Any other business

Saturday

Ross Clark

Red tape and big money

There aren’t many people who can say that Gordon Brown has cut their taxes. In fact, as far as I’m aware there are just managers of private equity funds — and me. The Chancellor’s introduction of the flat-rate VAT scheme in 2002 was so uncharacteristic that it took me a whole year to work out that I could simplify my VAT returns and save several thousand pounds a year. Sadly that simple reform, which allows small businesses to reclaim VAT as a fixed percentage of turnover rather than on each item — and rewards cheapskates like me who run up very low expenses — was to be a one-off. Otherwise, for small businesses the Blair years have been about just three things: regulation, regulation, regulation.

Martin Vander Weyer

Fast bucks all round as Saga and the AA form the Victor Meldrew conglomerate

The £6 billion merger of Saga and the AA is a gift for cartoonists: a company whose ideal customer is Victor Meldrew with a broken fan-belt on the hard shoulder of the A22. To complete a brand conglomerate for grandads — and since all three are owned by private equity funds — why not bring in Boots the Chemist as well? But most of all, the deal is another gift for the GMB union, whose leaders Paul Kenny and Paul Maloney have led such a creative campaign to blacken the name of private equity that they ought to be preparing their acceptance speeches for next year’s Baftas. They have already ensured that the AA — which was acquired by Permira and CVC Capital in 2004 for £1.

Richard Northedge

Pollster with an eye for business

The company Gordon Brown will be watching most closely as Prime Minister is the polling company most closely watching him. YouGov named Harriet Harman as the deputy best able to help him win the next general election, for example; until that day comes, it will constantly measure Brown’s popular support. YouGov’s polls did not trouble Tony Blair when he moved into No. 10 because the company did not exist. It is a product of internet technology, founded just as the dotcom bubble burst in 2000. But it is still here, and for all the headlines generated by its political polls, they now provide less than 5 per cent of its profits: this Aim-quoted company makes its real money servicing conventional business.

Theodore Dalrymple

Global warning | 30 June 2007

At my time of life, and in my circumstances, I ought to be calm and unruffled. I should be like a saddhu in a Himalayan cave, whose pulse rate no merely external event in the world of appearance can raise. Instead, whenever I read the Guardian (which is often), a wave of irritation comes over me like a Jacksonian fit, the epileptic seizure that starts with a twitch in the toe and ends in a generalised convulsion. The other day, for example, I was reading an article about an Indian film just released called Water. It is about the doleful fate of poor widows in India, and apparently the film achieved the highest of all artistic goals, the breaking of a taboo.

Saturday

Martin Vander Weyer

‘That’s Shriti Vadera — Gordon’s representative on earth’

Margaret Thatcher’s speechwriters always struggled to get her to do the jokes. I once had a similar problem with Shriti Vadera, the former banker who will next week become, arguably, the most powerful woman with a paid job in Downing Street since Lady Thatcher’s departure. Miss Vadera is Gordon Brown’s most trusted policy adviser and Whitehall enforcer. Next week she is expected to move from the Treasury to take up a key role in the kitchen cabinet at No. 10, perhaps even as the new Prime Minister’s senior ‘gatekeeper’. When I was briefly her speech-writer, however, she was a director of Warburg Dillon Read (now UBS Investment Bank) in the City. It was 1998, and we were at a conference on globalisation.

Allister Heath

It’s wrong to punish private equity

It will come as little consolation to Guy Hands, the financier who complained this week that he must be the last person in Britain still prepared to defend the private equity industry’s generous tax breaks. But I have a confession to make: I, too, am opposed to clobbering private equity funds — and if that makes us fellow champions of a lost cause, then so be it. The current rather weird tax regime would admittedly never be chosen by someone redesigning it from scratch — but in the present climate, any change will succeed only in punishing one of Britain’s most successful industries while raising little or no revenue for the Exchequer. Trade unions’ calls for huge tax rises on the industry must be resisted.

Elliot Wilson

The scourge of Hong Kong

Every city needs a David Webb. Hong Kong, a heaving, sweating shrine to capitalism, cronyism and cartels, is lucky it has the real thing. Shareholder rights and corporate governance remain largely alien concepts in this former British colony, which is about to mark the tenth anniversary of its return to China. It sometimes feels that Webb, a former London investment banker who moved to Hong Kong for Barclays, is the only person who cares about the rights of small shareholders, or about checking the corrosive influence of the city’s all-powerful tycoons. Lean and acerbic, Webb resembles a thin David Shayler, the former MI5 officer. He doesn’t do small talk, and stares at you with disturbing concentration.

