Fairness i have heard said today is a nothing statement. Also that equality is not achievable and should not be something we should focus on generating in society. According to Julian Glover the Left has it worng and the Right needs to learn from this.
It got me thinking about my youthful dealings with the ideas of Communism, a fair and equal society where all contribute and benefit equally. As history has shown us the Human appetite for greed means this is merely a dream, a utopian ideal. However it doesn't mean that creating equality in our society shouldn't be a goal we can't obtain.
Around 12 months ago I was introduced to the notion of the "Citizens Income" through a book written by Clive Lord. The book and conversations with Clive, reintroduced to me that a more equal society was possible. Not through agressive revolutionary politics but through intelligent, radical thought and the determination to make big changes to beneift all of society.
I whole heartedly agree with Glover that fairness is used as a nothing word by politicians, because it cannot be measured or controlled it is simply an idea word. I do, however, disagree that we should not strive for equality. The chains and shackles of our tax and benefit strucutre need re-writing and I hope that in time, as the next generations mature and begin to take hold of our social and environmental challenges that people will not look to tweak and dabble with policy and strucutre but radically change them to better serve our future and country.
The Green Party is the only party that I see offering that radical departure from the middle ground, the safety and security of "Vanilla Politics". With our first MP there is a real opportunity to build strength throughout the UK.
That is all very good, but the challenge remains: How do you deliver radical vibrant change in a country so bogged down in it's own apathy and comfort living in our "Vanilla Society".
Monday, 11 October 2010
Thursday, 2 September 2010
Sustainability vs Capitalism
Capitalism has won. A bold but very simple statement. The battle started in the 1980's in earnest. Mass privatisation, profit focused businesses created from the realm of public service. Now the Private sector has the power. But what we face now is how we deliver sustainability without the public purse to support it.
I was one of those who thought that Capitalism would collapse with the failure of Northern Rock and Leeman Brothers. The financial sector would realise the error of its ways, society would begin to look at the value of our quality of life and the mutuals and co-operatives would flourish. This didn't happen. What did occur was the shift in power to the private sector. They now hold all the cards, government is powerless as we need profitable companies to survive.
If we don't stimulate corporate profit we do not receive the volume of tax we receive from corporation tax (9% in 2008). If business doesn't grow we don't get employment, public sector cuts mean that the reliance on the public sector has gone. Low employment levels means a burden two fold on tax. An increase in unemployment payments, and a decrease in spending, income tax and NI. All in all tax paid by employers and employee's directly through corporation tax, income tax and NI equates to 57% of the taxable income. Add VAT into that and you have nearly 75% of the tax revenue of UK Plc linked directly to corporate. The burden taken on by the government during our boom years (that really resemble the emperors new clothes) leaves the UK and much of the developed world at the mercy of global corporates.
If the public purse is slimming and the corporate world still driving down wages and pushing up
profit then is it right to suggest that the key to our sustainable future is capitalism.
Mike Chitty recently told me of Danone and their attitude to producing bottled water in Cambodia. Rather than dealing through governments, they chose to look at the challenge in a different way. Produce clean bottled water at a price affordable to the general populous and still return a profit. This business model, I would guess, is unique, however, I feel this holds the key to a sustainable future.
During the 1800's the industrial revolution saw the urbanisation of the British population which caused untold policy headaches in terms of working conditions, sanitary conditions, housing, crime, food supply etc... The pioneers to changing our society were not politicians but business owners. Joseph Rowntree, The Cadbury Family and Titus Salt (A Leeds Lad!) all led the way in changing our lives. The politicians didn't have the budget or know where to begin and the UK is dotted with parks, museums, libraries and churches built by these ground breaking philanthropists.
If we are going to see a sustainable economy, we need radical changes. We will no doubt need some finance, we will need to solve social problems, educational headaches and the every present threat of globalisation. The capitalist need to engage with this in a new way. If we build new train lines, new renewable energy plants, develop new farming and business models, we need to think as Danone do. What do we need, what can the people afford and how do we make revenue. This may lead you all to think that we will get cheaper poorer quality goods and services, but why drive a Rolls Royce when a Ford will do the same job at a fraction of the cost.
