The wonderful world of business

Waiting for the recovery? It will be a long wait with this lot!

Wonderful! Wonderful!
So with the Olympics over people who find sport boring won't remember who won what but might recall that it was G4S who caused a stir by making a mess of their contract to provide security staff for the Olympics and that compensating arrangements had to be made, such as calling in the army. One of the outcomes to all this was the head man at G4S, Nick Buckles, got told off by the Labour MP Keith Vaz, who chairs the Commons Home Affairs Select Committee. Now there is a certain irony here as one person whose recent performance fell short of acceptable is questioned by another who, in the past, had the same problem! The questioning of Buckles led to the ridiculous claim by Neil Woodford, an investment manager at Invesco Perpetual, that -

the aggressive response of MPs to the Olympics security shambles put recovery at risk by discouraging businesses to come to Britain --------- last month’s Home Affairs Select Committee meeting was like watching “a medieval persecution” ---------- if this is the way Parliament wants to treat business, please Parliament, don’t be surprised when businesses decide this isn’t the country for them,

What a stupid man! The bottom line here, if you will allow a business term to be used is "how dare you question us, we are businessmen". And therein lies the problem. Of late we have seen a rise in this sort of petulant attitude from business people.

There was a time when only 'celebrities', often people from the world of stage and film on the way down and desperate for publicity, any publicity, would happily make fools of themselves for the benefit of the press. Who, fools too, were happy to print 'revelations' about them. And then along comes the 'business leader' keen to join in this 'no shame no gain' nonsense.

The never shy Richard Branson is well known for this but has of late set a new record for his sky-high ego mania. His train company lost a contract to a rival, FirstGroup, and by his behaviour since then you would think this an illegal contract, he seems to think he has divine rights.

He has come very close to calling into question the professional standards of those who judge the contract on behalf of the government. But we can all imagine the hype, the saccharine smiles had he won. How the spin would have been that not just rail passengers but the entire northern hemisphere faced a new dawn and an age of plenty. What the dear man has failed to spot is that, money aside, the goodwill towards his brand is draining away. Despite the tantrums of Branson the government is happy to allow the FirstGroup bid to go forward -

Transport Secretary Patrick McLoughlin has confirmed the government intends to proceed with FirstGroup's bid for the West Coast Main Line. Speaking to MPs, Mr McLoughlin said he was satisfied all bids were considered fairly and with "due diligence".

Then we have the veiled and absurd threats from assorted business leaders regarding the third runway at Heathrow. It is essential to realise that there is no proven link between airport expansion and the economic health of the nation. Spain has found this out the hard way, see HERE. Even so our business leaders like to pretend there is. So they press for the third runway in a totemic way that's no more plausible than some ancient tribal belief. It's just plain risible.

But so is some of the stuff written by 'journalists' to support them, James Forsyth writing in the Spectator is typical. His claim -

What’s clear is that Britain needs to get on with deciding on an aviation strategy. In an age in which trade follows the flight path

- is simply poor propaganda on behalf of the Tory party. Spain built several airports on the hope that trade would follow the flight path but it did not, some of these airports subsequently closed. There were part of the Spanish property bubble that has done so much to wreck their economy. A fact not spotted by the Tory party hell-bent on creating a UK property bubble and, of course, not mentioned by their propagandists.

Actually it's rather strange that the Coalition does not get the property bubble problem; George Osborne even said on the Andrew Marr show how he admired the Chinese way of doing things! The Chinese just take over land and build things, is that what our Chancellor admires? In an article by Gerard Lyons, Chief Economist and Group Head of Global Research at Standard Chartered bank he spells out his thoughts for the future of the Bank of England and its new governor, soon to be selected to follow on from Mervyn King. He starts with a quote from the bank of England -

excessive credit expansion, often in the real-estate sector, has characterised the build-up to crises in the past, from the Great Depression.

Lyons then goes onto expand this with his own thoughts -

Basically, every time the economy gets into trouble, one of the causes, and one of the best indicators of problems to come, has been rising house-price inflation.

His next idea is to expand the BoE toolkit' enlarged to include -

macro-prudential measures. Where used in other countries, these measures have been simple and direct, often focused on preventing a property boom. Also,how will the need to curb the housing market go down in Westminster and with the general public?

How indeed? As far as government is concerned Osborne appears to be too stupid to understand the concept, the new governor might have better luck with the public keen to avoid a negative equity trap however.

These infrastructure developers are also the people who have got so much wrong it's a wonder we still give them any credence. For example the utilisation rate of the Channel Tunnel was grossly overstated. The ridiculous claims for the need for the HS2 rail link from Birmingham to London bore no relationship to reality and ignored the practical status of similar projects on the Continent. In other words another gross and risible overstatement. It's just like the people who just know we are about to die because of global warming and must buy their solar panels and invest in green energy but cannot survive without massive subsidies paid to them!

Now we come to London Metropolitan University. Universities are businesses, the idea that they are lofty seats of learning driven by honest motives is, just, about true of most of them. However, LMU gave up trying years ago and became nothing more than a multi-million pound scam. The money to be made from foreign students is of such a scale, at least £2.5 billion a year, that it was bound to overwhelm and corrupt someone and LMU is thought to be just one who succumbed.

LMU flourished during the Nulabour era when it began this trade. It worked in such a way that it's hard to imagine government departments did not notice, or at least suspect, what was going on. Predictably, the higher education establishment is in uproar. A University and College Union spokesman said -

The message that the UK deports foreign students will reach all corners of the globe

Ah! The same sort of silly threat we saw from Neil Woodford about the G4S case above. But the best of the lot so far this year, and there's been stiff competition, came from John Griffin head of mini-cab firm, Addison Lee, who just before the Olympics came out with an anti cycling rant and instructed his drivers to, illegally, use bus lanes. Still we should all be grateful such a pillock is in business and does not run a nuclear power station! Read more about it HERE.