Robert Beaumont

Good news for everyone except Mr Chu: the post-Prescott era dawns at last

On Wednesday, when John Prescott finally steps down as Deputy Prime Minister, the city of Hull will breathe a collective sigh of relief. Just as Joseph Chamberlain defined Birmingham in the 1870s, so Prezza personified Hull for the past decade. Chamberlain built a great industrial city — but Prescott has reduced this proud, historic port, whose eastern parliamentary constituency he has held since 1970, to something approaching a national laughing stock. It seems unlikely, for example, that Hull would have been named the ‘crappest’ of Crap Towns: The 50 Worst Places to Live in the UK, by Sam Jordison and Dan Kieran, had Prescott not lived there.

Paul Johnson

The man who took a PhD in Happiness Science

Lady Diana Cooper used to relate that, at a dinner she gave in the British embassy in Paris, not long after the war, Madame de Gaulle was asked what she was looking forward to now her husband had left office. To the consternation of the table she replied, ‘A penis.’ Whereupon the General spoke: ‘No, my dear, you are mispronouncing the word. You mean “appiness”.’ Yes: but what did the lady really mean? What does anyone mean by happiness? It is the most subjective of all emotional states. As Kant said in his Ethics, ‘Happiness is not an ideal of reason but of imagination.’ Nevertheless, public-spirited people, wishing to ‘do good’, are always subjecting it to rational analysis, so as to devise government policies to maximise it.

Saturday

Paul Johnson

Rubbish, entropy and the Second Law of Thermodynamics

One of the secrets of the universe is buried in the word rubbish. The word itself is secretive: no one knows its precise provenance. The big OED says: ‘Of obscure origin app. related in some way to rubble.’ But if you look up rubble, it says: ‘Of obscure origin, app. related in some way to rubbish.’ Dirt is matter in the wrong place. Rubbish is matter in the wrong place but on a larger scale. Getting it into the right place is beginning to perplex governments as never before. The earliest general attempt in English history to deal with the problem can be found in the Parliament Roll for 1392–93: ‘Qu nulle ...gette ne mette ...ascuns fymes, ordures, mukes, rubbawes ou lastage in la dite eloe entre les lieux sus dites.

Edie G-Lush

How cyber-crime became a multi-billion-pound industry

Imagine you’re the finance director of a quoted financial services company. You receive an anonymous invitation to a ‘Party of a Lifetime’ in the form of a USB memory stick. Hopeful of some welcome distraction, you plug it into your office computer. But unbeknown to you, the stick has been sent by a criminal gang seeking a way into your company’s IT system. The stick searches your directories, sends private files to the gang, inserts a ‘keylogger program’ which records your keystrokes and passwords, and sets up a way for the gang to attack your network. Farfetched? No, it isn’t. Earlier this year 500 UK finance directors received memory sticks in this way and 47 per cent of them ran the application contained in it.

Richard Northedge

The urge to be Sir Alan’s apprentice

When Sir Alan Sugar set up Amstrad selling car aerials nearly 40 years ago there was no television programme to encourage budding entrepreneurs. Britain was locked in an era of corporatism in which the conventional aspiration was to work for a multinational such as Shell or to be a civil servant. In fact, the two were much the same, offering the anonymity, security and shared responsibility of the large organisation with its annual pay review and pensions scheme. It was by joining the Ministry of Education as a statistician when he left school at 17 that Sugar realised working for himself had to be better. It has taken a long time for the country to share that view. But after decades when business was regarded as vulgar, entrepreneurship has become respectable again.

Lucy Beresford

Golf and global brands signal rising prospects for the Himalayan kingdom

The hills are alive with the sound of golf balls. The hills in question are the highest in the world: the Himalayas. And golf is the new buzzword in Nepal. A global sport, golf attracts high-net-worth tourists, especially from South Korea and China, which have recently begun direct flights to Kathmandu’s Tribhuvan Airport. That’s good news for the Nepalese economy. Golf tourists, bags crammed with gleaming titanium Big Bertha drivers, spend more per head per day than the penny-pinching backpackers who previously made up Nepal’s tourist population. Caddies get decent cash tips and entrepreneurship flourishes among the children who perch on the perimeter wall, waiting to sell you back your golf ball after you’ve shanked it into the trees.

