Hartlepool has an interesting electoral history. Not so long ago it voted in the town’s football mascot H’angus the Monkey as mayor. Before that it kept returning Peter Mandelson to Westminster. Now the constituency by-election four weeks today is set to return its first Conservative MP since Macmillan was in No 10.
The town is also home to a world-class steel pipe mill for the international oil and gas industry. This would have been at the front of Boris Johnson’s mind on a visit to the northeast last week when he unequivocally asserted that the British steel industry cannot be allowed to fail, especially at this early juncture of Project Brexit.
Liberty Steel Hartlepool is part of Sanjeev Gupta’s GFG Alliance. Gupta has done himself no favours by moving into a £42 million Belgravia home and wintering in Dubai while furloughing many of his 5,000 UK workers, who all now fear for their jobs. Nor by financing his empire with money from an exotic financier employing an absurd former prime minister.
But Gupta has done us all a favour by posing the question: is his steel business worth saving?
If the answer is “yes”, then the court of public opinion appears to have ruled that it should not be owned by Gupta. But if not Gupta, who? If there is no private sector solution, then should the taxpayer step in?
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Politicians know, if they can concentrate long enough, that steel, like chemicals, is a foundation industry that if it fails disrupts swathes of the UK industrial supply chain, including the valuable aerospace and automotive sectors. Those who don’t like government intervention always cite the apparent horrors of the 1970s, conveniently forgetting that if nationalisations had not taken place then there would be no Cowley car plant, Rolls-Royce jet engine factory in Derby or, indeed, Hartlepool steel mill. We are all guilty of continuing to believe the present prime minister, who has a penchant for untruths and making up policy whenever faced with a broadcaster’s mic. But if we are to take Johnson at his word, then the important bits of Gupta’s empire are of “long-term strategic importance”.
Yet this government and its predecessors have resolutely ignored pleas to make the steel industry structurally sound by addressing high energy costs, business rates and investment incentives. Rather than spouting Cummingsian three-word game show catchphrases such as “build back better”, there is no substitute for a coherent, clearly stated industrial strategy. Without it, we don’t know whether or why we should be saving Gupta’s empire. Instead, we remain in the land of crossed fingers and making it up as we go along.
Unpalatable pay
Executive pay is back on the agenda. You can tell from the recent bout of controlled explosions around bosses’ pay packets. Boards are reworking chief executives’ packages. They are not hiding it. It is all there in the mind-numbing verbiage of their annual remuneration reports. But unless there is a disabling of the detonator, an explanation of the whys often through briefings of targeted media outlets, then companies have a ticking time bomb and the potential for a big blow-up at the annual general meeting.
Boards are justifying significant upward revisions of chief executive rewards by citing the brilliant jobs they have done in this most difficult of years and that they are in danger of being poached by companies whose leaders have been less able.
Like health workers, some chief executives deserve a pay rise. It is when the increase adds up to another couple of extra million a year that it is unpalatable. Expect an interesting AGM season.
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Mutual loathing
There is something very British about the mutual, from the Rochdale pioneers to the seductive messaging — albeit a little irritating — in the advertising of Nationwide, the last of the large member-owned building societies.
The dismantling of the UK’s building societies over the past 20 years was one of the great disservices to British households. Now MPs have issued a scathing report into the proposed sale of the large mutual insurer LV=, Liverpool Victoria as was. That the buyer is a US private equity firm demonstrates LV=’s value. Yet its demutualisation is mired in opacity and doubtful treatment of its members.
The MPs’ starkest conclusion, though, is that legislation around mutuals is out of date, disables them from raising capital and leaves them as sitting ducks to takeovers. This from a bunch of legislators. If our own lawmakers do nothing to protect the principle of mutuals, then no one else will.
Honest O’Leary
A dose of realism from the biggest cheerleader for getting us all back in the air this summer. Ryanair says it will carry 80 million passengers this year. A big number, yet only half the 160-odd million that Europe’s busiest airline would be doing in normal times.
Michael O’Leary, its chief executive, has been resolutely upbeat in a bid to get people booking. Yet he is warning analysts that if they think Ryanair will make a profit this financial year they are wrong. You can’t believe much of what comes out of O’Leary’s mouth. Seven times in the past year he had to revise down passenger estimates. Yet on financial forecasts he has a strong record of underpromising and overdelivering. That is why Ryanair shares are toying with three-year highs.
