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In one of the most interesting UK equal pay cases, a few weeks ago the retailer Next was found to have discriminated unfairly against women working in its stores. The tribunal did not conclude that Next had engaged in direct discrimination (it paid men and women in the same roles identically) but warehouse employees received higher basic pay than retail staff. Retail staff were traditionally mainly women, while warehouse staff were traditionally men. Earlier cases had found the jobs to be of equal value.

The finding of indirect discrimination has raised the hackles of some economists. The UK law was “strikingly Marxist”, said Professor Alex Tabarrok at George Mason University. He and others objected to the assessments that underpin the equal value finding at a time when market forces and online retail have raised warehouse pay relative to retail pay.

In truth, the judgment was more nuanced and the case holds lessons both for economics and law.

Many of the mocking assessments from economists relate to the legal legwork of assessing the value of different jobs — taken too literally, the detail seems absurd. But discrimination happens when the market provides unfair outcomes, so you do need some process to evaluate the respective value of roles.

Economists should lighten up a little. Such assessments have been around since the 1970 Equal Pay Act, which came into force in 1975. Given their longevity, claims they undermine the performance of the UK economy do not pass muster.

But there are difficult questions for the application of the law. And here economics can help. One of the retail store claimants was offered work at a Next warehouse for more pay but turned it down, describing the offer as a ruse by the employer. Economists call this “revealed preference”: a powerful indication that the jobs were not the same. But the tribunal “did not regard [this] fact . . . as of any real significance”. At the very least, it must suggest the equal value assessment might have flaws.

To an economics brain, another highly relevant fact was that over the relevant period, 47 per cent of Next’s warehouse staff were women. This damages the case that warehouse work is predominantly male so pay differences are discriminatory, even indirectly. The law should allow the relevance of these material facts and cross-check the granular detail of assessments.

There are many similar cases trundling through the courts, with supermarkets predominantly in the line of fire. These will also test the “material factor defence”: the need for employers to demonstrate a reason apart from discrimination that different jobs attract different pay. The Next case will be highly relevant.

What has not gained much publicity is that the tribunal found in favour of Next as often as against. Most significant was that the main method for the retailer to bolster pay in its warehouses (and keep it at market rates) was via performance bonuses. This, the judge found, was a material factor in pursuit of the company’s legitimate aims of enhancing business performance and improving productivity. Higher pay for warehouse workers was allowed when labelled appropriately.

In addition, if Next found the outcome too onerous, it could divest its retail or warehouse functions and purchase these as services from another company. Equal pay law requires the claimant and her comparator to have the same employer. A recent court of appeal case allowed The Royal Parks to pay its employees the London living wage while paying contractors less.

It’s important not to jump to conclusions and understand the nuances of equal pay cases. The big picture outcome was reasonable if expensive. It demonstrated that although equal pay law bucks the market, and by design, there are limits and legal ways for companies to differentiate but not discriminate.

chris.giles@ft.com

A CELEBRITY chef’s seafront restaurant is set to close today after three years of business.

Michael Caines has shocked fans after announcing he is selling not just one but two of his popular restaurants.

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Mickeys Beach Bar and Restaurant in Exmouth opened in April 2021 but tonight after dinner, it will close for good.

It offered all-day coffee, drinks, afternoon tea, and casual dining with glorious views of Torquay to Berry Head and the English Channel.

The restaurant was one of the first businesses in Sideshore and loved by many.

Customers on Google Reviews described it as having “a lovely atmosphere”, with “great views”, “seamless” service and “delicious” food.

Now, after three and a half years, it has been sold to someone else.

And not only this, Cafe Patisserie Glacerie, owned by Michael Caines and Sylvian Peltier will close too.

It is believed both restaurants have been sold to another local business, DevonLive reports.

Both venues will close in preparation for the site being sold.

In a statement Michael said: “On behalf of all the team we would like to thank our customers and suppliers for your support, we have thoroughly enjoyed serving each and every one of you and making Mickeys and the Café a special place to meet by the sea.

“I would also like to thank my team for their unwavering support and dedication, despite the challenging times we have had, I am proud of what we have been able to create.

“We are however delighted to announce the sale of the business to another local business operator who shares a similar passion, for fun relaxed dining.”

The Michael Caines Collection of restaurants said it will make another announcement once the sale is completed.

Customers have been redirected to Pool House Restaurant at Lympstone Manor hotel “for casual and relaxed dining”.

Disappointed locals took to Facebook to share their disappointment.

One person said: “Shame. Only decent place on the beach front.”

While a second wrote:  “Good job we grabbed a drink when we did.”

A third person said: “A sad reflection of Exmouth, falling further into poverty.”

