A great deal has been said about the current economic climate, probably too much, there seems to be an ongoing competition amongst experts and the press as to who can come up with the most dire forecast. One says things are bad another says it’s worse. This may serve to burnish certain egos but it does nothing for consumer confidence and certainly doesn’t do anything for the majority of businesses that have been well run. In Hertfordshire we are fortunate to have many companies large and small that have set the standard in terms of innovation; companies that have been developed using sound business practice; companies have been run responsibly. Whilst some will need to tread cautiously they remain viable and will continue to be source of wealth generation and employment.
In any period of challenge those that have the ability to demonstrate clear thinking will come to the fore, thrashing around for one solution after the other is not the answer. The problem is within the financial system not, by and large, within the run of the mill businesses that most of us know and understand. Of course they are affected but it is not a problem of their making left to their own devices with sensible levels of financial support they will continue to succeed.
What is needed is a period of reflection enabling the myriad of initiatives to work, the seemly endless drive to fill column inches or airtime must come to an end. In the same vein the apparent need by some to provide justification has to cease. We all have a good idea what went wrong and where the blame lies. It will be the innovative non-financial businesses that will get us out of the problems that face us we are calling on politicians, regulators and the financial press to clear their heads and ensure that an environment is created that will enable them to so.
Friday, 20 February 2009
Thursday, 15 January 2009
Getting the message across...
My colleague David Frost at the British Chambers of Commerce has certainly stirred up a hornets nest with his description of the outcome of BCCs most recent quarterly survey. Frightening, awful were just a couple of the adjectives he used. Personally I am concerned about the seemingly endless queue of people lining up to tell us how bad things are but, nonetheless, can understand where he is coming from. Things are certainly not as we would wish them to be.
I would prefer it if we all drew breath and allowed time for some of the measures that have been put in place to work. The reality of course is that until the banks start doing business very little is likely to change but, at least, the announcement by Lord Mandelson that there will be further funding to support lending should help. Following fast on David’s words I am sure he will claim that the BCC were instrumental in speeding up this process and, in fairness, so would I. Indeed it is correct to say that the British Chambers have led the debate throughout and I wouldn’t mind a small wager that they will be the first to call the recovery too.
Balancing the requirements to encourage government action and the need to protect business interests is not always an easy trick but the BCC has generally trod the line with a high level of expertise.
Looking forward it seems to me that one of the key messages arising from the problems in the economy is to learn the lessons. The current economic conditions not only cause difficulties but also identify, and amplify, some of our existing shortcomings.
As we fall down the OECD skills tables one cannot help thinking that if we are to continue attracting high levels of inward investment we will have to raise the level, and relevance, of the skills we seek to give our workforce. Despite announcements of redundancies there are still vacancies but sadly many require skills that we are short of, skills to support the engineering, electronics and pharmaceutical industries to name but a few.
If we are looking for some good news it is that we have many innovative and creative businesses with growth potential, we simply need to find more effective means of supporting them.
I would prefer it if we all drew breath and allowed time for some of the measures that have been put in place to work. The reality of course is that until the banks start doing business very little is likely to change but, at least, the announcement by Lord Mandelson that there will be further funding to support lending should help. Following fast on David’s words I am sure he will claim that the BCC were instrumental in speeding up this process and, in fairness, so would I. Indeed it is correct to say that the British Chambers have led the debate throughout and I wouldn’t mind a small wager that they will be the first to call the recovery too.
Balancing the requirements to encourage government action and the need to protect business interests is not always an easy trick but the BCC has generally trod the line with a high level of expertise.
Looking forward it seems to me that one of the key messages arising from the problems in the economy is to learn the lessons. The current economic conditions not only cause difficulties but also identify, and amplify, some of our existing shortcomings.
