Archive for August, 2016

Brexit. The petulant response

To the obvious dismay of many, recent economic indicators have quickly demonstrated that Brexit has had virtually no immediate effect on the Uk economy. This is quite logical because brexit hasn’t actually been enacted but there is a point of view which claims that effect will be far less than anticipated by too many commentators and perhaps the governor of the Bank of England

You can sense the dismay and perhaps this is best illustrated in this characteristically ranting and sloppy article by Will Hutton, the high profile financial journalist who memorably campaigned hard for the UK to join the Euro

Take this passage


Further, the world’s companies come here to enjoy the UK “aircraft carrier” effect – exporting into the EU single market from an exceptionally business-friendly environment. Nearly 500 multinational companies have their European or global HQ in Britain – five times more than Germany – a major boost to our business services and commercial property industries alike.

Now the “aircraft carrier” is torpedoed – but until we know the details of Brexit nobody can tell whether it is badly crippled or sunk – along with the economic activity that derived from it. Is the end result likely to be Brexit-lite, with continued access to the single market and some compromise on free movement of people? The Tory right and their media allies will insist that is a sell-out, and will the Labour party want to be painted as a friend of immigration? In which case Britain will be compelled to negotiate trade deals with 27 EU countries, and another 52 deals with the countries with whom the EU has deals in turn. What will the resulting tariff – and indeed non-tariff – regime be?

No mention of the countries with whom the EU has not managed to negotiate a trade agreement. India China Brazil Australia and USA being somewhat high profile examples

And multinational head offices?  Dare we mention Google? Or the fact that Switzerland has a virtual industry in “multinational head offices”?

This is poor stuff and I could go on and take issue with many more points within the piece (which becomes increasingly hysterical) but the public deserves better and closer analysis of the effects of Brexit than this drivel


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Country Risk map. Latest update

 Coface produce a “country risk map” as well as a number of thorough surveys on world wide credit risk
Well worth a look
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Nationalise the Railways?


My first thoughts after Jeremy Corbyn’s inept spinning of the supposed state of our railways was that he was most certainly taking on the wrong enemy. Whatever you think of Richard Branson, his profile is strong amongst the public who to the bafflement of Labour’s leadership generally respect self made billionaires provided that they clearly do not grossly overstep the mark in the manner of the venal Philip Green.

Anyone who has dealt with some of the Virgin brands in business will know full well that they can be ruthless and demanding. I certainly have a story or two regarding the ethics of Virgin Megastore from my time in the music business. That hard headed behaviour extends to their corporate PR ( and why not) which is again something that Corbyn should have been very clearly aware of.

Either way this has raised the issue of “overcrowding” on the railways as well as a somewhat knee jerk call for nationalisation. All this is being exacerbated by the industrial disputes across the network.

Is this the answer? Somewhat surprisingly the Guardian of all papers, runs this astute piece  which would probably not be welcomed by “state owned railway” enthusiasts.

I am a very regular user of railways. Being self employed does mean that I can avoid the worst bottlenecks of course so my view is likely to be more benign than that of a commuter but there is a simple overriding factor at play here.

More people are using railways than any time since the 1920s. It is very clear that if the trains were so awful, the service unreliable and the fares too expensive, then this would not be the case. Its straightforward supply and demand and there are alternatives available for the customers.

The fact is that despite the moans many trains are by far the best and most enjoyable form of travel. Demand is outstripping supply and unfortunately its difficult to expand supply in the short or even medium term. South West Trains have extended many trains on my routes from eight to ten carriages and that has necessitated extending platforms across the network. They are also bringing in bigger trains next year and you have to really ask what more can they do? As an aside South West Trains are very decent. I have also found Virgin GWR and South Eastern to be attractive to use but Southern most certainly offer a poor service with an attitude. Additionally anyone time travelling back to the days of BR from my station would be shocked by how many fewer trains there were with certainly a lot less capacity. Thats before we get onto the reliability.

But the big question is will nationalisation make much difference? The clear answer is no. Political parties suggesting such remedies will have to offer more than “the state knows best”. As the linked piece clearly suggests there is little manoeuvre  to cut fares and virtually none for increased capacity.


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Unfair contracts hitting businesses

'It is a standard contract - sign at the bottom. The first clause forbids you to read any of the others!'

This is an area I have encountered on a number of occasions in the past year or so. It is an are where I frequently give advice.

The familiar misconception many business owners have is that they are protected under the same rights as consumers whereas the prevailing guideline is simply caveat emptor

The research reveals the extent to which small firms remain vulnerable when buying much needed goods and services. Around 40 per cent of respondent business owners said they felt unable to do anything about the unfair contract terms they had been submitted to because a supplier was too important to their business.

Isn’t that a somewhat depressing illustration of the overriding power that certain suppliers have over SMEs?  But i would also contend that that is a defeatist attitude too

FSB national chairman Mike Cherry called for better protection for small firms when entering supplier contracts. “Small business owners don’t have the time, expertise or purchasing power to scour the market to find and negotiate the best deals,” he added.

