Category: Business

THE UNACCOUNTABLE GOVERNMENT

 

RAIL BETRAYAL.

Since Parliament has gone into recess, hardly a day has passed without a significant policy announcement by ministers. They’ve ranged from banning petrol driven cars by 2040, to transport announcements that have the potential to drain the Northern Powerhouse (NP) of any meaning.

With MPs, away from Westminster and unable to call the government immediately to account, elected mayors and council leaders across the North have had to promise a summit in late August. Let’s hope that the current angry mood will not have turned to dull resignation.

The betrayal by Transport Secretary Chris Grayling is breath-taking. He has rowed back on plans for new platforms at Manchester Piccadilly station, said “bi-mode” trains will do on the Manchester-Leeds line rather than full electrification and downgraded rail schemes in Cumbria. At the same time the government announced their support for a £30bn Crossrail 2 project in London.

A few weeks ago, I challenged the chair of Transport for the North (TFN) John Cridland at a major conference on transport about the Treasury rules that will always mean that London schemes meet investment criteria because of the millions of commuters compared to the needs of the North. Cridland remained optimistic and TFN were urged by Manchester City Region mayor Andy Burnham to persuade the government to look at other criteria for justifying transport spending like economic return.

I said in a blog a few weeks ago that the acid test of the government’s commitment to the Northern Powerhouse would be whether Crossrail 2 or Trans Pennine investment would come first. Well now we know.

The whole Northern Powerhouse project is in serious trouble. Good connectivity between northern cities is the bedrock of the whole scheme. The new NP Minister, Rossendale MP Jake Berry is nowhere to be seen. Meanwhile Business Secretary Greg Clarke made his industrial strategy speech on investment in battery power in Birmingham this week. Ever since Theresa May came to power there has been a pivot from the North to the Midlands.

Let’s hope the summit backed by all the northern cities at the end of next month gets some answers from ministers.

EMPLOYMENT TRIBUNAL BLOW FOR BIZ.

 

It is always a shame when people abuse employment rights. But that was why the Coalition government brought in fees to deter vexatious employees and chancers who were taking employers to tribunals in droves. In 2012/13 191,541 cases were lodged before fees were levied. The latest figure is 88,000 which is high enough and by the way, fees were often reimbursed if the grievance was genuine.

Small businesses are set to be hardest hit as claims from aggrieved employees soar again. With Brexit uncertainty as well, it is not a good time to be in business.

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BUSINESS IS READY FOR TRUMP ROLLERCOASTER

JUST JIM 233.

BUSINESS READY FOR TRUMP ROLLERCOASTER.

When the Trump presidency starts next Friday, the business community won’t be alone in wondering what happens next.

During the transition from President Obama to President Trump, economic indicators have generally been up on both sides of the Atlantic. Here the FTSE 100 has had its longest run of successive all-time peaks since it was set up in 1984. One of the reasons is Donald Trump’s commitment to increase infrastructure spending across the United States. Any business traveller will know The Donald is on to something here. Most of America’s airports are tired compared to their gleaming counterparts in Asia and the Middle East. It is the same with US roads and rail. It is the penalty Americans are paying for being first to embrace the car revolution in the post war years.

SME confidence is also strong in the UK. It rose from 2.9 to 8.5 in the last quarter according to the Federation of Small Business. Is this a spill over effect from Trump’s plans when he comes into office? Some economists believe that for every percentage point the US economy grows, advanced economies like the UK grow by 0.8%. The incoming President is planning tax cuts and increased defence spending as well as major infrastructure schemes that we have already discussed.

But business needs to be cautious. Trump is a loose cannon. We have already seen shares in pharmaceuticals crash as a result of the incoming President’s determination to repatriate manufacturing to the US. Bringing jobs home was a key election platform and has already led to Ford deciding to locate a car plant in Michigan instead of Mexico. Defence shares have also been hit by tweets sent out from Trump Tower.

Business will also be aware that the new President will be taking office with controversy swirling around his coiffured blonde hair. Has he done enough to distance himself from his global private interests? Is the team he has selected to run the great offices of state up to the job? Will he get the support of the Republican controlled Senate and House that the raw numbers suggest? Many don’t regard him as a real Republican. Then there is the personal stuff. Is he in thrall to the Russians over his peccadillos, and will he realise that he cannot run the United States by angry tweet.

Business on both sides of the pond have craved more business experience at the top of politics. Well the USA has got one and it will be fascinating to see if Trump can manage a political machine as well as he ran his boardroom. They are very different beasts.

 

Follow me at www.jimhancock.co.uk

 

MAY: TOO SOFT ON THE BOARDROOM

 

MAY: THE BOARDROOM PUSSY CAT.

One of the reasons for the huge gap that is opening up between the people and the elite across the western world, is bad behaviour by some big businesses.

I always thought we should dismiss the Prime Minister’s initial mission statement about being a government for all as “what they all say” and so it has proved in relation to the Green Paper on Corporate Governance. This was meant to be a signal that ministers were going to grapple with the Philip Green’s of this world and the huge gap between workers on frozen pay and bosses paid 140 times more in some cases.