As we fall down the OECD skills tables one cannot help thinking that if we are to continue attracting high levels of inward investment we will have to raise the level, and relevance, of the skills we seek to give our workforce. Despite announcements of redundancies there are still vacancies but sadly many require skills that we are short of, skills to support the engineering, electronics and pharmaceutical industries to name but a few.
If we are looking for some good news it is that we have many innovative and creative businesses with growth potential, we simply need to find more effective means of supporting them.
Thursday, 18 December 2008
2008 the year of realisation - 2009 the year of taking responsibility
Going into 2008 many of us will probably claim to have had reservations about the amount of debt but in reality few will have had any idea of just what a threat it was to global financial wellbeing. Who’d have thought that the banking system would have required Government to bail them out or that one person could have made $50 billion disappear into thin air. As Jeff Randall observed in the Daily Telegraph “anyone can lose a few million but to lose $50 billion takes real talent”.
In truth I guess we all saw something that with a little thought we would have understood to be too good to be true but to be fair we were warning of problems ahead as early as February. In April we questioned the effectiveness of the Financial Services Authority and in May we warned that interest rates were too high. If we had done that in 2007 we could claim to have been really clever but, nonetheless, we still claim to have been ahead of those that left the decisions until the autumn.
Whoever is to blame the result is that the next few months are going to be tough but, as someone said, “when the going gets tough the tough get going”. One can simply despair or one can do something about it; and there is much to be done.
The financial crisis has not only had economic impact, it has also laid bare a number of other fault lines. The pursuit of numbers rather than relevance in relation to skills has cruelly exposed skills gaps as too often easy options have been taken. The unquestioning acceptance over a number of years that manufacturing is on the decline has “removed an important club from the bag”. Our complacent attitude to the prosperity we have built up over a number of years. I could go on.
Before I am accused of delivering a gospel of total despair I should like to say that the current position, although extremely uncomfortable, provides us with an opportunity to regroup and to rethink.
2009 must become the year when we all take responsibility. The year when we begin to question our political masters more carefully. The year when we all play our part in finding solutions.
In truth I guess we all saw something that with a little thought we would have understood to be too good to be true but to be fair we were warning of problems ahead as early as February. In April we questioned the effectiveness of the Financial Services Authority and in May we warned that interest rates were too high. If we had done that in 2007 we could claim to have been really clever but, nonetheless, we still claim to have been ahead of those that left the decisions until the autumn.
Whoever is to blame the result is that the next few months are going to be tough but, as someone said, “when the going gets tough the tough get going”. One can simply despair or one can do something about it; and there is much to be done.
The financial crisis has not only had economic impact, it has also laid bare a number of other fault lines. The pursuit of numbers rather than relevance in relation to skills has cruelly exposed skills gaps as too often easy options have been taken. The unquestioning acceptance over a number of years that manufacturing is on the decline has “removed an important club from the bag”. Our complacent attitude to the prosperity we have built up over a number of years. I could go on.
Before I am accused of delivering a gospel of total despair I should like to say that the current position, although extremely uncomfortable, provides us with an opportunity to regroup and to rethink.
2009 must become the year when we all take responsibility. The year when we begin to question our political masters more carefully. The year when we all play our part in finding solutions.
Wednesday, 3 December 2008
Oh dear, yet more employment legislation! The Government that claims it wants to help business strikes again!
Let me begin by saying that in 2008 any business that is able to be and doesn’t have a flexible approach to its staff is missing a trick. Good employers, generally, have a more effective workforce and reduce costs by retaining them for longer. If being flexible helps an employee, and doesn’t have a deleterious impact on the business, surely it makes sense to be so. Good employers have long since recognised the benefits of being flexible and therefore there is no need to introduce legislation to make them be so. It leads to better performance and gives them edge over those who are not.
The problem with legislation is that it has a disproportionate impact on smaller businesses and takes away the ability to apply commonsense. It must also be said that it does not discriminate between good and bad employers. Good employers will follow it diligently but nevertheless occasionally end up facing the unfairness of Industrial Tribunals and, in any case, incur the additional costs of implementation. Frankly, bad employers will ignore it.
