtle — nothing is forced upon the visitor. The inclusion of many of the objects is anyway self-evident (late 19th-century photographs of night-soil workers in China; thumbnail portraits of early 19th-century prostitutes with their names and charging rates). And there’s a big name among the emerging art talent: a series of nine pictures (of tools) by Turner Prize winner Lubaina Himid, subject of a Tate Modern retrospective in 2021/2022.

There’s hope here, as well as anger and misery. One of the show’s strands follows the long history of collective action in response to exploitative employers, as well as spotlighting the physical and spiritual healing practices shared among enslaved and marginalised communities.

Reflections of resistance that caught my attention included a range of 1970s “wages for housework” campaign badges and a joyful 1967 painting, “Daybreak — A Time to Rest”, by the African American artist Jacob Lawrence. (This piece is on loan from the National Gallery of Art in Washington DC, and in the UK for the first time.) I loved a wall of portraits by Charmaine Watkiss, a Black British artist interested in the herbal healing traditions of Caribbean women. The show links Watkiss’s work back to the medical knowledge that enslaved women shared, pairing the exhibit with a book by the pioneering 17th-century German-born botanical artist Maria Sibylla Merian. Going further, we learn that while researching in Dutch Guiana, as the objects catalogue points out, “[Merian] had direct contact with enslaved workers . . . her writing and social status were complicit and benefited from slavery.”

The centrepiece (and for me, the highlight) of the exhibition is a site-specific commission: a room-filling model of a church. Closer inspection reveals that it’s two different churches. The interior of Lindsey Mendick’s “Money Makes the World Go Round” installation represents the Saint-Nizier church in Lyon and the Holy Cross church in St Pancras, London. Both were occupied by sex workers in landmark protests — in 1975 in France and 1982 in London. It’s playing with our notions of churches as sanctuary and safe spaces. I had no idea about this hidden history of resistance. Mendick collaborated with members of SWARM (Sex Workers Advocacy and Resistance Movement), a sex workers’ collective, in making it.

Around the front, inside the church, there are rows and rows of ceramics — for example, a yellow danger sign of the sort used to warn of water spillage instead reads: “Danger: Death by strangulation is an occupational hazard”. One could spend a long time here, examining each ceramic and listening to the “sermon” by the writer Mendez, author of the novel Rainbow Milk, about their past experiences as a sex worker.

The “graft” in the title of the show will mean “work or physical labour” to a British visitor. But “graft” in American English has evolved into something darker. The Columbia Journalism Review points out that: “Around 1865, the OED says, ‘graft’ in the US was ‘The obtaining of profit or advantage by dishonest or shady means’.” Much of Hard Graft could also fall under a US meaning of the word. Many abuses of power are depicted here. One of the most simple and effective is a display of architectural floor plans from South American villas. Daniela Ortiz shows how tiny the maids’ rooms are — little more than cupboards — when shown alongside the owners’ vast living spaces.

Everything in this exhibition is far removed from “bullshit jobs”, as coined by the late David Graeber. These, broadly, are desk jobs where knowledge workers fill hours with the emails and instant messaging that, along with neverending meetings, make up the displacement activity done in lieu of meaningful work. Many of the contemporary workers depicted in Hard Graft make a difference in ways that most of us will never do.

I’ve no wish to undermine the seriousness of mental health conditions that affect far too many workers of all types, but this exhibition also reminds those of us who work behind desks that the toll of physical labour is paid with the body. It’s a reality embodied in “Washerwoman” (2018) by Shannon Alonzo. A woman is slumped, headless, over a tin bath of washing. Her dress is made from clothes pegs and her hands and feet are gnarled and calloused — it’s almost painful to look.

On leaving the building, I reflected that I was five minutes’ walk from the thriving primary school where I serve on the governing body. Many of its pupils have parents working hard to survive on very low incomes in the centre of one of the most expensive cities on earth. The reality of hard labour deserves, and receives here, honour — and long overdue recognition.

To April 27, 2025, wellcomecollection.org

Isabel Berwick hosts the FT’s ‘Working It’ podcast and writes a weekly newsletter about the workplace and leadership. She is author of ‘The Future-Proof Career’

LABOUR’s pension tax raid is set the ditched after warnings it would hammer up to a million teachers, nurses, and public sector workers.

Chancellor Rachel Reeves had planned to raise funds by reducing tax relief on those earning £50,000 or more per year.

1

But Treasury officials reportedly told her any move to cut the 40 per cent tax relief on pensions would unfairly punish state employees on modest incomes, like a nurse earning £50,000 who could face an extra tax bill of £1,000 a year.

One Government insider blasted the idea as “madness,” especially after public sector workers just received a pay rise.

Former Pensions Minister Steve Webb told The Times: “I don’t think this is something that Reeves will want to do, not least because it will infuriate public sector unions just weeks after the government agreed pay settlements with them.”

Union leaders are also understood to have cautioned the Treasury against moving forward with the proposal.