Sustainability is not a pipe dream or something we cannot achieve, it is simply something we are trying to over complicate. Capitalism is not pure evil either and profits are invaluable. The question we need to ask when thinking of anything we want to be sustainable is not how but why. Why are we doing this, who will benefit, why do they need it, who benefits?
People are key to any economics and to make anything sustainable it needs to add some value.
I was one of those who thought that Capitalism would collapse with the failure of Northern Rock and Leeman Brothers. The financial sector would realise the error of its ways, society would begin to look at the value of our quality of life and the mutuals and co-operatives would flourish. This didn't happen. What did occur was the shift in power to the private sector. They now hold all the cards, government is powerless as we need profitable companies to survive.
If we don't stimulate corporate profit we do not receive the volume of tax we receive from corporation tax (9% in 2008). If business doesn't grow we don't get employment, public sector cuts mean that the reliance on the public sector has gone. Low employment levels means a burden two fold on tax. An increase in unemployment payments, and a decrease in spending, income tax and NI. All in all tax paid by employers and employee's directly through corporation tax, income tax and NI equates to 57% of the taxable income. Add VAT into that and you have nearly 75% of the tax revenue of UK Plc linked directly to corporate. The burden taken on by the government during our boom years (that really resemble the emperors new clothes) leaves the UK and much of the developed world at the mercy of global corporates.
If the public purse is slimming and the corporate world still driving down wages and pushing up
profit then is it right to suggest that the key to our sustainable future is capitalism.
Mike Chitty recently told me of Danone and their attitude to producing bottled water in Cambodia. Rather than dealing through governments, they chose to look at the challenge in a different way. Produce clean bottled water at a price affordable to the general populous and still return a profit. This business model, I would guess, is unique, however, I feel this holds the key to a sustainable future.
During the 1800's the industrial revolution saw the urbanisation of the British population which caused untold policy headaches in terms of working conditions, sanitary conditions, housing, crime, food supply etc... The pioneers to changing our society were not politicians but business owners. Joseph Rowntree, The Cadbury Family and Titus Salt (A Leeds Lad!) all led the way in changing our lives. The politicians didn't have the budget or know where to begin and the UK is dotted with parks, museums, libraries and churches built by these ground breaking philanthropists.
If we are going to see a sustainable economy, we need radical changes. We will no doubt need some finance, we will need to solve social problems, educational headaches and the every present threat of globalisation. The capitalist need to engage with this in a new way. If we build new train lines, new renewable energy plants, develop new farming and business models, we need to think as Danone do. What do we need, what can the people afford and how do we make revenue. This may lead you all to think that we will get cheaper poorer quality goods and services, but why drive a Rolls Royce when a Ford will do the same job at a fraction of the cost.
Sustainability is not a pipe dream or something we cannot achieve, it is simply something we are trying to over complicate. Capitalism is not pure evil either and profits are invaluable. The question we need to ask when thinking of anything we want to be sustainable is not how but why. Why are we doing this, who will benefit, why do they need it, who benefits?
People are key to any economics and to make anything sustainable it needs to add some value.
The next stage from here is what is value and why is it valuable.
Tuesday, 24 August 2010
LEPs will they make any real change
It seems to me that if you give people a vacuum within which to operate they panic. No rules or any framework should be a policy makers dream. With this we have an opportunity, a blank canvas to re-engage the public and the business community. Get our public sector structure rebuilt and revitalised so that people believe in what we do.
However, it seems my vigour and enthusiasm for this is not present in the ranks of the public sector. They will try and force a framework and cobble together some ideas to fit what is needed. This is being done without asking what is needed and what can we do to achieve this? Is it so difficult to say wait, lets plan this out? Instead of clutching at straws why don't we grab this opportunity by its throat and really make a difference.