It seems to me that this government has got so wound up with political correctness and an apparent wish to interfere in all aspects of our day to day life it has failed to understand that reasonable people can rub along perfectly well without their constant intervention. Legislation may keep some people on the rails but at the end of the day most of us will be good (most of the time) and some people will be bad. We do not require the State to constantly tell us what is right and wrong and how to behave.
Since it came to power in 1997 this Government has stated that it wants to support business – at best it has been inconsistent. I am not sure that this legislation would be welcome at anytime but at a time when business people across the country are trying everything they know to sustain a future for their businesses the announcement of yet more legislation should be condemned. It really does appear that the only answer this government has to life’s challenges is yet more legislation.
To paraphrase Albert Einstein “Continuing to do the same thing and expecting a different outcome is a sign of madness”.
The problem with legislation is that it has a disproportionate impact on smaller businesses and takes away the ability to apply commonsense. It must also be said that it does not discriminate between good and bad employers. Good employers will follow it diligently but nevertheless occasionally end up facing the unfairness of Industrial Tribunals and, in any case, incur the additional costs of implementation. Frankly, bad employers will ignore it.
It seems to me that this government has got so wound up with political correctness and an apparent wish to interfere in all aspects of our day to day life it has failed to understand that reasonable people can rub along perfectly well without their constant intervention. Legislation may keep some people on the rails but at the end of the day most of us will be good (most of the time) and some people will be bad. We do not require the State to constantly tell us what is right and wrong and how to behave.
Since it came to power in 1997 this Government has stated that it wants to support business – at best it has been inconsistent. I am not sure that this legislation would be welcome at anytime but at a time when business people across the country are trying everything they know to sustain a future for their businesses the announcement of yet more legislation should be condemned. It really does appear that the only answer this government has to life’s challenges is yet more legislation.
To paraphrase Albert Einstein “Continuing to do the same thing and expecting a different outcome is a sign of madness”.
Thursday, 27 November 2008
It’s a funny old world or is it?
Just when you think you’ve seen it all something else happens. A government with a Prime Minister who made his reputation pursuing Miss Prudence starts throwing money around like a lottery winner, the Governor of the Bank of England declares that nationalising the banks is an option and RBS/Nat West announce that they are going to start doing business again.
Let’s get the last point out of the way straight away. Well done RBS/Nat West, let’s hope that the others follow their example sooner rather than later. Unless and until all banks return to doing sensible business any hope of recovery is nothing more than a pipedream. I don’t mean returning to the target driven recent past where lending at any cost appears to have been the norm but a return to what many of us of a certain age would have regarded as “good business”. Sensible lending where all concerned understood the risks and where clients knew where they stood.
As for the Governors aside that nationalising the banks was “an option” something clearly needs to be done to get the them “out of neutral” but, as things stand at the moment, it would be difficult to say who would be worse, our under fire bankers or our government.
As for the measures announced this week by the Chancellor let me say that I, like everyone else in the country, really, really hope they work. Do I think they will? Well that’s another story. Actually I am far from convinced and certainly question some of the measures announced. Reducing VAT 2.5% might have some marginal impact but given the level of discounting one already sees on the High Street and elsewhere I really can’t see it having much effect.
What concerns me greatly is the thought that as the economy is recovering businesses will be hit again by increases in National Insurance. I know the so called “giveaways” need to be financed but raising NI thresholds is a measure which will ricochet around the system like a stray bullet. Adding costs to employing individuals will add to wage pressures and make businesses even more reluctant to take on new people.
Ultimately, of course, its always business that pays and I acknowledge some good things in the Chancellor’s statement. Reversing the decision to charge empty premises tax for which we have been campaigning for some time, is welcome and the increase in funding for the Small Firms Loan Guarantee Scheme (as long as the banks get behind it) will have some impact.