Chair of the British Medical Association pensions committee Vishal Sharma said: “Attacking our pensions in this way would completely reverse this progress by once again taking money away from doctors in a different way.

“‘Not only would this negate the recent hard-won pay rises but it would likely reignite the recent pay disputes that have been seen across the NHS.”

The plan has been compared to Labour’s earlier disaster of a proposal to bring back a lifetime cap on pension savings, which was ditched during the election campaign after backlash over its impact on junior doctors.

With Labour still desperate to plug a £22 billion hole in the public finances, Treasury officials are now hunting for other ways to rake in cash.

The Government has repeatedly cautioned the Budget on October 30 will involve “difficult decisions” on tax and spending.

A range of options for generating tax revenue have been touted, including increasing capital gains tax.

CGT is a tax on the profit made when you sell or dispose of an asset, like property or shares, for more than you paid for it.

You only pay tax on the gain, not the total amount received from the sale.

There may also be a temptation to make changes to inheritance tax to target the most wealthy.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Southern Water, the heavily indebted utility controlled by Macquarie, has turned to investors for nearly £4bn in borrowings over the next five years at a time when water companies are under increasing pressure in debt markets because of the crisis at Thames Water.

Thames Water, which itself was formerly owned by Macquarie, was last week downgraded to the lowest reaches of junk because of its dwindling cash position, increasing further scrutiny on other utilities in the sector with strained finances.

While Southern is not in the same degree of financial peril as Thames Water, its investment-grade rating and its debt covenants have both come under pressure as the group’s total debts have exceeded £6bn, according to its most recent group accounts. Of that total, liabilities related to derivatives have ballooned past £1bn.

The yield on Southern’s short-dated bonds, due in 2026, has more than doubled over the past six months to reach 13.5 per cent, as investors now require a hefty premium to hold debt that would usually offer far smaller returns due to its near maturity.

The water monopoly, which serves 4.7mn customers in the south-east of England, met bond investors in recent days to update them on its credit situation and business plan.

In a presentation to debt investors published on its website, it revealed it planned to raise £3.8bn of debt over the next five years, telling them it had a “proven track record of capital raising”, having raised £550mn of fresh equity from Macquarie in the last financial year.

The utility also needs to raise £650mn in equity as pressures mount on its credit ratings and operating business, which is struggling with sewage pollution and potential water shortages.

The investor presentation comes after Moody’s in July put Southern’s credit rating on review for downgrade, putting it at risk of losing its investment-grade status with one of the major agencies.

Despite Macquarie having already injected hundreds of millions of pounds, “there is no certainty that it would make further contributions if the final determination makes continued low returns likely”, Moody’s said.

Southern’s chief financial officer Stuart Ledger said at the time of the downgrade that the utility had “an excellent liquidity position”.

However, in August 2023, the company’s lenders had to waive a loan covenant breach after its credit ratings and its interest coverage ratio, a measure of a company’s ability to pay its debt, fell below key thresholds.

Lenders agreed to waive these conditions until 2035, meaning Southern can continue to draw down all of its available borrowing facilities and raise new financing, while also allowing the utility to increase the limit on its gearing — a critical measure of debt-to-equity — from 74 to 75 per cent.

Within Southern’s complex structure, the regulated operating company, a “ringfenced” group that is supposed to be protected from stress at the holding companies above, is nevertheless running with gearing of about 70 per cent.

While lower than Thames Water’s gearing of about 80 per cent, the £4.7bn debt pile at Southern’s operating company, which makes up the group’s reported debt-to-equity ratio, leaves out almost £1.2bn of liabilities relating to its inflation-linked swaps.

These are not reported in the utility’s regulatory numbers, but if included, they would take the company’s gearing level to more than 85 per cent. Were the company’s creditors to demand a payment acceleration upon a default, Southern Water’s inflation-linked swaps would rank ahead of principal and interest on its senior debt.

The presentation also shows that Southern is asking water regulator Ofwat to allow it to increase the average annual household water bill to £734 by the end of the next regulatory period, higher than Thames Water and three other water companies cited as comparisons.

Thames Water, which saw investors backtrack on a commitment to provide £500mn of equity in March, became the first regulated water utility to lose its investment-grade rating when both Moody’s and S&P cut its credit rating.

While an equity injection at Southern Water from Macquarie could ease pressure on its operating company, its holding company also has £300mn of debt maturing next year. Representatives of Macquarie told investors at the meeting that it might need to negotiate an extension on this debt, according to one person who attended.

Thames Water’s holding company Kemble, which itself was established by Macquarie during its 2006 buyout of London’s water company, defaulted on its own debt in April, after its present shareholders backtracked on a pledge to put in fresh equity into the business.

Southern Water said the group had strong liquidity and was working towards a positive regulatory settlement. Macquarie declined to comment.

Dynamic Planner has announced a new CRM integration with Adviser Cloud.

Financial advisers who use the new integration will be able to “seamlessly transfer client records easily, efficiently and securely” between Dynamic Planner and Adviser Cloud.