However, it seems my vigour and enthusiasm for this is not present in the ranks of the public sector. They will try and force a framework and cobble together some ideas to fit what is needed. This is being done without asking what is needed and what can we do to achieve this? Is it so difficult to say wait, lets plan this out? Instead of clutching at straws why don't we grab this opportunity by its throat and really make a difference.
Friday, 20 August 2010
Yorkshire Enterprise Partnership
YEP is the pan Yorkshire offering for the proposed LEP (Local Enterprise Partnership) structure with the main strap line of being "the voice of business in Yorkshire".
In this body there are many respected business leaders and major players in the region. Banks, Lawyers, Accountants, Manufacturers and even the Chamber of Commerce is represented. They feel that there are 4 key areas that should be promoted on a regional (i.e. Yorkshire wide) scale. These are Innovation (in their words exploiting new ideas), Intelligence, Finance for Business and Promotion. I have just spent my morning pawing over their manifesto and here is what I think.
Let me start from the top. Innovation. How many times have I heard this word and still some of the brightest people I meet haven't got a clue what it really means and neither do I. What I do know, however, is that in a positive document aimed at developing the region, Exploit, is a not a word to use. The document goes on to explore our University offering in Yorkshire and how we need to pool resource and enhance our offering. Interesting idea if each of our regions universities weren't already competing against each other for research funding, undergrad and post grad applications and funding for spin out companies. The idea of them working together is a long way from reality and if you look outside of a city region to Yorkshire as a whole that issue becomes all the more problematic.
The other challenge here is what innovation they are looking for. Is this innovation of a new product that will make a mutli-million pound business or is it innovation in how we live our lives and how we do business. This raises the challenge of innovation, what is it?
Secondly they move on to the points of intelligence and promotion. Regional data is invaluable in understanding the dynamics of a region. Areas of growth, poverty, unemployment etc... But is a regional picture of this nature too diluted. Does this average out our strengths or bolster some of our more local weaknesses. There are a range of businesses in Yorkshire, PLC's, sole traders, importers, exporters, distributors. Each of these businesses face their own challenge. A business in Whitby in one sector could be bracketed with a business in Barnsley. Very different socio-economic spreads, and differing local business communities. Whitby is surely more aligned to Middlesbrough and Sunderland than it is to any other part of Yorkshire. To be effective and provide solid facts for policy direction these figures need to be brought down a level. The whole reason for city regions is the economic unit of the region. Yorkshire is not a coherent economic unit, it is simply too varied and broad to be truly effective for the benefit of the business community.
This leads nicely on to promotion. Whilst Yorkshire is a strong brand for tourism with all the qualities the area has, it is not suitable for business connections. Whilst Yorkshire Forward have done some great strategic planning around inward investment, local authorities still compete, and under any pan Yorkshire body this would still take place. Sheffield LEP, Hull LEP and Leeds LEP would still argue they are the best site for any business. This in itself is destructive in terms of any business getting a clear idea of location. They argue that Scotland and Wales promote themselves as a whole but with all due respect there are two major cities in Scotland and only one in Wales. Yorkshire has at least 5 and could be argued there are more if you include Huddersfield and Wakefield. To tell a Chinese investor that Yorkshire is the best location for their business and then try to sort out the bun fight between city regions or even individual cities is just ridiculous. A nice idea but if you look at the German model who are one of the strongest inward investment magnets in the world, they work on a city region level.
Finally they talk about my biggest issue, Finance for Business. How can you tell a Bank to lend more money. The answer is simple. You can't. Banks need to lend money to make money. I saw an article today from an association of business owners, complaining that banks were charging more for unsecured lending than secured lending. Where is the shock their. Also they complained that banks were undervaluing property. As anyone will know banks work on market value and sorry to point out the obvious but we are in recession and property is worth less now than it was 3 years. Sometimes I think I'm the only one who sees this.
