How Whitehall's Death Eaters did for the Midland Mainline

As politics go, the decision to “pause” the electrification of the Midland Mainline is miserably, yet predictably, shabby.

It’s pretty obvious the government knew the problems with Network Rail’s budget were going to come to a head before the election. The final announcement last week was also anticipated by a series of leaks which appeared in national newspapers.

Whitehall's grubby paws were all over them. They were softening us up.

All this when millions has already been spent on preparatory work for electrification, and when the government remains committed to pouring billions into London’s transport system and even more fantastical sums into the shimmering vision that is HS2.

But we shouldn’t be surprised. Post-war British history is littered with the wreckage of large-scale, government-funded projects which became victims of the cock-eyed ‘system’ by which we contrive to manage the UK’s creaking infrastructure - its inadequate airports, its slow, overcrowded railways, its stretched power stations and its crappy roads.

While we’re pretty good at producing reports which forecast demand and warn of problems, getting something done about them appears to produce an institutional psychosis which means we never quite manage to get it over the finish line without a financial hiccup. Or we just never manage to get it over the finish line at all.

Actually when I say ‘psychosis’, I mean ‘Treasury’, the government department which looms over anyone in Whitehall who dares suggest money might be spent.

We shouldn’t joke. While infrastructure has its wreckage, politics has its corpses, many of them rendered lifeless by what is the Whitehall equivalent of Harry Potter's Death Eaters.

Yet the decision to kick the Midland Mainline’s electrification into the long grass is surely a glaring example of a dysfunctional system of administration that has had its day.

What should be a rational assessment of the future needs of the economy has been turned into an advert for how not to stimulate regional growth, and how central government spends far too much time listening either to itself or to voices in London.

Those voices don't speak for us.

A couple of weeks ago I was in Nottingham’s twin city, Karlsruhe, riding on a tram which runs straight on to local rail lines and carries on its journey. It has been operating successfully for years and it’s the result of a political system which lets regions keep their money and make their own decisions.

Were it not for the depressing myopia of Whitehall’s economic prison warders, we could do the same in Nottingham.

Marketing Nottingham: JDI

Delicate, complex, tortuous.

Not exactly the three words you'd choose to sell Nottingham as an inward investment location, but entirely appropriate to characterise the process by which a proper place marketing organisation has emerged.

While the news is now out that Experience Nottinghamshire, Invest in Nottingham and Nottingham Means Business will come together under the umbrella of Marketing Nottingham and Nottinghamshire, the process to nail down the final shape of the organisation is far from complete.

The status of the different organisations means there are all sorts of employment and financial issues to resolve, political sensitivities to accommodate (this is a body that has to visibly serve city and county), and a significant degree of independence to establish.

Achieving that is going to require an experienced, respected, yet firm and forensic pair of hands. Nottingham City Council, which has played the driving role, knows who it would like to chair this process. But a key challenge for the person in the hotseat will be demonstrating to the rest of the county that this isn't going to be some metropolitan fix.

There is also a job to do in convincing politicians and businesses that a body with a very broad portfolio of responsibilities - it takes in everything from bidding for multi-million inward investments to promoting shire B&Bs - can still have a clear focus and a consistent message.

The bigger picture is that this is an organisation which needs to hit the ground running. The marketing of the city and county lags beind that of other major conurbations, and Marketing Nottingham will emerge at a time when the devolution agenda means cities in partcular are sounding an ever-louder drumbeat about their appeal as investment locations.

What's more, both city and county have significant unfulfilled regeneration opportunities - and the clock is ticking loudly on the current economic cycle.

Some close to the process - and many in business - have been more than a little frustrated at the glacial  progress. After all, the need for an organisation which marketed both city and county to businesses and tourists was identified years ago.

But the opportunities it can pursue haven't gone away. And constructing a narrative around them which is flexible enough to serve different purposes really isn't difficult.

Tortuous as this process has been, it's neither here nor there in terms of marketing Nottingham and Nottinghamshire. This is all about the message - and making it happen. JDI, as they say.

MIPIM: Nottingham's Silicon Roundabout is the real deal

The longer you're in business journalism the more sceptical you become about claims that a new development will bring hundreds or thousands of new jobs.

A decade ago, Nottingham was apparently looking at just that when glitzy CGis of a £900m regeneration plan for the city's Eastside area were revealed. What happened? Nothing. The demand just wasn't there and Eastside remains undeveloped to this day.

So what are we to make of claims revealed at MIPIM this week that a £40m Tech Hub in Nottingham could result in hundreds of jobs for people working in and around software development?

I'll declare a vested interest: it was my story and I spoke to the people behind it and others involved in Nottingham's  tech scene several times before publication.

And the difference between the people behind this proposal and the Eastside dream is that they've done this before.

Mark Onyett is the driving force behind it. Armed with a Masters in manufacturing engineering from Cambridge, he went into business consulting before joining Capital One and becoming its director of risk operations. With two former consulting colleagues, he came up with the idea for TDX Group, a business which used data analytics to devise software programs which better manage large-scale debt portfolios.

That was in 2004. In January 2014 he and his fellow shareholders (which by then included Bahrain's Investcorp, no less) sold the Fletcher Gate business to Equifax for a cool £200 million.

Now a partner in London-based tech investment vehicle Blenheim Chalcot (with colleagues Manoj Badale and Charles Mindenhall), he has launched three new tech business in Nottingham which are all operating in the financial services technology space.

The three firms - Oakbrook, Sequensis and Bizfitech - are currently based in York House on Wilford Street and need room to expand. Onyett's idea is that they should form the centre of gravity for a new Tech Hub which will attract other software developers and testers who can feed off each other to develop new ideas and new businesses.

There's nothing new in the economics of clustering - it's what lies behind Silicon Valley on the US West Coast and Silicon Roundabout in London. Onyett's point is that we already have a tech cluster in Nottingham because of the presence of data analytics-based businesses lke Experian, whose growth helped attract Capital One.

Together, those two hefty businesses have supported or given birth to the likes of TDX, Ikano Financial Services, HD Decisions, Insurance Initiatives and others. We have a serious talent pool as a result.

At which point you begin to realise that the announcement Nottingham made at MIPIM this week is not wishful thinking but the real deal.

The one caveat is that the city would do well to market this concept in London, Sheffield, Birmingham and Manchester, as the existing fitech businesses must be close to sucking up all the dev talent already in Nottingham.

Mark Onyett's not alone in thinking that Nottingham has got the rght kind of environment to support the tech mindset. Entrepreneur Adam Bird (one of the founders of Esendex, later sold for £11m) points  to a growing number of social gatherings (NottTuesday, Second Wednesday, for example) and the upcoming Hack Twenty Four event as evidence that there is a tech communty with its own eco system - generally seen as vital if techies are to avoid feeling like they've landed in Nowheresville.

