SOMETIMES the annual CBI shindig and its grandstanding political headline acts resembles nothing so much as a rostrum on which business and government can have their rhetorical cake and eat it.
Prime Minister David Cameron says he cares about treating people equally, but then puts the squeeze on judicial reviews of planning decisions. He says equality impact assessments of business policies that might affect minority groups will not be compulsory in future in order to get the economy moving.
The Mayor of London, the increasingly pantomime Boris Johnson, not for the first time goes off-piste by saying we must stop vilifying City bankers.
Apparently if we don’t stop vilifying it will damage the financial glory that is the English capital.
But BoJo then tells bankers, a significant CBI membership constituency, that they must not sit behind their “stuccoed” Notting Hill fastnesses licking their wounds, but rather make the “moral case” for banking. We are back to doing God’s work from London W11. Good luck with that one.
Johnson also urged international oligarchs who fall out of love and prenuptials to do their divorce actions in London. Don’t even go there, it will encourage him.
Business Secretary Vince Cable returned to his pet hobbyhorse of a “mansion tax” but said the devil would be in the detail. Well, yes.
The need for an “industrial Olympics” was the soundbite of CBI director-general John Cridland, while a government investment tailwind for the private business sector alternated, as usual, with the need for reduced bureaucracy as totems. The trick, as the bosses have rumbled, is to get infrastructure spend without ever referring to it as a Plan B. Ever.
Much talk of being radical on freeing up business, a bit of obligatory push-and-pull about the European Union membership, Labour’s Ed Miliband warning about not “sleep-walking” to the EU exit, the great need to support science and mathematics as opposed to Jane Austen and media studies, and it all felt like corporate Groundhog Day.
Private sector zombies giving a false picture
THE possibility that the economy’s tarnished private sector silver bullet may be even less powerful than many already suspect is a concern. New data suggests that one in ten UK businesses is, far from the lifeblood of any stuttering recovery, actually in the ranks of the corporate living dead – kept alive only by historically low interest rates and a reluctance of capital-strapped lenders to write off bad debts.
Insolvency experts and turnaround specialists say the survival of these “zombie companies” is giving an unduly optimistic picture of our fade-to-grey economic prospects.
These firms may not be worsening the liquidation statistics, the experts say, but they contribute little head of steam for recovery.
A swathe of British business is paying the interest on its debts to keep to bank covenants, but it doesn’t invest or innovate.
Those companies are treading water, losing employees and customers in a drip-drip fashion. The insolvency industry trade body, R3, says the number of businesses paying interest on debt but not paying it down rose 10 per cent to 160,000 in the past four months.
That is a classic indicator of business stagnation, and a further item for the debit side of any optimism ledger.