The plan talks however about attracting Private Equity investment into Yorkshire, developing Finance Yorkshire as a private equity tool and lifting restrictions on growth for businesses. One section talks of the biggest reason for SME and start up businesses failing to grow is the lack of finance. In reality its not the lack of finance, it is the management of the business. Not once in this document and through most of the comments throughout the recession do people in business look at lack of skills in management and financial acumen. If the business is viable and ready for investment then they can borrow and can raise capital for growth. If they aren't viable they won't. Until businesses look at themselves and stop blaming other people, namely the banks, then we won't move on from the doom and gloom that surrounds us. Yes capital is important in the region, investment in transport, schools, hospitals and growth business is required, but we need to help our region's step up to the plate. Very few SME's will have a grasp or care about the LEP's, for them the issues are cash flow and bottom line. Keeping their business moving forward, looking to new markets, restructuring in the changing climate. All this requires skill. Not in the manual sense but in the business leadership sense.
Again, can this be delivered Yorkshire wide? I would argue strongly that this is a no. City region's have an economic make up that will be unique with differing challenges and these need to be addressed locally. Will Finance Yorkshire understand market challenges in Scarborough and Whitby better than Leeds city centre or Barnsley. Does a business in Hull share the same needs and challenges as a business in Skipton? The answer to both of these questions is no. Whilst there will be some similarities the main differences in the businesses will be local. Banks do not have major regional offices they have a network across the regions for exactly this reason.
On the point of equity and fund raising from venture capitals. we have a string record in the region already. There is some need to work on investor readiness and support for local business to keep that flow going but if you try and sell the whole of Yorkshire to a fund manager do you not dilute each city regions offering. There are great tools already in place and these need to be developed city region by city region to maximise their impact and generate competition in the region. Mediocrity cannot be an option for Yorkshire.
All in all there are many areas where a set of eyes joining the dots between city regions or even local authorities is critical, of that I have no doubt, but suggesting that one company/organisation can be an effective voice for all businesses across the whole of Yorkshire is simply ridiculous. We are trying to develop the areas where we live and work as more sustainable, safer, fairer and vibrant centres. So lets focus on those areas. OK economic units or city regions aren't the best terms and we get very protective if its says Leeds, Sheffield, York or Bradford in the title, but at the end of the day these are centres where we live and work. We are proud to live in Yorkshire and have Yorkshire businesses but realistically we are challenged in these businesses on all levels and the one's we can overcome ourselves should the one's in our own locality.
P.S. I'll get to the use of sustainability in this and other documents another time.
In this body there are many respected business leaders and major players in the region. Banks, Lawyers, Accountants, Manufacturers and even the Chamber of Commerce is represented. They feel that there are 4 key areas that should be promoted on a regional (i.e. Yorkshire wide) scale. These are Innovation (in their words exploiting new ideas), Intelligence, Finance for Business and Promotion. I have just spent my morning pawing over their manifesto and here is what I think.
Let me start from the top. Innovation. How many times have I heard this word and still some of the brightest people I meet haven't got a clue what it really means and neither do I. What I do know, however, is that in a positive document aimed at developing the region, Exploit, is a not a word to use. The document goes on to explore our University offering in Yorkshire and how we need to pool resource and enhance our offering. Interesting idea if each of our regions universities weren't already competing against each other for research funding, undergrad and post grad applications and funding for spin out companies. The idea of them working together is a long way from reality and if you look outside of a city region to Yorkshire as a whole that issue becomes all the more problematic.
The other challenge here is what innovation they are looking for. Is this innovation of a new product that will make a mutli-million pound business or is it innovation in how we live our lives and how we do business. This raises the challenge of innovation, what is it?
Secondly they move on to the points of intelligence and promotion. Regional data is invaluable in understanding the dynamics of a region. Areas of growth, poverty, unemployment etc... But is a regional picture of this nature too diluted. Does this average out our strengths or bolster some of our more local weaknesses. There are a range of businesses in Yorkshire, PLC's, sole traders, importers, exporters, distributors. Each of these businesses face their own challenge. A business in Whitby in one sector could be bracketed with a business in Barnsley. Very different socio-economic spreads, and differing local business communities. Whitby is surely more aligned to Middlesbrough and Sunderland than it is to any other part of Yorkshire. To be effective and provide solid facts for policy direction these figures need to be brought down a level. The whole reason for city regions is the economic unit of the region. Yorkshire is not a coherent economic unit, it is simply too varied and broad to be truly effective for the benefit of the business community.