There are other aspects of Nottingham which should appeal. Despite those fitech giants, techies often don't like big, branded and corporate, and environments like the Creative Quarter will go down well.

There were no glitzy CGis of the Nottingham Tech Hub to show at MIPIM (and that's probably a good thing). There is instead an experiened team which wants to tap into an existing talent pool grown by a heritage of data analytics activity.

In other words, it's believable.

MIPIM: The East Midlands Powerhouse

A shot in the arm for Nottingham today as it heads out to MIPIM, the international property development and investment expo in Cannes.

From the UK perspective, the event is likely to be dominated by talk about regional devolution, led of course by the narrative around the so-called Northern Powerhouse - that (theoretical) swathe of economies stretching from Manchester in the West to Leeds in the East.

Manchester and Leeds are big cities and have always had strong economies ever since the days when they became established as great Victorian mercantile centres. They've had powerful politics ever since, and a strong voice in Westminster has ensured that the modern-day Northern Powerhouse  narrative has taken hold.

But here we are on the eve of MIPIM and a new set of statistics confirm - not for the first time - that they're not quite the powerhouse that this narrative implies.

According to business advisors PwC, the fastest growing region outside London and the South East this year will be not the North West or Yorkshire but the East Midlands.

PwC's figures show that our regional economy will grow by 2.5 per cent this year - a percentage point clear of most other regions and two percentage points clear of the North West (which is on 2.3 per cent).

This points to a sustained recovery in our economy, one where the continuing uncertainties around what's happening (or not happening) in the eurozone are being nicely countered by very low inflation and a low oil price.

On that basis, says Paul Norbury, PwC's senior partner in the East Midlands, we should start preparing for a rise in interest rates, probably next year.

Other than a suggestion that house price rises will continue to slow, there's no specific news on property in PwC's outlook.

But it does add a useful element to Nottingham's narrative at MIPIM: Who needs to be a powerhouse when you're the fastest-growing region in the UK?

MIPIM 2015: Property and powerhouses?

In a few days' time, low cost flights from airports across the UK will be full of optimistists. They'll be heading for Nice then hiring a taxi for the short hop up the Cote D'Azure to Cannes. MIPIM here's again.

When I went last year it was, to borrow a phrase from one of the Nottingham team "as if an industry which fell off a cliff in 2008 has just jumped back on again".

The place was teeming with people and money was out there in a big way looking for places to go. A useful chunk of it found its way into the groaning tills of Cannes' bars, restaurants and hotels. Some even made a kebab shop owner smile, but that's another story.

The point last year was that it was obvious that a new investment cycle was underway and that landowners, developers and economic development teams in towns and cities needed to have attractive, oven-ready opportunities for investors.

Nottingham did ok last time round, with a presence more noticeable than it's had for some time. It bagged a restaurant directly opposite the Palais des Festivals, got some decent coverage with a beach cricket event, and won a few friends with a panel discussion dinner and its drinks reception.

This year will be tougher. Cities like Manchester, Liverpool and Leeds, which throw significantly more money at the event than Nottingham, will roll into Cannes on a wave of optimism brought about by regional devolution and the 'Northern Powerhouse' badge.

Now, the statisticians among you might well point out that the economic powerhouse outside London is actually in the Midlands, not the north. But perception is all, the Midlands hasn't (yet) got its message together and London politicians and media will lap up press releses which mention Manchester.

Nottingham will have some highlights to talk about - the enterprise zone centred on the Boots campus is now ready to go; Nottingham City Council is now engaged in a serious push to crack the regeneration of that swathe of the city from Eastside to Waterside; similarly, the city desperately needs new Grade A office space; and the march of its life sciences sector continues apace.

There will be one other significant announcement during MIPIM week. It could have long-term implications for the city. And I'm saying no more than that!

The Man Who Got Things Done

There are a lot of people who knew Jim Taylor better than me. There are a lot of people who have paid tribute more eloquently than I can. I was first introduced to JT by Richard Tresidder, whose own appreciation in the Nottingham Post neatly summed up his talent, his determination and his refusal to allow a long-term health problem to get in the way of either driving Nottingham forwards or making mirth.

Richard Williams, in The Guardian, rightly brought the passing of a great provincial planner to national attention, while Tim Garratt shared those inimitable 'Jim-isms' in his blog.

Today we said goodbye to Jim. What such a notoriously publicity-shy character would have made of a St Mary's Church packed to the rafters, of poignant memories, warm tributes and gales of laughter, I don't know.

The humour I'm sure he would have appreciated. The formality would have been something to be mercilessly sent up.

He did that to me on more than one occasion. I picked his brain on many stories about regeneration and economic development, and liked to think the odd one might have contained a few grains of insight. JT had a way of letting you know when they didnt. On the morning one of my more epic efforts was published - an epic whch quoted a particular individual at length - the phone rang. The caller didn't say who he was, but the nature of the charming put-down needed no introduction. "I see you've been drinking deeply from the pipette of his wisdom again," he chuckled.

The gentle de-construction which followed made it clear that this particular epic had all the substance of tomorrow's chip-paper.

Jim could, of course, see the bigger picture in a way that a mere hack couldn't. Along with numerous other victims, he would summon me for coffee and begin with something along the lines of "I want to discuss something - and I can see the headlines now". At that point, I'd realise I was in for several weeks of toil at the hands of a man far more exact and demanding than any editor I've come across.

Jim's energy (hinted at by Eddie Neale in a warm eulogy) could be both demanding and infectious. He was intolerant of people who were either uncommitted or in it for something other than the greater good.

Meeting his standards was not easy (and will be harder still with his passing). It required you to set aside sectional interest and see that bigger picture. Feathers would be ruffled, risks would be taken. And things would be achieved.

The tram (his personal train set, as Geoff Williams, from the Sneinton 'Academy' put it) should shield the city from some of the long-term costs of traffic congestion. The Market Square is a provincial jewel. The rejuvenation of the Forest Recreation Ground righted a wrong.

The work that Jim put into Nottingham Ambassadors and - in particular - the Invest in Nottingham Club - should not be under-estimated, either. In a city where mutual suspicion between public sector and private sector has got in the way of progress, the Club has provided some crucial economic development glue at a critical time.

Jim's abiliy to empathise with other people's problems was, perhaps, a mirror of his own sensitivities. But his unvarnished commitment to doing right by Nottingham meant he was entitled to be sensitive. You cannot argue with his achievements, and nor should you - like him, they are there to be celebrated.

Nottingham is a better place because of Jim Taylor. Lives have been enriched by him, as Eddie Neale said. Pomposity has been punctured, mischief has been made, riotous fun has been had. And progress has been made.