Instead of workers on boards, they are to have a “voice”. There is little on giving pension scheme members more say, the issue at the heart of the British Home Stores scandal.

Under consideration are pay ratios to show the gap in earnings between Chief Executives and workers, more power for shareholders to vote against bosses pay rises, private firms to be held to the same standards as public companies and a code of practice.

Will any of this be effective in bringing about more corporate business responsibility. The government seem to be in nudging not compelling mood.

THE CHALLENGE OF NUTTALL.

Blue Labour is an organisation that worries about the growing gap between its traditional northern working class base and the liberal (small L) elite who have enthusiastically embraced the social and economic changes of recent years.

They met in Manchester at the weekend to ask questions like “might there be a hermeneutic of continuity reuniting the working class with those that fear its voice?” Now I’m happy to share a Gauloises Disque Bleu (remember them in soft white packets) with any number of intellectuals and discuss the future of socialism. However I think there is a lack of urgency on the centre left and a self indulgent sectarianism between Greens, Liberal Democrats and Corbyn opponents.

While they agonise the new UKIP leader Paul Nuttall says he is going to appeal to Labour voters in the North on the issues of immigration, crime, foreign aid and putting British people at the top of the queue for jobs.

What is the centre left response to that agenda which some will feel has a whiff of racism? Well for one thing what are UKIP going to do about housing, adult social care and the productivity gap? But the centre left do need to make an effective response on the “awkward” issues like immigration. Otherwise those many UKIP second places in wards and constituencies will fall from Labour’s grasp.

ON BALANCE I MOURN CASTRO’S PASSING.

Fidel Castro’s coup in Cuba happened as I began to take an interest in politics. He has been around all my adult life so some thoughts at the time of his passing seem appropriate.

His coup removed a regime that was turning Cuba into a brothel and casino dominated by the United States. Castro wanted American help but instead faced the Bay of Pigs invasion designed to topple him. He therefore embraced the Soviet Union and foolishly allowed them to base missiles on the island which nearly brought about a nuclear war. He was ruthless with opponents and persecuted gays. But, but, but he gave the Cuban people health and education standards rarely matched in the Americas. He also sent troops to confront apartheid South Africa and contributed to its end.

We will all be weighed in the balance and for only a virtuous few will the scale be wildly in their favour.

Follow me at www.jimhancock.co.uk

NORTHERN BUSINESS POST BREXIT

 

Business is faced with years of uncertainty following the Brexit vote but people are trying to make the best of a very bad job.

That was clear at a Downtown meeting in Manchester this week where our members and guests resolved to use the northern spirit of enterprise to seek out new opportunities if we are to be outside the EU.

THE POLITICAL LANDSCAPE.

Political uncertainty remains although I think Theresa May will be the next Prime Minister. However some members at the meeting felt that Andrea Leadsom’s claim to be the real Brexiteer will win her much support amongst the grass roots. The anti EU zealots are still alive and well in the Tory Party. They are suspicious that Theresa May, who was on the Remain side, will cave in to Brussels. Mrs May has countered that displaying a sense of humour that we all thought she completely lacked. Having been described by Ken Clarke as “a bloody difficult woman”, Mrs May remarked that the next person to think that would be the EU Commission President Jean-Claude Juncker.

Brave talk but the negotiations are going to be hard and the darkening economic landscape is there for all to see.

Whoever the Tories choose, they are likely to be Prime Minister well into the 2020s having won the General Election against the unelectable Jeremy Corbyn. It looks as if the Labour moderates have failed to remove him. A week ago Wallasey MP Angela Eagle was poised to challenge. The pressure on Corbyn was at its maximum but she didn’t make her move. It may still come but in the past week Eagle has faced a left wing pro Corbyn revolt in her constituency and the leader strengthened his position in the wake of the Chilcot Inquiry. Corbyn reminded the nation of his opposition to the Iraq War whereas Tony Blair looked like a broken man.

Labour moderates need to realise the game is up. The Labour Party is now a socialist party. The political space just to the left of centre is waiting for them. In any case there will now be a ruthless process of deselection of moderate MPs mounted by the Corbyn supporting Momentum movement making them pay for their “treachery” to the leader.

THE BUSINESS OUTLOOK.

Against that political background there was agreement at the Downtown meeting that the next three years would be difficult. Not only would the UK’s relationship with the EU change but the EU itself might change. Tom Cannon from Liverpool University forecast the pound would be worth a dollar by Christmas as the American currency strengthened. He forecast big cities like Leeds and Liverpool would thrive in the post Brexit world but people in the communities that had voted most strongly to leave would suffer most from rising petrol and food prices.

Neil McInroy from the Centre For Local Economic Strategies felt that Chancellor George Osborne would go and the Northern Powerhouse, with which he is so closely associated, will slow or stop. It is difficult to see May (Maidenhead) or Leadsom (South Northamptonshire) having the same feel for the project as the man from Tatton.

Our own Chief Executive Frank McKenna said warnings from business, about how their bottom line costs would rise if we were out of the EU, had been drowned out by the noise of the politicians. He also feared extreme candidates could affect next year’s mayoral contests in Liverpool and Manchester.

So much uncertainty on the business and political front as Downtown’s business community looks to the future.