Data is passed between the systems, with Adviser Cloud validating all data, removing the need for rekeying, which minimises manual errors and saves time.

Dynamic Planner chief revenue officer Yasmina Siadatan said: “The Dynamic Planner ecosystem is continuously expanding and today we are pleased to announce another two-way integration, this time with Adviser Cloud. This will be a game changer for anyone using Adviser Cloud and Dynamic Planner, providing a seamless user experience.

“As the latest in our growing suite of strategic partners, this new CRM integration with Adviser Cloud will continue to transform the processes of financial planning firms and drive significant efficiencies.  Integrations are fundamental for our clients and we are committed to our long-term strategy of continuously enhancing the flow of information to and from Dynamic Planner as the system of record.”

Adviser Cloud tech lead Ewan Humphreys added: “Our integration with Dynamic Planner is designed to make financial planning simpler and more efficient. Adviser Cloud has always focused on providing intuitive, user-friendly software for financial advisers, and this integration continues that mission by eliminating data rekeying and enhancing workflows. This partnership enables advisers to deliver even better client experiences while saving time and reducing operational costs.”

Adviser Cloud specialises in intuitive and easy-to-use software for IFAs, designed to reduce costs, increase efficiency, and deliver an exceptional client experience.

The writer is chair of Rockefeller International. His latest book is ‘What Went Wrong With Capitalism’ 

Economic populism is a body of ideas, often random and irrational, crafted to win over frustrated voters. It tends to be good politics, bad economics, and it’s having a moment in the spotlight. As US presidential candidate Kamala Harris vows to subsidise home buyers and punish price gougers, her rival Donald Trump offers universal tariffs and “no taxes on tips”. Such slogans poll well but are likely to backfire if implemented, raising this question: are there populist ideas that can lift the economy and still win votes?

Here’s one missing in the campaign so far, that fits nicely on a bumper sticker: No More Bailouts! Doling out dollars by the hundreds of billions in 2008, and trillions in 2020, state rescues have helped incumbent companies, undermining competition and productivity. Bailouts are the new trickledown economics, claiming that everyone gains from benefits for the rich and powerful, but in the end only fuelling a sense that the system is failing and unfair. 

The US government has developed a suite of bad habits in recent decades, including more state spending in good times and bad covered by more borrowing, thus almost quadrupling US public debts as a share of GDP. Stopping this snowball would, however, require capping Social Security and Medicare — middle-class entitlements that are so popular neither party dares touch them.

Bailouts, in contrast, are generally unpopular, and capping them would at least moderate the escalating crippling debts and related dysfunction. These rescues are slowing productivity growth by supporting corporate deadwood, clogging the system with barriers that prevent newer companies challenging the entrenched.

In 2008, the authorities injected taxpayer money into giant banks while letting community banks fail by the dozens. The public reacted angrily, compelling Congress to rule out that type of rescue. Then the pandemic hit, and authorities found new ways to pump money into financial markets, and into banks and corporations whether large or small, distressed or not.

In 2023, the economy was in recovery, yet losses at two smallish banks (Silicon Valley and Signature) triggered new bailouts, justified by fear that letting depositors suffer could cause “another 2008” — a systemic meltdown. Every bailout deepens the faith of investors that government will always be there to backstop their bets, which inspires them to take more risk, making the system more fragile — and for authorities, justifying ever bigger, quicker bailouts.

Disrupting this doom loop requires resetting expectations of state relief before the next crisis hits. Companies need to know that losses will not be covered by the state, so their risk-taking becomes more rational. This is not as radical as it may sound, since modern bailout culture is so new.

In its first 200 years, the US organised relief for banks and corporations only twice, in crises of the 1790s and the 1930s. The next bailouts were delivered amid the shocks of the 1970s, for select companies such as Penn Central and Chrysler, over fierce resistance. Critics asked why a democracy would single out a few big corporations for help.

The first bailout of a major bank, Continental Illinois, came in 1984. Later that decade came the first industry bailout, in the Savings and Loan crisis, and the first pledge of official support for financial markets — from Federal Reserve chair Alan Greenspan. By 2008, relief spending reached its no-limit maximalism.

The time to slow this momentum is now, before it does more damage. Since bailouts have undermined the dynamism of the economy, they should be doled out less frequently and tilted towards small enterprises, the main engines of job creation. Authorities do need to stabilise markets in distress, but with a sense of balance.

Increasingly, bailouts are indiscriminate, nurturing “zombie” companies. Authorities would do well to recall Walter Bagehot, the father of central banking, who argued that aid should be used to help solvent businesses endure passing storms, not to keep failing ones alive indefinitely.

Fearful of the fragility they have created, governments now vow to err on the side of spending too much, to prevent a depression. The result in 2020 was way too much relief for too long, driving up inflation, debts and risk in the economy. The size of bailouts should be based on need, not deliberate excess.

The alternative: increasingly financialised capitalism that favours the established, leaving angry voters vulnerable to cynical populism. The answer is practical populism, starting with a call to contain the bailout state.