Summing Jim up in one sentence is not easy. As his sons put it at the end of today's celebration: "He was the man who got things done."

Has the rug really been pulled from under Mark Carney?

The heated debate about whether or not Bank of England Governor Mark Carney has engaged in a humiliating climbdown over his forward guidance on interest rates is destined to sink beneath the waves of flooding news.

Which is probably not a bad thing.

The debate is an important one, but was being turned into an egotistical contest about who knew most about UK monetary policy: a Canadian bank governor or City scribblers.

The scribblers appear to have decided long ago that Carney was an outsider who'd blundered. After all, what on earth was this suspiciously slick Canadian doing making his first major announcement about policy in Nottingham of all places?

This was where, last August, he said the Bank wouldn't even consider putting up interest rates until the unemployment rate fell to 7%.

This was breaking new ground on two fronts. First, it meant the Bank was no longer tied by inflation – it had another factor to consider. Second, Mr Carney was a whole lot more open about what he meant (finding meaning in an interview with Mervyn King, his predecessor, was like searching for a needle in a haystack).

Mr Carney's view was that the Bank needed to lose its lofty air, get out into the economy and explain to worried consumers and uncertain businesses that it wasn't going to do anything which would torpedo a fragile recovery they would depend on for jobs, wages and revenue.

If you look back, you'll see that he dropped plenty of hints to suggest that seven per cent was far from an automatic threshold. It was, he said in an interview with the Nottingham Post, "only a staging post" and "No one should assume that it is a trigger for raising rates".

He also made another important point, one with which few would disagree: that the Bank's decision on interest rates would not be dominated by the strength of the economy in London and the South East, which is on a different level to the rest of the country.

Remember his comment: "Nottingham is the bellwether of the broader British economy. It is not over-weighted with finance, we get enough of that perspective in London."

This is one the City scribblers would do well to dwell on. Mr Carney may have been caught out by the speed with which the unemployment rate has plunged close to a 7% national average. But it remains significantly above that level in some regions, the recovery that is clearly motoring ahead in the South East remains patchy elsewhere.

Similarly, the debts that lie underneath many households (and some businesses)haven't miraculously disappeared.

Confidence is coming back, for sure, and the Bank's new GDP growth forecast for this year – north of 3% - signals real momentum.

But don't get lost in debates about whether the precise nature of Mr Carney's forward guidance was right or wrong.

Economists are now expecting the first rate rise to take place in Spring 2015, with the base rate having risen to a forecast 2% by 2017.

Whatever technical changes have taken place, Mark Carney's most telling comment in Nottingham was – and remains – this: "As you see things picking up, don't worry that the rug is going to be pulled out from under you too soon."

Is the number up for Northern cities?

A FEW weeks ago The Economist magazine took the brave step of suggesting that some northern towns and cities were in such dire straits we should abandon them and bus residents elsewhere.

Well, it didn't put it quite like that, but its analysis of the way places like Middlesbrough, Burnley, Hartlepool and Hull absorbed huge sums of public money without their economies making progress was put forward as a reason for switching the money to more promising locations and providing transport links to their jobs.

The Economist's article was a clinical analysis of some unpleasant facts: unemployment rates in these towns are double the national average, young people are draining away and their high streets are "thick with betting shops and payday lenders, if they are not empty."

In other words, their economies are no longer working in a sustainable way.

It pointed out that fortunes have been lavished on regenerating them when the economy was booming, often on "grand projects" which could not survive without life support from the taxpayer. That life support has gone, and The Economist's conclusion was that Government money should focus on helping people rather than propping up places.

How? "That means helping them to commute or move to places where there are jobs – and giving them the skills to get those jobs."

There were some predictable outpourings of rage. Some of it was genuine pride in cultural identity, some of it was political bluster from people who probably have a few questions to answer (the most serious implication of The Economist's analysis was that giving businesses and people incentives to come and set up in these towns is propping up local politics, not local economics, and diverting business from places where it might be more successful).

Hull's response was cleverer than that. And it'll interest Nottingham.

Academics from the city's university pointed out that the 'facts' about Hull that The Economist's analysis was based on weren't accurate because they were based on a political boundary not economic reality. In other words, it had missed Hull's affluent suburbs.

Sound familiar? Nottingham has struggled in numerous rankings for exactly the same reason. In business, we know the city as capital of the East Midlands, one of England's eight core cities and a pretty attractive location which mixes big business, entrepreneurial vitality, academia of international standing, an attractive lifestyle and some beautiful places to live.

Yet the official statistics about poverty, health and education make for a miserable roll-call of below average readings. Why? Once again, because the data is taken from a tightly-drawn inner city political boundary – not the functioning social and economic entity that includes the likes of West Bridgford, Wollaton, Arnold and Mapperley.

The traditional response is that these local government boundaries should therefore be changed. This raises all sorts of political issues (not least self-interest) and seems unlikely to happen anytime soon.

In any case, there's a cheaper and quicker way of doing it – simply adopt the methodology used in the University of Hull's (miserably-titled) "index of multiple deprivation". It looks at all the relevant measures in a series of concentric circles from the inside of a city to the outside, reflecting the way a city functions rather than its politics.

As The Economist points out, cities and their conurbations don't always form neat circles so the index isn't infallible. Nor should such measures be used to suggest that things are OK on average when festering problems remain unsolved. 'Inner' Nottingham's education issues are serious and need serious attention.

But they need to be seen in context. There is clearly no need to hop on a bus and abandon Nottingham - quite the reverse, in fact. The numbers about the city need to make that abundantly clear.

RBS, GRG and the reasons why small firms couldn't borrow

TWO reports about banking have emerged blinking into the daylight in the past few days and neither makes for pretty reading.

One is entrepreneur Lawrence Tomlinson’s sorry tale about the way a restructuring division of Royal Bank of Scotland, known as GRG, allegedly elbowed viable businesses down a slippery slope into failure which ended with another bank subsidiary, West Register, making a tidy profit on the sale of property assets.

Quite rightly, this grubby episode is now under investigation, and one of the cases the probe would do well to dwell on is the way Kevin Riley’s River Crescent apartment development on the banks of the Trent in Nottingham ended up in administration.

Despite the lurid headlines, it’s actually the other report which matters more. Sir Andrew Large’s ‘RBS Independent Lending Review’ looks at RBS’s lending to SMEs before and after the credit crunch and goes a long way towards explaining why small firms have found it hard to get finance since 2008.

RBS/NatWest isn’t the only bank in the SME lending market and I suspect others will have had similar issues. But it is the biggest player and the failings outlined by Sir Andrew lift the lid on why the problem has occurred.