This leads nicely on to promotion. Whilst Yorkshire is a strong brand for tourism with all the qualities the area has, it is not suitable for business connections. Whilst Yorkshire Forward have done some great strategic planning around inward investment, local authorities still compete, and under any pan Yorkshire body this would still take place. Sheffield LEP, Hull LEP and Leeds LEP would still argue they are the best site for any business. This in itself is destructive in terms of any business getting a clear idea of location. They argue that Scotland and Wales promote themselves as a whole but with all due respect there are two major cities in Scotland and only one in Wales. Yorkshire has at least 5 and could be argued there are more if you include Huddersfield and Wakefield. To tell a Chinese investor that Yorkshire is the best location for their business and then try to sort out the bun fight between city regions or even individual cities is just ridiculous. A nice idea but if you look at the German model who are one of the strongest inward investment magnets in the world, they work on a city region level.
Finally they talk about my biggest issue, Finance for Business. How can you tell a Bank to lend more money. The answer is simple. You can't. Banks need to lend money to make money. I saw an article today from an association of business owners, complaining that banks were charging more for unsecured lending than secured lending. Where is the shock their. Also they complained that banks were undervaluing property. As anyone will know banks work on market value and sorry to point out the obvious but we are in recession and property is worth less now than it was 3 years. Sometimes I think I'm the only one who sees this.
The plan talks however about attracting Private Equity investment into Yorkshire, developing Finance Yorkshire as a private equity tool and lifting restrictions on growth for businesses. One section talks of the biggest reason for SME and start up businesses failing to grow is the lack of finance. In reality its not the lack of finance, it is the management of the business. Not once in this document and through most of the comments throughout the recession do people in business look at lack of skills in management and financial acumen. If the business is viable and ready for investment then they can borrow and can raise capital for growth. If they aren't viable they won't. Until businesses look at themselves and stop blaming other people, namely the banks, then we won't move on from the doom and gloom that surrounds us. Yes capital is important in the region, investment in transport, schools, hospitals and growth business is required, but we need to help our region's step up to the plate. Very few SME's will have a grasp or care about the LEP's, for them the issues are cash flow and bottom line. Keeping their business moving forward, looking to new markets, restructuring in the changing climate. All this requires skill. Not in the manual sense but in the business leadership sense.
Again, can this be delivered Yorkshire wide? I would argue strongly that this is a no. City region's have an economic make up that will be unique with differing challenges and these need to be addressed locally. Will Finance Yorkshire understand market challenges in Scarborough and Whitby better than Leeds city centre or Barnsley. Does a business in Hull share the same needs and challenges as a business in Skipton? The answer to both of these questions is no. Whilst there will be some similarities the main differences in the businesses will be local. Banks do not have major regional offices they have a network across the regions for exactly this reason.
On the point of equity and fund raising from venture capitals. we have a string record in the region already. There is some need to work on investor readiness and support for local business to keep that flow going but if you try and sell the whole of Yorkshire to a fund manager do you not dilute each city regions offering. There are great tools already in place and these need to be developed city region by city region to maximise their impact and generate competition in the region. Mediocrity cannot be an option for Yorkshire.
All in all there are many areas where a set of eyes joining the dots between city regions or even local authorities is critical, of that I have no doubt, but suggesting that one company/organisation can be an effective voice for all businesses across the whole of Yorkshire is simply ridiculous. We are trying to develop the areas where we live and work as more sustainable, safer, fairer and vibrant centres. So lets focus on those areas. OK economic units or city regions aren't the best terms and we get very protective if its says Leeds, Sheffield, York or Bradford in the title, but at the end of the day these are centres where we live and work. We are proud to live in Yorkshire and have Yorkshire businesses but realistically we are challenged in these businesses on all levels and the one's we can overcome ourselves should the one's in our own locality.
P.S. I'll get to the use of sustainability in this and other documents another time.
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