“They behave in a similar way to consumers, but don’t have the same guarantees of quality or legal redress in an unfair situation. Small firms on the bad end of a deal are losing out to the tune of £1.3bn a yea

The problem could be that “expertise” and time comes at a price. The assumed first port of call is the legal profession but the familiar response from that sector is often over cautious and not an ability to see the contract in the wider context

Then again maybe advice is worth a little upfront cost



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Death of “neo liberalism”?

Post_War_Planning_and_Reconstruction_in_Britain-_the_Construction_of_Temporary_Housing_D24231It should be noted that, by historical standards, the neoliberal era has not had a particularly good track record. The most dynamic period of postwar western growth was that between the end of the war and the early 70s, the era of welfare capitalism and Keynesianism, when the growth rate was double that of the neoliberal period from 1980 to the present.

A overlong piece on the supposed death of “neo liberal economics” dominated yesterday’s Observer and whilst there were some reasonable if fairly obvious points made, there was no hint of solutions or suggestions

The author finds it hard to disguise dislike of the USA and has a peculiarly fawning disposition to China, illustrated by his book “when China rules the world”. Fair enough perhaps but given that this was supposed to be a grand piece setting some sort of economic agenda then you would perhaps expect some serious understanding of the subject in hand

You would also expect some credibility. The author’s credibility was shot to pieces immediately I read the above paragraph which appeared early in the piece and set the overall tone

Perhaps it shouldn’t need explaining but post war growth within decimated economies driven to their lowest possible point by a continental war was of course going to be far higher than growth compounded on a more developed economy.

Iraq and Afghanistan have far higher growth rates than Germany and the Uk.

I need not say more and the only question I had in my mind was the impact of the poor allocation of economic resources, most especially in the area of professional journalism



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Companies House. Is this political?

Here is a full piece from Economia website

If it is true that this has been lobbied by Conservative MPs and driven by the current administration then that is disappointing in so far as they are demonstrating a lack of understanding of the lending to the SME sector. You would think they would know better.

On the other hand it could simply be a case of Tom Watson politicising this issue. He does appear to be insinuating that the Conservative lobby is simply wishing to see these new procedures in place so that their dubious business chums can escape scrutiny. I sense that is somewhat wide of the mark too

Companies House is considering reducing the amount of time that records of dissolved companies are retained, from 20 years to six, according to reports

The registrar of UK companies is reportedly under pressure from businesses and MPs to erase the information, which would mean around 2.5 million records would be lost.

Such a move could hinder efforts to fight against money laundering and white collar crimes, as public records are used by the authorities as part of investigations.

Tom Watson, Labour’s deputy leader, wrote to the prime minister Theresa May urging to ensure the proposal would not go ahead, arguing such plans would “only protect criminals who seek to hide their past corporate misdeeds from public view”.

Companies House has committed to holding a public consultation before any decision is made

Companies House spokesperson
In a letter published on Wednesday, Watson accused the Conservatives of “standing up for their own interest, rather than those of the British people”.

The MP said the proposal would be an attack on the public, the police and journalists and would make it harder for legitimate companies to conduct proper due diligence on potential business partners.

“It has been reported that MPs have lobbied Companies House to reduce the length of time that records have to be held. I have told the prime minister I would be interested to know which MPs have been demanding this changes, and what their motivation is for doing so.”

Watson argued the change would not cut costs or administrative burdens.

“If indeed these reports are true, Theresa May must personally intervene,” he added.

Tax Research UK director Richard Murphy said, “The use and abuse of limited liability is a matter of considerable public importance and being able to trace someone’s track record is important.

“This move is one in the wrong direction and which would be grabbed upon with delight by any tax haven if they ever get near public registers.”

Meanwhile, Angela Rayner, shadow secretary for education and work and pensions, said on Twitter the proposal is a “backward step in the fight against global corruption”.

A Companies House spokesperson said, “Companies House has always had an obligation to delete expired records after a certain period of time has elapsed.

It is not unusual for public bodies to review their data handling practices to ensure they comply with data protection law.

“Companies House has committed to holding a public consultation before any decision is made.”

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Byron Burgers. Right or wrong?


This blog generally keeps clear of political issues and takes a generally neutral stance. That is of course severely tested by the current Labour leadership and Donald Trump.

Occasionally a point can be made without necessarily scoring political points and the issues surrounding Byron Burgers assisting with the deportation of illegal migrants is just one of those

According to more than a few commentators on the left Byron should be boycotted and subject to protests. I sometimes wonder which world these people live in.

The left would appear to be as far away from power as at any time in their history and we know the reasons why but how on earth do they believe that they are going to appeal to working class or middle ground voters by taking the stance that illegal immigrants who present fraudulent documents are victims?


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