There isn’t room to cover all the findings of a 36-page report here, but it’s worth dwelling on some of the detail.

For starters, it’s important to understand that lending to small firms shouldn’t go back to pre-crisis proportions for two reasons.

One is that before the crisis they were given too much money. It’s now estimated that by 2009 UK banks in total had loaned as much as £30 billion more than the sector was really capable of repaying – a situation which has now been thrown into reverse, with as much as £35 billion too little since.

In between the two lies what should be a prudent level of SME lending – a total stock of bank lending of around £200-210 billion.

The reason why lending ballooned out of control in the run up to the crunch lies in lax lending policies. In some cases, RBS agreed loans not because of a borrower’s trading performance but because the business owned collateral in the form of a property asset which was rising in value. On that basis, many loans were doomed to failure.

Even after the credit crunch hit and the bank ran into trouble, it didn’t pull the shutters down. In 2009 it had budgeted for a substantial amount of SME lending – but it couldn’t get the money out of the door because of a mix of its own turmoil and an economy which was in no fit state to absorb it.

Unsurprisingly, RBS has since taken some fairly drastic action to try to repair both its balance sheet and the way it operates lending. What may surprise us that some of this drastic action appears astonishingly basic.

RBS acknowledges that in the run-up to the crunch it had casually waved goodbye to experienced relationship managers which hindsight demonstrates it sorely needed. While some wise heads remained, others were ill-equipped to understand businesses or industry sectors and driven by incentives which skewed the decision-making process.

So, RBS has since introduced a training and accreditation programme for relationship managers, including a professional qualification.  But didn’t it have one before?

Similarly, it’s changed the lending criteria, the process for very small businesses beginning with a basic affordability test followed by the kind of credit scoring that routinely goes into a personal loan. For bigger customers the relationship manager can make some delegated decisions, but those that fail his scorecard criteria or go beyond his financial authority are referred to a credit officer who puts smaller, straightforward applications through a data template or bigger, complex ones through a bespoke process.

Finally, its commercial banking operation now includes people with specialist knowledge of certain industry sectors. Again, why on earth wasn’t this standard practice anyway?

Sir Andrew’s report makes clear that since the credit crunch RBS appears to have sorted out all its internal problems. The problem, though, is that this hasn’t translated into more lending – and surveys show that up to a third of SMEs think the bank still isn’t open for business.

When you realise that as recently as last year RBS’s own staff ranked lending a distant third in their list of priorities (well behind getting deposits and protecting against risk) that doesn’t come as a great surprise.

That’s not the only hurdle still standing in the way of a proper level of prudent lending to small firms by RBS

As that pendulum swing in total bank lending to SMEs shows, relationship managers and credit officers have become too risk averse, turning down applications which Sir Andrew says they should be approving.

Worse, the bank’s whole approach to business and commercial lending is split between different divisions and different teams with different objectives.

This goes beyond the fact that some of the people who deal with business most often are not business bankers but retail banking staff. It is where the whole Global Restructuring Group controversy raises its very ugly head.

GRG is meant to manage the bank’s relationship with business and commercial customers whose businesses have hit trouble. But Sir Andrew’s report shows that it is a standalone entity, a profit centre in its own right, and that even the bank’s own business and commercial divisions couldn’t see what was happening to customers who disappeared into it.

The ugly mess which surfaced in the Sunday Times is the end result: it still smacks of the practices of the Fred Goodwin era where the bank’s  profit chasing got out of kilter with the economy and customer need

Sir Andrew’s report suggests that these messes are largely history and that the bank is in much better shape to deliver the service it always should have done – prudent, well-informed lending which made the most of market opportunities.

The problem is that many SMEs just can’t see that yet, and Sir Andrew almost seems puzzled as to why that’s happened.

I’ll give him a clue, here: another one of RBS/NatWest’s post crunch blunders was in waving goodbye to seasoned communications officers working in the regions – trusted people who knew how to get a message across.

It still hasn’t repaired that damage. When I spoke to the bank yesterday about its treatment of Kevin Riley in Nottingham the response came in the form of a statement from Edinburgh. And its two ‘regional’ communications people are based in London.

RBS is a bank which became too big and too centralised in its outlook, property-based profit chasing leaving it blind to a boatload of trouble. Now, it’s probably in a much better position to lend well and deliver more valuable relationships to SME businesses.

Here’s hoping it doesn’t turn into a distant giant again.

HS2's timetable troubles

Has HS2 suddenly hit the buffers?

Some of its opponents might be suggesting that today after a report from the National Audit Office basically said Government hasn't made a very strong case for it.

But if you read the report (as I have) you'll realise that its heavily nuanced language does not say that the case cannot be made. Rather, it says it needs to be made clearer.

So the NAO is really saying that the case for HS2 is not clear...yet.

Nevertheless, its analysis of the Government's work on HS2 so far has plenty of ammo for opponents.

The cost-benefit analysis is poor because it contained errors, the business case is built partly on data which is in some cases more than 10 years out of date.

Then there's the small matter of an apparent £3bn funding gap in the first phase, and a challenging timetable for that first phase to actually get going.

Civil service insiders will tell you it's a must-do-better warning shot rather than a damning verdict. The money almost certainly can be found and ministers were already revising their case for HS2 when the NAO was drawing up its report.

Neverthless, the NAO's report reads like an analysis of a hard-pressed government department trying to push through an enormously complicated project to a tight timetable when it's short of expertise. The big risk there is that expensive mistakes are made (remember the West Coast franchise fiasco?).

What about Nottingham, which is hoping to benefit from an HS2 station at Toton in stage 2 of this £30bn project? The positive is that the NAO believes the economic benefits of the second stage should be much stronger than the first stage.

But if its warnings about the first stage timetable are proved accurate our long wait for that second stage may be longer still.