Theodore Dalrymple

Global warning | 16 June 2007

I was sitting in a train recently, wondering why everyone’s mobile telephone conversations, except my own, were so utterly banal, when a young black man sitting two rows behind me answered the irritating wail of his instrument of the devil. He began to speak, and I wished that I had learnt shorthand. ‘Hancock’s definitely put in a plea,’ he said. ‘Moran’s in the early stages. I’ve got to go back next week, but for the moment I’m on bail.’ As is often the case, his telephone rang non-stop. ‘There was a lot of negotiation going on while we worked out a plea bargain,’ he said.

Saturday

Paul Johnson

A very parfit gentil knight of music

One of the many things which makes me love Edward Elgar is that both the man and his music are so tremendously unfashionable. No wonder tax-funded quangos set up to ‘promote culture’, and run by New Labour bureaucrats, are refusing to mark his 150th birthday. He does not correspond with their criteria of approval at any point. He was white. He was English. He was middle class. He was a patriot, he loved his country and revered its monarchy: his second symphony was dedicated to Edward VII, who was kind to him and chose him as the first musician to receive the Order of Merit. He found the appalling losses we suffered in the first world war unbearably painful, and his agony is reflected in his music, notably the tragic cello concerto, to my mind his finest work.

Merryn Somerset-Webb

Women and money make a perfect match

The City summer party season has begun. I kicked it off with a fifth-anniversary party for Neptune Investment Management last Thursday. I like Neptune: they’ve got good funds and a good business, and offering drinks after hours at the Wallace Collection is clearly a fine way to win fans. But the party had one faintly off-putting aspect: the statue garden where we were gulping champagne was a sea of suits. There were one or two daintily dressed women dotted about but, with only one exception who I recognised, they were PR types or journalists. The fund managers themselves were all men. The same will be true at every money-related party this summer and I see it in every other kind of City event I attend or organise.

John Andrews

An investor’s life on Mars

A Martian called Zog visits Earth to see what it can offer in the way of the latest investment funds. He meets an independent financial adviser called Charlie who asks him what kind of investment he’s looking for. ‘I’ve been reading about funds of funds,’ says Zog. ‘They sound good. You get access to a range of managers, each of whom invests in a different style. So if some of them aren’t performing well at any time, the others might be. Overall, you increase your chances of making money. And by spreading your money across several funds, you reduce the risk of losing all your money if something goes wrong with one particular fund.’ ‘I don’t like funds of funds at all,’ Charlie snorts. ‘Too expensive.

Matthew Vincent

Sick of rotten service? See it as a Buy signal

‘The customer is always right,’ said the 19th-century American retail pioneer Marshall Field — and shoppers at his Chicago store became so enamoured of their omnipotence, and of his assistants’ assistance, that they spent enough to make him the wealthiest businessman in the city. His retail innovations — unconditional refunds and consistent pricing — soon inspired imitators. In Philadelphia, John Wanamaker replicated the model and elevated shoppers at his Grand Depot to the rank of royalty with his derivative decree that ‘The customer is king!’ A new era of customer service was ushered in that, over the ensuing 100 years, saw stock flying off the shelves, and stock prices flying high.

Stephen Vines

An avalanche waiting to happen

Waiting for the bursting of the Chinese share bubble is like waiting for an avalanche. You can hear the rumbling but you have no idea when and where it will strike. Among the most bemused of those waiting to find out are the Chinese authorities — torn between pride in the prowess of their markets and lack of experience in the way they operate. Last week the government made a tentative attempt to cool the markets by bumping up stamp duty on share deals and there was an immediate tumble in prices, followed by an upward blip and this week a more severe decline.

Martin Vander Weyer

Can Patak’s fiery flavour survive in ABF’s big corporate cooking pot?

I have long been a fan of Patak’s, the Lancashire-based Indian sauce-and-pickle empire that was acquired last week by Associated British Foods for an undisclosed price thought to be somewhere north of £100 million. The business that now sells 30 million jars of curry sauce a year and supplies three quarters of Britain’s Indian restaurants has not only encouraged British eaters to explore the wider possibilities of subcontinental cuisine, but has set a shining 50-year example of family entrepreneurship.