And a fourth commented: “Well! We didn’t see that coming!…”

Argentina’s president Javier Milei has said he is not ready to lift the country’s currency controls, arguing that a fixed date for scrapping the measure is incompatible with his “regime of freedom”.

In an interview with the Financial Times, the libertarian economist argued that, for the controls to be scrapped, the country’s rampant inflation had to fall further, among other economic conditions.

“We are not communists, we are libertarians,” Milei told the FT. “There is a philosophical question behind this, which is that I cannot set dates because I don’t think like a central planner. We think in terms of a regime of freedom.”

The controls, imposed by a previous government in 2019 amid an economic crisis, fix the peso at an official rate and limit individual and company purchases of foreign currency, creating a black market for the US currency and deterring foreign investment.

Milei, who devalued the official rate by more than 50 per cent on taking office in December last year, had previously said he hoped to scrap the controls in mid-2024.

The Argentine president has vowed to turn the heavily regulated South American nation into one of the world’s freest economies as part of a radical plan of shock therapy to slash spending and shrink government.

He has balanced the budget, ending years of deficits funded by central bank money printing, and brought down monthly inflation from a peak of 26 per cent last December to 4.2 per cent in August. However, prices have still risen by 237 per cent over the past 12 months.

The price of black market dollars has fallen since July, narrowing the gap with the official peso rate of 980 and leading some economists to suggest the government should seize the moment to scrap the currency controls altogether.

The official rate is devalued by 2 per cent a month, a depreciation that has been outpaced by the rise in consumer prices this year. This has led exporters to complain that almost all of the competitiveness gains from December’s 54 per cent devaluation have now been wiped out.

The country’s economy has contracted for three consecutive quarters.

But, when asked if it was the right time to remove the controls, Milei said, in the joint interview with his economy minister Luis Caputo at the Casa Rosada presidential palace in Buenos Aires: “No, not yet.”

Caputo also questioned the urgency of scrapping the restrictions, saying that while he did not want “to underestimate people looking at currency controls . . . it almost seems childish to focus on whether [they] end in two months, three, five or eight. That doesn’t matter”.

When he travelled abroad with the president, Caputo added, “we always see investors in the real economy and honestly, nobody asks about currency controls”. 

Milei argued the previous government had created an excess of pesos — which he described as a “money overhang” — by printing money and not allowing Argentines to buy dollars freely.

He said the controls could “be lifted when the ‘money overhang’ has ended”, and added that three conditions needed to be met “simultaneously” to do so.

One condition was a fall in monthly inflation to less than 2.5 per cent, compared with August’s 4.2 per cent.

The other conditions would involve domestic banks selling their extensive holding of short-term Argentine government bonds to fund increased lending to companies and provisioning for the pent-up demand for dollars that has built up under the controls.

Milei expressed frustration with investors who demanded to know when the controls would be scrapped, arguing that meeting the conditions largely depended on private sector behaviour.

He added that scrapping the capital controls was not dependent on a deal with the IMF, which Argentina owes $43bn. “We have already begun lifting some of the regulations that make up the controls. And we’re doing all of that by ourselves,” he said.

“If someone comes and gives us a lot of cash, well then yes, we’ll open [the controls] tomorrow. But we are working as if that isn’t going to happen . . . it’s as if we were extremely risk-averse.”

But Caputo added that the government was still considering whether to start negotiations with the IMF on a replacement loan package, which would include fresh cash “to increase net reserves” that would “help to lift the [exchange] controls”.

The economy minister denied the currency was overvalued. “We can’t expect the real exchange rate to be as low as it was during Argentina’s worst economic crisis in history,” he said.

“We believe we must gain competitiveness not by devaluing [again], which is what Argentina has always done,” he added. “The solution is growing, achieving a [fiscal] surplus and lowering taxes.”

Caputo argued that the economy was improving as Milei’s policies took hold and the effects of the “disastrous” monetary policy of the previous Peronist administration had faded. He said the Peronists had printed pesos equivalent to 13 per cent of GDP in their final year in office to fund government spending.

“So this hurry, this anxiety [to lift currency controls] is a mistake and we are not going to make that mistake,” Caputo said. “The most important thing for Argentina is to lift controls when this doesn’t cause stress for our people.”

The Labour government “seems to be doing its best to scare people” into making bad decisions, according to Strategic Wealth Partners managing director and chartered financial planner Amyr Rocha Lima.

Speaking at Money Marketing Interactive in London yesterday (8 October), he told advisers to expect more phone calls ahead of the Budget.

“Even our most well behaved and responsible clients will reach out to us,” Lima said.

However, “if your clients do not reach out to you in the run-up to the Budget, you should reach out to them,” he added.