HS2: Why the race is on for Nottingham

HS2 sounds like a fabulous opportunity for Nottingham. But we also have to recognise that it’s a potentially significant competitive threat.
So may be the fact that it’s 20 years away is not necessarily a bad thing.
Examining the route it will take tells you three things: that the project is almost certain to run into opposition from people whose properties are likely to be bulldozed out of the way, and that it is an extremely ambitious civil engineering project.
In the East Midlands alone, the route tunnels directly underneath the runway at East Midlands Airport, under the M1 at two points, over rivers, through residential areas.
The third thing? If it stays anywhere near on budget I’d be amazed.
But the challenge. Being 51 minutes from London, just over 20 from Birmingham and a similar sprint to Leeds sounds like a major opportunity. And that’s the way it should be seen – an opportunity to get across the benefits of Nottingham to cities and conurbations suffering the economic and social pressures of crowding and expense.
And the benefits of Greater Nottingham and beyond and as a business and leisure destination: brilliant transport infrastructure, an international centre for life sciences research, a global centre for data analytics expertise, what should by then be a burgeoning digital/creative quarter, a thriving enterprise zone, clean technology expertise, and proximity to the high-tech engineering giant that is Derby.
HS2 could solve staffing problems for some of our indigenous businesses, too, putting them in touch with a wider pool of talent.
But HS2 also means the pressure is on Nottingham yet again to get itself into an attractive shape as a place to live and thrive – great shopping and leisure, first-rate visitor attractions, high-quality schools, a clean and safe environment.
We need that major retail development to happen so that Broadmarsh gets tidied up and the Victoria Centre modernised. We need to make the most of the castle and Robin Hood. And what about a Museum of east Midlands Industry somehwere between Nottingham and Derby (may be nearer Derby, because of a heritage that stretches from Arkwright to the best jet engines in the world)?
Much has been achieved here over the years. But HS2 means we will be compared with bigger, better places and raises the bar.
It isn’t just a train that’s barrelling down that high-speed line. It’s a big challenge.

Nottingham's hidden creative heritage

A few weeks back I blogged about the potential for a serious creative quarter in Nottingham, dwelling on remarks made by venture consultant and commentator Lucy Marcus, who suggested this wasn’t something that state intervention could manufacture.
In short, her point was that a creative quarter would happen only if the creative industries in Nottingham had enough momentum to make it happen - money can help, but it can't invent it.
In view of the fact that Nottingham City Council wants to use part of its £60 million City Deal to develop a creative quarter, this is an important question.
Nottingham's creatives are certainly trying to deliver an emphatic answer. And it may be that there’s more of a heritage of creative and technical achievement in the city that conventional analysis suggests.
Outside the realms of industrial classification, most people will tend to see the creative industries as either something artistic, perhaps wandering into fields of design, or 'tech’ – which is stuff like computer programing, isn’t it?
That’s not wrong. But it doesn’t come close to doing justice to the breadth and depth of creative, technical, research and scientific activity which takes place in the city right now.
Or, more importantly, of acknowledging how long it’s been happening for and understanding where its strength really lies.
In design terms, our creative heritage is epitomised by Sir Paul Smith. And this was, once, an international centre for the textile trade. Through Nottingham Trent, it still produces graduate talent in this field. It's a tough game to make money in, though.
Nottingham’s right to a place at the top table in life sciences and pharmaceutical discovery is well-established, based on the discovery work that used to be done by the likes of Boots (Ibuprofen was discovered here) and the research carried out by the University of Nottingham in particular.
But something else has happened since then that might not be as well recognised. Thanks to the emergence and growth of businesses like Experian and the arrival of the bank Capital One, we now have the best part of a 20-year track record in a field known as data analytics.
This is the story of Experian, founded here and now a global leader in the fields of forecasting and analysis around consumer and business financial behavior. Its multi-faceted demographic tool, Mosaic, is almost a map of the way we live now.
It's the story, too, of Capital One, the US bank which set up its European headquarters in Nottingham. It is very much a can-do corporate, all the way from being a regular in the great places to work charts through to giving its own analysts time to indulge new ideas.
The end result of their presence can be seen and felt in three areas: in other financial services businesses, like Ikano, tapping into a talent pool; in start-ups like HD Decisions, launched by people who found their feet in the two biggies; and in knowledge graduates - people whose degrees deliver skills suitable for programing, analysis and software tools and apps - deciding to stay in Nottingham.
Along with the existing science research, these firms have become another reason for specialist legal and accounting expertise to maintain a presence here.
I was chatting last week to Mark Onyett, the engineer and ex-Capital One exec who co-founded the credit and risk software and services firm TDX (on course to be the city's next £100 million business).
Onyett's journey and his entrepreneurial outlook put him in a strong place to understand the kind of message the city needs to be giving out to the students, start-ups, businesses and backers who might drive the creative and tech sector here.
Again, this is a knotty issue. Identifying a distinctive message won't be easy in a world where local authorities everywhere are fixating on their own mini-me of Shoreditch and Silicon Roundabout. But Onyett thinks we're more plausible than most.
"I'm not sure I'd go for Maid Marian Roundabout!" he says. "It's got to be about the future. How about something like 'For the next generation, come to Nottingham'?"
Next generations don't just appear and you can't invent them, even with a wodge of money. They evolve from what's already been happening.
And that's the point about Nottingham: creative and tech has been happening here for longer than we think. Only now are we beginning to realise what we've got.

Elected Mayors: The Vision Thing

Nottingham: trying to find a vision?

There’s been a fascinating contribution today to the debate about whether Nottingham should vote for a directly elected mayor.

It’s from a Labour politician, and it’s in the ‘anti’ camp. But it doesn’t mention anything about ‘£1m Tory extra Mayors’ on ‘fatcat salaries’.

Infact, some are bound to view this support for the campaign against an elected mayor as a devastating critique of some of the people behind it.

The contribution comes from Alan Simpson, who was the Nottingham South Labour MP up until the last election, when he retired and the seat was taken by Lilian Greenwood.

Simpson was never a great mate of the city leadership, and there will be a few in Labour who think his piece settles a few old scores.

But there will be a lot of people involved in business, in particular in property and development, who will agree wholeheartedly with some of Simpson’s observations - even if they are actively supporting the pro-elected mayor campaign.

Indeed, those criticisms are probably the reason why they support it.

You can see Alan Simpson’s piece here. To cut to the chase, he argues that an elected mayor simply doesn’t address what he claims is the big issue in Nottingham politics: its lack of ambition and vision. While he acknowledges some significant achievements (like the tram), he points the finger at the city council leadership over its refusal to publish full details about finances and a lack of genuine, big picture imagination. He also takes a swipe at the Tories and the Lib Dems for ineffectual opposition (though I suspect city boundaries count against them).

Simpson says: “Good governance demands strong Opposition as well as visionary leadership. Nottingham has neither. This is the Council’s Achilles Heel. To demolish the case for a mayor, it must open its own books and then be more imaginative.”

He describes Nottingham as a “second division” city, and adds pointedly: “…we have to break from a culture of contentedness that holds the city back. Pride and ambition are not qualities you can claim for yourself, without inviting ridicule.”

This plays to one of the central criticisms of the ‘anti’ campaign: that its relentless focus on the negative demonstrates exactly that point about the absence of the vision thing. Where it could be pointing to achievement and ambition under the current system, or painting a picture of a dynamic future, it instead drones on about the cost of a mayor, the risk of corruption and who’s paying for the yes campaign.

The case for an elected mayor isn’t proven, and Simpson says cities need real power rather than real figureheads. In that context, he thinks an elected mayor would be a sideshow.

