At the CEO Summit organised by The Times this week, it was striking just how much goodwill the new Government enjoys from business, particularly in areas such as taxation and, especially, the urgent need to tackle the deficit and pare back the power and reach of the State.
Also noteworthy was the pressing desire for new infrastructure investment in a range of areas, particularly transport and building nuclear power stations.
How unfortunate then that, only hours after the 100 or so chief executives were ferried from County Hall in their limos, the Government was unveiling a measure that could have been designed to rile them.
The planned abolition of the Infrastructure Planning Commission reintroduces uncertainty into the planning process and, with ministers regaining the final say on such issues, raises the risk that projects of national importance may be halted because of short-term political expediency.
The IPC was born in response to Britain’s longest and costliest planning inquiry, into Heathrow’s Terminal 5, which was completed 15 years after the initial application was submitted. That must not happen again. The recession has pushed Britain’s energy crunch further into the future but, without new nuclear build, the day when the lights go out has merely been postponed.
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The new administration, rightly, would not dream of rolling back the last Government’s decision to devolve competition issues and to prevent ministers from intervening in them. It is odd that it seems to think planning issues merit different treatment.
Home truths on takeovers
Emerson Electric’s £1 billion takeover bid for Chloride does not quite rank alongside Kraft’s raid on Cadbury. That was an attack on a much-loved British treasure, replete with broken promises on British factories and jobs.
As it happens, Chloride is a proud British company, providing important kit to keep data centres working and the lights on in buildings during power cuts — even if only a tenth of its 2,500-strong workforce is UK based.
But the Kraft case — and the political row surrounding it — still resonates. Emerson’s first approach to Chloride included a pledge to create skilled British jobs. Ten weeks later, having been forced to raise its terms by 35 per cent after a counterbid from ABB, of Switzerland, Emerson says that it “can no longer be certain that a combination with Chloride will result in a net addition of skilled jobs in the UK”. It even admits to identifying £33 million of savings through “staff and facility reductions”. With one eye on the Kraft kerfuffle, Emerson clearly felt duty bound to fess up in advance.
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Chloride’s goose as an independent company is cooked. It will shortly fall to either Emerson or ABB. Success for the latter may or may not see investment in jobs and facilities in the UK; ABB isn’t saying. But if any good is to come out of yet another British company with its proprietary technology falling to a foreign raider, then any moves towards transparency on what will happen to British jobs in a takeover deal are to be welcomed.
Grade is facing a hard sell
As far back as his days at First Leisure, where he broke up the bingo-to-Blackpool Tower combine and presided over a halving of the share price, the City has never taken Michael Grade to its heart.
With memories still fresh of his time at ITV and the shrivelling of the share price by two thirds during his reign as executive chairman, Mr Grade now finds his chairmanship of Pinewood Shepperton under fire.
At present, the criticism is only from Crystal Amber, an activist investor. With 27 per cent shareholder Peel Group supportive, there is no risk of Mr Grade being booted off the film lot.
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Yet the row has focused attention on Mr Grade’s chairmanship of Ocado, the non-profit-making internet grocery business, which plans to float. He may not be the man to sell this story to an already sceptical City.
The BBC at its most brutal
It says something when even John Ralfe, one of Britain’s top pensions experts, says he is suspicious of the BBC’s plan to shut its final-salary pension scheme to newcomers.
Given the scheme’s colossal cost, its £2 billion deficit and the prospect of hundreds of new staffers being hired when the BBC moves to Salford next year, the plan looks sensible enough.
What smells, though, are proposals to water down promises to existing scheme members. The BBC stands accused of retrospectively attacking pensions built up for past service — hitherto seen as untouchable. Such a move has not been tried by even the most brutal private sector employers.
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In money terms, pensions remain untouched, but the cap on increases in future pensionable salary means that, if members stay in the scheme, they risk seeing inflation erode the value of their pension. It looks like an attempt to force staff into leaving the scheme.
As viewers and listeners want to see their licence fees spent on programmes, not cushy pensions, BBC management deserves some credit for grappling with an intractable issue. But it has handled it clumsily — and potentially set a lethal precedent.
No winners in numbers game
Bad numbers always take longer to add up than good ones, or so the old City saying puts it.
At the moment, there is no suggestion that this is why the Office for National Statistics has delayed its second revision of the first-quarter GDP figures, but it is embarrassing for an organisation attacked frequently in recent years for the quality of its data.
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The ONS was often leant on by the last Government, particularly when Gordon Brown was at the Treasury, to flatter the national accounts.
A delay to its first major data release under the new administration has spoilt its hopes for a fresh start.