Overall though the statement brought out my curmudgeonly side (not usually far from the surface anyway) and I am inclined to view it in the same light as most budgets in recent memory. A mixture of “smoke and mirrors” and we’ll all pay for it in due course. If it does the trick though, along with everyone else I will be delighted.
Let’s get the last point out of the way straight away. Well done RBS/Nat West, let’s hope that the others follow their example sooner rather than later. Unless and until all banks return to doing sensible business any hope of recovery is nothing more than a pipedream. I don’t mean returning to the target driven recent past where lending at any cost appears to have been the norm but a return to what many of us of a certain age would have regarded as “good business”. Sensible lending where all concerned understood the risks and where clients knew where they stood.
As for the Governors aside that nationalising the banks was “an option” something clearly needs to be done to get the them “out of neutral” but, as things stand at the moment, it would be difficult to say who would be worse, our under fire bankers or our government.
As for the measures announced this week by the Chancellor let me say that I, like everyone else in the country, really, really hope they work. Do I think they will? Well that’s another story. Actually I am far from convinced and certainly question some of the measures announced. Reducing VAT 2.5% might have some marginal impact but given the level of discounting one already sees on the High Street and elsewhere I really can’t see it having much effect.
What concerns me greatly is the thought that as the economy is recovering businesses will be hit again by increases in National Insurance. I know the so called “giveaways” need to be financed but raising NI thresholds is a measure which will ricochet around the system like a stray bullet. Adding costs to employing individuals will add to wage pressures and make businesses even more reluctant to take on new people.
Ultimately, of course, its always business that pays and I acknowledge some good things in the Chancellor’s statement. Reversing the decision to charge empty premises tax for which we have been campaigning for some time, is welcome and the increase in funding for the Small Firms Loan Guarantee Scheme (as long as the banks get behind it) will have some impact.
Overall though the statement brought out my curmudgeonly side (not usually far from the surface anyway) and I am inclined to view it in the same light as most budgets in recent memory. A mixture of “smoke and mirrors” and we’ll all pay for it in due course. If it does the trick though, along with everyone else I will be delighted.
Thursday, 6 November 2008
Where there's muck there's...
The more observant will have noticed our recent event aimed at raising awareness of the environmental sector and to start a countywide debate on the issues. This week I was able to join an East of England Regional Assembly party visiting the Danish Region of Mid Jutland which is taking an extremely proactive approach toward seeking energy efficiency solutions.
Of the sites we visited one converting animal fat into bio-diesel and another turning all sorts of manure into bio-gas were the most interesting. They were both interesting for a number of reasons, not least because they were turning materials that would have otherwise would have been incinerated into valuable heat and power sources. Another interesting outcome was the fact they were adding value to what, at best, would previously have been regarded as nuisance materials.
In a short visit it would be foolish to think that one could discover the definitive answer to the debate on energy efficiency, indeed if anything, yet more questions were raised. How do you ensure that the supply of the relevant materials will be sustainable? Can you ensure that the cost of the raw material is kept at a reasonable level? Can you make the process commercial? And so on and so forth.
To support their research they had also set up an Agro-Science Research Park where they conducted a range of relevant research, hosted start-up research companies and also encouraged young people to develop their science and engineering skills.
Was I impressed? You bet. Envious? Oh yes.
Hertfordshire prides itself on its knowledge based industries and makes a variety of claims about innovation in the county but I have to say we could learn a great deal from the positive, energetic approach of our Danish colleagues. We also need to recognise that finding solutions to the environmental challenges we face will not only be good for the planet but will also provide enormous economic benefits going forward.
As I write I can hear the planners saying “we don’t want these nasty recycling plants” but, in reality, they were no more intrusive than other farm buildings we see in our countryside. What I found really impressive was that someone could take 50,000 tons of waste animal materials and turn it into 55 million litres of high grade bio diesel. Even more impressively any residual ash was used to make cement and bricks. Efficient or what?