But in Nottingham the ‘marmite’ flavour of the current leadership and its failure to give voice to an alternative vision leave the Yes campaign in a potentially strong position. What is most likely to count against the Yes camp is an issue which should cause serious concern on both sides – voter apathy towards politics and politicians. The turnout looks like being low.

Nottingham has a tantalising opportunity to develop an ambitious and genuinely challenging vision for the future, and Alan Simpson’s painfully blunt critique suggests one is sorely needed – whichever system we have.

I go back to the point I made in my last blog: Nottingham needs to think bigger in terms of its boundaries. Simpson suggests those boundaries also appear to encircle the council’s vision like a philosophical wall – that the city’s very horizons are just not wide enough.

You decide which way is best to unlock the potential. It’s YOUR city.

It IS the Budget for Growth...next year

So it’s good news for 330,000 people and good news for 24 million people. But not until next year.
The point to bear in mind about both of these headline grabbing measures is that they won’t cost George Osborne a penny in 2012-13. So he’s effectively trailed next year’s Budget.
The 24 million are the people whose personal allowance will rise substantially next year, putting their tax-free income up to more than £9,200.
The 333,000 are those liable for the 50p top rate of income tax, which will be cut to 45p from April 2013. The line from the Treasury is that the 50p rate isn’t raising any worthwhile revenue, suggesting high earners are taking some income as dividends or not taking it as income at all.
So as I said last night, 45p looks like a more ‘optimimal’ rate – low enough to encourage payment, high enough to yield some decent tax revenue.
And it’s apparently bad news for Nottingham, which didn’t get the cash it hoped for from the Super Connected Cities initiative. It had asked for a comparatively modest sum (around £8m), to fund ultra-high speed broadband embedded in the tracks of the new tram lines.
I don’t think the game is over on that one, though – I suspect the City Council will try to secure the funding from other sources, so watch this space.
The burning question, of course, is whether the headline cut in Corporation tax – which goes down to 24% more or less immediately – will help businesses to put their hands in their pockets and invest.
There’ll be more insights later.

It's the Budget for Growth...or is it?

So, it’s a Budget for growth, which maintains the focus on deficit reduction and brought forth a fairer tax system while failing to tackle unemployment, risking a double dip and missing an opportunity to invest for the future.
And that’s before it’s even been delivered.
The political interpretations of what George Osborne will say in his third Budget are well-rehearsed to the point of staleness.
The point to remember about most Budgets, particularly those delivered during any kind of downturn, is that they have to be neutral – in other words, what the Chancellor giveth, he almost certainly hath to take away.
There are three potential exceptions to this rule (though they’re more likely to surface next year, when the Budget is almost certain to be written with an election in mind).
One is better-than-expected government finances allowing some cash to be thrown at a rabbit-out-of-the-hat Budget stunt. Logic suggests this would be directed at low or middle-income people – putting money in your pocket always works. Just don’t expect much of it.
Second is internal Treasury forecasts suggesting that a pick-up in the economy will yield more tax revenue than government scenarios suggest. Cue a decision to ‘invest the proceeds of our strategy’.
Third is a financial mechanism which allows government to effectively step outside its normal financial rules. An example: the decision to take on the liability for the Post Office pension fund will give the government a one-off accounting gain of £28 billion. In this case, it’ll come straight off the deficit...but a cunning politician might view that as £28bn not needed from elsewhere.
Not this year, though?
If the Chancellor goes ahead with the plan to drop the 50% tax rate on earnings over £150,000 to 45% it will be pilloried for robbing the poor to give to the rich.
In all likelihood, he will have settled on an optimum top rate: the 50p rate has yielded hundred of millions in revenue, but an efficient income tax usually delivers billions – suggesting some entrepreneurs have chosen to take income as dividends or not taken it as income at all.
So while 45% sounds like a cut there’s the possibility it will bring similar tax revenue to 50%.
George Osborne – who is established now as a tough decision-maker who doesn’t play to the gallery – seems unlikely to go for too many stunts. The economy isn’t yet stable enough for that
There has to be a growth message in the Budget because that is the quid pro quo for continued business support of deficit cutting.
In Nottingham’s case, we will be looking for an announcement that our city is among those receiving money to invest in super high-speed broadband (to be buried in the tracks of the tram network).
We will be looking, too, for new schemes which give opportunities to bid for funds.
Government is now desperately hoping there will be no further significant economic shocks this year.
Last year, tentative signs of progress were well and truly snuffed out by the eurozone pantomime, which led instead to a focus on negative economic news.
This year, there is a desperate appetite among business to accentuate the positive. They’ve had enough of recession doom-n-gloom.
Over to you, George.

Au revoir MIPIM 2012



My Range Rover parked at Cannes...in my dreams



There’s something almost comfortingly familiar about a four-day trip to an exotic sun-drenched Riviera resort ending in an Irish bar with your ear drums being hammered by 1980s disco music.

But that’s how Nottingham’s mission to MIPIM chilled out last night. There were some notably impressive performances by ‘DJ’ Ashley Cowdrey of M&E firm CPW and the impossibly hip Tim Garratt of Innes England, but those shocking revelations are for another day (or sensible negotiation).

Before you run away with the idea that Team Nottingham’s trip to MIPIM has been a thinly-disguised journey to the usual boozy haunts, let me reassure you that the downtime has been well-earned.

The model Nottingham has adopted for MIPIM is a solid and sustainable one: a core of private sector property and construction industry businesses paying their way and bringing key public sector decision-makers with them to let would-be investors know that great development opportunities will not sink under a painful planning process.
David Bishop, Nottingham City Council’s corporate director of development, maintained a professional distance from raw deals while offering authoritative reassurance that planners understood what business was trying to achieve.
Solidly supported by the widely-respected Lorraine Baggs, the city’s head of inward investment, and the seasoned experience of Mike Taylor, head of Nottingham Regeneration, the council team provided a back-up which added authority to the whole delegation and off-the-cuff advice at the kind of impromptu meetings which dominate MIPIM.
If you want to criticise the glitz and glamour of MIPIM you can, because Cannes has a lot of it. The closest I came was nearly being glued to the tarmac by a be-chromed Bentley driven by someone for whom pedestrian crossings and the people who use them were clearly an inconvenience too far.
I’m ashamed to say that I showed my appreciation of his driving in the traditional English manner.
If you haven’t been to MIPIM what you have to get your head round is the fact that this is a veneer of glitz and glamour (and sometimes grossness) which comes from a Riviera resort within spitting distance of Monaco, the place where millionaires and billionaires go to look at their money.
The veneer is there to serve them, not the likes of Team Nottingham or most of the other ordinary business people who come to pack into four days meetings which would otherwise take months to tie down.
The truth is that this isn’t a playday away from home, but a frequently foot-destroying round of meetings and discussions which stretch from dawn until dusk.
The results of those meetings I’ll write about in Business Post on Tuesday. For now we’re well beyond dusk and Cannes has gone quiet.
But Nottingham has come away with a lot to talk about.