Triple Point retail strategy director Diana French, speaking on the same panel as Lima, said the backdrop for this Budget includes tax at its highest level since 1949.

“The tax environment is hard at the moment and is likely to get harder,” she said. “I do really feel like tax is a big conversation right now.”

Lima said regardless of what is announced in the Budget, it is “important we treat people as human beings.”

During the panel discussion, French also spoke positively about venture capital trusts (VCTs).

VCTs are investment vehicles that were set up to promote investment in small UK businesses that meet certain criteria.

To encourage support for these businesses, the government offer generous tax benefits..

In September 2023, French told Money Marketing that VCTs “are becoming a part of regular [financial] advice”.

French added that VCTs give investors access to companies that can grow very quickly.

Triple Point is a purpose-led investment management house that supports financial advisers, but does not actually provide advice to investors itself.

Industry duo Lima and Ian Cooke launched Strategic Wealth Partners, a financial planning practice targeted at high-net-worth clients across the UK.

The US Justice Department said in a new court filing that it may recommend a break up of Google (GOOG, GOOGL) as an antidote to unhealthy competition in the search engine market, showing just how far Washington is willing to go to rein in Big Tech.

DOJ lawyers used a 32-page document to outline a framework of options for DC District Court Judge Amit Mehta to consider, including “behavioral and structural remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search.”

Google in a blog post said that “DOJ’s radical and sweeping proposals risk hurting consumers, businesses, and developers.”

Its stock fell slightly in pre-market trading Wednesday.

The proposal is the first step from the Justice Department to break up a tech empire since it tried to do so more than two decades ago with Microsoft (MSFT).

That case — which the DOJ referenced in its Tuesday court filing — resulted in a 2002 settlement that opened the door to broader competition in the internet browser software market.

The move by DOJ also sends a signal to other tech giants currently facing antitrust cases from DOJ and other Washington regulators as part of a wide-ranging effort by the Biden administration to rein in what it views as anticompetitive behavior across a number of industries.

The administration has already alleged anticompetitive conduct against tech giants Apple (AAPL) and Amazon (AMZN) and claimed that Microsoft’s acquisition of gaming giant Activision Blizzard would create a gaming market monopoly.

The case against Google targeting its dominance in search resulted in a landmark decision in August, where DC District Court Judge Amit Mehta sided with DOJ and concluded Google illegally monopolized the online search engine market and the market for search text advertising.

Mehta concluded that Google’s agreements with browser providers and devices powered by Google’s Android operating system stifled rivals from entering and growing within the markets.

It will now be up to Mehta to decide what should happen now in a separate “remedies” phase of the trial that will likely start in 2025.

DOJ is expected to provide a more detailed document by Nov. 20 outlining these remedies. But the 32-page document filed late Tuesday offers several points of focus beyond forcing Google to sell parts of its business.

One has to do with contracts that secure Google’s search engine as a default on internet browsers and internet-connected devices that use Google’s Android operating system.

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Google pays as much as $26 billion per year to maintain its position on mobile devices like Apple (AAPL) and Samsung smartphones.

Justice Department lawyers said to prevent further harm they may seek to limit or terminate Google’s use of those contracts that use Chrome, Play and Android to advantage Google search, as well as “other revenue-sharing arrangements related to search and search-related products, potentially with or without the use of a choice screen.”

The DOJ could also ask the judge to force Google to share with rival browsers and search providers the data that it uses to refine its search algorithms, and limit the company’s dominance over search text ads.

DOJ suggested the judge should also consider blocking Google from illegally monopolizing related markets, in addition to the search and search text advertising markets.

It may ask the judge to force Google to give websites more ability to “opt out” of “any Google-owned artificial-intelligence product.”

Google pushed back on the DOJ’s suggestions.

“We believe that today’s blueprint goes well beyond the legal scope of the Court’s decision about Search distribution contracts,” Lee-Anne Mulholland, Google’s vice president of regulatory affairs, wrote in a blog post.

Google has promised to appeal. And Judge Mehta could hold off on any orders to alter Google’s behavior while it challenges his ruling in D.C.’s Circuit Court of Appeals.

The judge would lose the right to impose remedies if Google is found not to have broken the law on appeal.

And even if Google fails and is ordered to change its behavior, Judge Mehta could later adjust his orders to better ensure competition is restored.

Google faces antitrust challenges on other fronts. It is currently defending itself in a separate lawsuit from DOJ alleging a monopoly in the technology used to but and sell online ads.

And earlier this week another federal judge ordered Google to open up its app store as part of the resolution of a suit brought by Epic Games Inc.

DOJ cited that ruling in its Tuesday court filing that outlined a Google breakup as one possible remedy, noting that the judge in the Epic Games case said remedies should “bridge to moat” to combat network effects.

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