Of course there are many questions to be answered. We need to find satisfactory long term answers. If we don’t someone else will.
Solving the conundrum will provide opportunities on a variety of levels. The Hertfordshire Chamber of Commerce & Industry intends to play a leading role in opening up the debate on this subject and I would be delighted to receive contributions towards it.
Of the sites we visited one converting animal fat into bio-diesel and another turning all sorts of manure into bio-gas were the most interesting. They were both interesting for a number of reasons, not least because they were turning materials that would have otherwise would have been incinerated into valuable heat and power sources. Another interesting outcome was the fact they were adding value to what, at best, would previously have been regarded as nuisance materials.
In a short visit it would be foolish to think that one could discover the definitive answer to the debate on energy efficiency, indeed if anything, yet more questions were raised. How do you ensure that the supply of the relevant materials will be sustainable? Can you ensure that the cost of the raw material is kept at a reasonable level? Can you make the process commercial? And so on and so forth.
To support their research they had also set up an Agro-Science Research Park where they conducted a range of relevant research, hosted start-up research companies and also encouraged young people to develop their science and engineering skills.
Was I impressed? You bet. Envious? Oh yes.
Hertfordshire prides itself on its knowledge based industries and makes a variety of claims about innovation in the county but I have to say we could learn a great deal from the positive, energetic approach of our Danish colleagues. We also need to recognise that finding solutions to the environmental challenges we face will not only be good for the planet but will also provide enormous economic benefits going forward.
As I write I can hear the planners saying “we don’t want these nasty recycling plants” but, in reality, they were no more intrusive than other farm buildings we see in our countryside. What I found really impressive was that someone could take 50,000 tons of waste animal materials and turn it into 55 million litres of high grade bio diesel. Even more impressively any residual ash was used to make cement and bricks. Efficient or what?
Of course there are many questions to be answered. We need to find satisfactory long term answers. If we don’t someone else will.
Solving the conundrum will provide opportunities on a variety of levels. The Hertfordshire Chamber of Commerce & Industry intends to play a leading role in opening up the debate on this subject and I would be delighted to receive contributions towards it.
Friday, 31 October 2008
Ross, Brand or the Economy?
It’s been an interesting week; the fall out of the credit crunch rolls on, house prices continue to fall, various wars continue to take their toll around the world and what do the BBC, Gordon Brown and David Cameron choose to lead on? The rude and boorish activities of two overpaid radio presenters.
Oh well at least the Chamber has been doing it’s bit, meeting Members of Parliament, challenging the government on the payment of rates on empty business premises; calling for cuts in interest rates; and particularly looking at support for smaller businesses during the current economic upheaval.
Smaller businesses play a key role in the county employing high numbers of people , introducing innovative new ideas and as a vital link in the supply chain for their larger brethren. To many of the people running smaller businesses the word challenging no where near reflects the current situation.
Anyone who has put their house up as security to support a business will know the stresses on themselves, their families and life in general. People running small businesses can’t just lock up at night, go home and forget all about it.
Last Sunday I read the papers as usual and found myself becoming more and more angry as I read the various accounts of why we had got into the economic pickle in which we find ourselves. Angry because many of these so-called experts were the very people who had caused the problem. I don’t suppose many of them had put their house on the line.
Now the banks who largely caused the problem, those that courted the small companies whose businesses they so avariciously sought only a few months ago, are withdrawing their support. Not surprising I suppose when they don’t even have the confidence to do business with each other.
It is clearly naïve to expect things to return to normal overnight but surely the key ingredient we require now is confidence. Isn’t it about time the experts in the City and the banking community began to do something about it?
Oh, and what about Messrs Brown and Cameron? It’s probably better that they stick to worrying about the BBC.
Please take our poll below, if you have an alternative answer to those listed, feel free to leave a comment on this blog.
Subscribe to:
Posts (Atom)