MIPIM: Another away win for Nottingham

It began in Derby, wandered through some of the best cities for business in Europe, and ended in a pizzeria not far from the yachts that bob up and down in Cannes harbour.

Such was the second day at MIPIM.
I reflected yesterday on what Nottingham had to offer the biggest property and development exhibition in Europe, but today began with a breakfast reception for what is grandly characterised as the Derby Embassy, the slogan for the travelling show that is Marketing Derby.
Unlike Nottingham, Derby has managed to pull together a comparatively substantial public sector budget which supports not just the activities of Marketing Derby but a walloping chunk of commercial projects ranging from phase one of a spec office development in Derby (elsewhere, no one digs earth without a prelet) through to a comprehensive revamp of Derby City Council’s HQ, and half the lease of the old Egg call centre (a deal which has enabled Indian-owned Hero TSC to set up a similar operation in the same building).
Fair play to Derby. It punches above its weight at an exhibition where many similarly sized conurbations simply don’t figure, and has a cohesive message which other locations will be jealous of (notably Leicester, which I’ll come on to in a moment).
The strength of its focus has already been well-illustrated by its refusal to take the decision which lost Bombardier’s Derby factory a huge rail contract lying down, and the fuss it made has almost single-handedly led to government looking again at the whole issue of large-scale public procurement rules.
Leicester, by contrast, is a curiosity. This is another substantial Midlands city which has a strong economy with plenty of hefty businesses and logical opportunities. So why isn’t it at MIPIM? The few people from Leicester who are here certainly felt jealous of what Nottingham and Derby are up to, wondering why there was no marketing material about their own city to hand out.
England’s provincial cities do get noticed at MIPIM because they talk tangible opportunities rather than grand, barely believable visions. Birmingham and Manchester have thrown several hundred grand at their presence and there is an expectation that they will be here.
Even though its presence is comparatively small-scale and supported by the city council rather than paid for, Nottingham’s presence has been discreetly effective. It made headlines on one of the big property consultancy stands, and it was rubbing shoulders with some of the biggest locations in Europe yesterday when it received an award as one of the best micro cities for business.
The award came from FDi Intelligence, a division of the Financial Times, and ranked Nottingham ahead of Geneva as a business-friendly location.
Stockholm, which won the main FDi award, has plastered its name all over the entrance to MIPIM. I’m not suggesting Nottingham should do the same, but there is every logic in gently ramping up the city’s marketing budget to support an award which has put us front and centre on an international stage.
Those who don’t come to MIPIM will inevitably focus on the yachts and the money because they make easy pictures and easy headlines. For many cities, that’s just not what MIPIM is about.
Sure, there will be some cities smooching would-be investors at some very expensive tables in Cannes. But not Nottingham. Last night it was largely in a pizza parlour reflecting happily on another day and another good win.

Nottingham's empty shops: Behind the headlines

One-third of Nottingham’s shops standing empty? Doesn’t sound plausible, does it?
But that’s what the Local Data Company is telling the rest of the UK today.
Its national retail vacancy report sends out an apparently troubling message about one of the city’s key industries. But the consensus among people I spoke to yesterday is that LDC’s number just doesn’t ring true.
One city property agency (FHP) says the vacancy rate in the retail core – excluding tertiary locations – is less than 14 per cent. The City Council says it is 17 per cent. But that’s still 12 per cent shy of LDC’s eye-popping 29.6 per cent.
And LDC recorded a vacancy rate of nearly 30 per cent only six months after another consultancy, CACI, said Nottingham was still the fifth biggest retail destination outside London (by spend) even without the redevelopment of its shopping centres.
Hero to zero in the space of six months? Sorry, I don’t buy it.
So what’s underneath all this? As I’ve blogged before, LDC’s methodology is bound to produce a higher vacancy rate than other surveys simply because it counts more shops. Whether it’s right to do so is a moot point: while most of us view the city centre as being bounded by the two shopping centres north and south and the Castle and the Contemporary east and west, LDC goes much further, counting shop units as far afield as Canning Circus and Sneinton.
It does this because it has chosen to employ across the country geographical definitions of city centres provided by a single, supposedly authoritative source – the government’s Department for Communities and Local Government. So it can say it’s applied a uniform standard everywhere.
Yet it may still be wrong.
With the best will in the world, the likes of Canning Circus were never part of Nottingham city centre and ceased to be thriving retail zones many years ago. So you can argue that the map which defines this survey is, quite simply, out of date.
LDC also walked around the ‘city centre’ back in November – just at the point when Westfield had cleared out many of the units in Broadmarsh prior to its aborted redevelopment. So while they were definitely empty, it wasn’t for reasons related to the health of Nottingham as a retail destination.
So there is just cause to question LDC’s number - and, more importantly, the impression it is almost certain to create. Believe me, some sections of the media will be saying that Nottingham’s allegedly poor performance is yet more evidence of recession/retail woes/cash-strapped consumers/the impact of online shopping etc [delete according to agenda].
There may be a degree of truth in those analyses, but none is an accurate picture of what is happening here. LDC should have qualified its numbers.
Commercially, FHP’s survey – while not independent - is much sharper. Like most agents, it knows when shops are ‘between lets’ (empty, but a new tenant has already signed a lease) so doesn’t count them. It also knows which parts of the city are performing assets and which need a new lease of life.
This, surely, is the real issue underneath not just LDC’s survey but the failures of some retailers, the vacancy rates in secondary and tertiary locations and the growth of online retailing, be it by laptop, tablet or smartphone.
On that basis, LDC director Matthew Hopkinson is on more solid ground when he suggests Nottingham’s planners should not dismiss the bigger picture in its survey.
He told me yesterday: “Retail destinations should not deny reality or stick their heads in the sand. If all you do is what you are already doing you will keep the problems you already have because the world is changing.
“Large cities and smaller towns need to shrink their retail core to reflect the fact that demand is moving away from high streets. We need to bring people back into city centres, both by encouraging them to live there and by holding events which bring them in.”
Nottingham is probably entitled to take a well-informed swipe at the headline figure LDC has published (though it needs to do that nationally rather than locally; few here are likely to take the number too seriously).
But social, economic and technological change will not go away. If Nottingham wants to demonstrate that it remains in the vanguard of leading retail destinations then the most powerful statement it can make will be in visionary planning policies.

When the A453 speeds up, so will the economy

The reporting of the Chancellor’s Autumn Statement (that’s the mini Budget he said he was getting rid of) has been almost ritually gloomy
Growth worse than forecast, borrowing worse than forecast, cuts worse than forecast, unemployment worse than forecast (that’s enough worse than forecast – ed.)
There are a couple of reasons for the headline gloom-fest. For starters, this is not what George Osborne said would happen, and it lands him in a suspiciously similar position to his political opponent, Nottingham High School old boy Ed Balls. So some would say he is properly being held to account, others that it’s political schadenfreude.
The second reason is that we appear to have a fixation with news agendas:
“I think it’s grim, what do you think?”
“Well, yeah – it does sound grim, doesn’t it?”
“Terrible, pretty grim really.”
Now, it would be a brave person to stand up and suggest anaemic UK growth and the euro zone horror story signal that happy days are here again.
But I’ll try to dial in a little bit of perspective.
Besides a potential hiccup in this quarter and the next (that’s the R-word or the Double-D phrase), the economy is likely to grow a little bit over the next year.
As that’s a national average, some regions of the UK are likely to grow more than others.
The East Midlands looks like it’ll be one of them.
I says that because I saw a piece of research towards the end of last week from the Institute for Public Policy Research which analysed when employment in the regions was likely to get back up to its pre-recession peak.
Some of its research does sound, ahem, grim. Northern regions may not see employment peak again until 2018 or beyond. That’s a lost decade.
But other regions will see it return to the high by 2014. And we’re bracketed together with the south, south east and east of England in this group.
One more point of perspective. Whether it was courage, confrontation or carelessness, the Chancellor chose the day before the public sector pensions strike to announce that these workers could also look forward to pegged pay increases and more job losses.
In total, the Office for Budgetary Responsibility is now estimating that more than 710,000 public sector workers will have lost their jobs by 2017.
In isolation, that’s a huge number. But, as I’ve blogged before, it is a proportionally small part of the economy – of the UK workforce of 30 odd million, 6 million are employed in the public sector. So the job losses would amount to less than 2.5% of our total workforce, and over that length of time at least some of those jobs will be replaced by private sector growth (not as many as George Osborne would hope, though).
Besides the raft of measures aimed at encouraging lending to small and medium-sized businesses, the major headline for us was that we finally appear to have dragged the A453 widening project over the line.
After only 30 years of trying...
This single carriageway link between Nottingham, the M1, East Midlands Airport and the East Midlands Parkway railway station has accurately been described as the biggest car park in Nottingham.
Beyond the jokes, it has cost the local economy millions in delays, and Boots dropped some heavy hints in private that it regarded progress on this project as a factor in future investment – especially after the decision to turn part of its sprawling and under-utilised campus into an enterprise zone.
While we don’t have a definite start date, that project will now begin before 2015, which is earlier than expected. Turning it into a four-lane road should reduce congestion and cut journey times.
More significantly, it is also likely to open up swathes of land for residential and commercial development, and I wouldn’t be in the least bit surprised to see land transactions and planning applications start to shift in this area.
We can’t kid ourselves – it’s going to be slow progress for a while now. We could well have a situation where, when the A453 finally speeds up, so does the economy.

Is High Pay Commission really tuned into business growth?

I blogged a few weeks back about the High Pay Commission, and it was in the news again over the past couple of days.
If you don’t want to track back through the link, here’s the resume: the High Pay Commission isn’t a Commission in the normal sense of a heavyweight, government-sanctioned probe into a matter of major concern. It’s a one-year project funded by a left-leaning think tank which wants to influence government policy. So the name’s a bit of a fib.
And though it is clearly all about what goes on in the upper reaches of stock market businesses, it doesn’t involve any business people. This Commission’s members are academics and a couple of well-connected London journalists.
The Commission’s mission is written all over its name: a belief that senior executives get paid way more than most, and probably don’t deserve it.
It’s in the news again this week because it has published its final report. It finds that executives right at the top of big stock market firms enjoyed pay rises which disappeared into space, compares that to the less-than-stellar performance of their businesses, and wants other people to have a say in executive pay in future. So no surprises really.
I’d be amazed if anything happened, though, for three reasons.
One is that a government grappling with no growth probably has neither the time nor the inclination to launch into an issue which risks being portrayed as dis-incentivising businesses at the cutting edge of the economy (indeed, Business Secretary Vince Cable has already kicked the Commission’s proposals into the long grass by saying government will look at some proposals next year).
Secondly, some of them sound like Utopia-meets-the-boardroom. The idea that any business would want employees sitting on a committee voting on a proposal about how much the boss gets paid is unrealistic. Why not stop there: we could have selected employees also voting on the sales strategy, couldn’t we? No, actually – it would be stupid.
Finally, while reining in top pay might make ordinary people feel good it will do nothing to make them wealthier. The answer to that is enabling economic growth, not disabling executive pay.
And this is the beef with the High Pay Commission. It’s an entirely London-centric concept: backed by a London think tank, run by people based in London and focusing on a small part of the business universe which is centred on London.
It seems to think silly salary packages doled out by global enterprises should be a big issue for the UK government. But is this really where the action's at?
As I said in the earlier blog, many ordinary business people have no more time for the PLC world than the High Pay Commission does. They think it’s too short-term, and have little respect for stock market chief executives or their jackpot pay packets.
But they don’t lose sleep over it. The big issue for them is the continuing inability of government to act like it gets SMEs – the real bedrock of the economy – on any level.
If it did, there would be fewer rules and regulations, cleverly-targeted tax incentives, better access to finance, and a serious effort to solve the continuing problem of school and college leavers who don’t understand what it takes to hack it at work.
The High Pay Commission’s proposals simply do not register on the radar of key business concerns.
But perhaps they weren’t meant to. Protests not so very far away from the Stock Exchange (and mirrored in Nottingham’s own Market Square) have been making a lot of noise about inequality and unfairness. The Occupy movement is anchored in a belief that capitalism, having landed us all in the soup, is just carrying on like it’s someone else’s problem.
Against that background, PLC bosses paying themselves fortunes according to obscure formulae which seem to come up trumps whatever the weather hardly seems like the stuff of civil society.
So the High Pay Commission is not divorced from reality. It makes some powerful points about the relationship between attainment and reward and public companies’ obligation to fairness.
But the anti-big business rhetoric we see so much of these days is in danger of obscuring a greater truth: that the vast majority of businesses simply aren’t like that, and that it is these businesses that our economic recovery hinges on.
I said in another blog that we were in an era where business has to work a whole lot harder to win public respect, and might start by pointing out the huge contribution it makes to the wealth and wider wellbeing of the communities we live in (don’t forget that 80% of jobs are in the private sector).
If it did, then may be London think tanks would think beyond PLC pay packets when they ponder the best way for business to bring wealth to a wider audience.