Leeds

Osborne budget bashes business

George Osborne

The overwhelming analysis of George Osborne’s latest budget has surrounded the planned changes to welfare spend, with an inevitable focus on the scrapping of working tax credits, the introduction of a ‘living wage’ and an ambition to make everyone who is under the age of 25 continue in education, get an apprenticeship or find a job!

By and large, the political classes have split into the traditional left-right fashion to which we have become accustomed, with Labour screaming ‘foul’ and Tories claiming that they are only doing what has been asked for by an increasingly weary debt ridden electorate.

Politically all this has played out very well for the chancellor, as he has been able to concentrate on the savings to the government and UK Plc, accrued on the back of those he claims are overly reliant on ‘hand outs’ – rather than addressing the very real challenges that the business community is about to face in trying to pay for those savings.

I was a long-time advocate of the minimum wage and my instinct is to be equally supportive of the introduction of a living wage. Indeed it is something that we practice at Downtown and we are pleased to be able to do so.

However, I am equally aware of the pressure many small businesses face when thinking about rewarding good staff in order to retain them through pay increases; the challenges they still face in terms of cash flow and dealing with their banks; the masses of red tape and bureaucracy they have to plough through; and negotiating with an increasingly aggressive HMRC.

To have to facto in additional salary costs at a time when many are still replenishing their own bank balances having come through a tough and lengthy recession hardly feels ‘business-friendly’.

There is then, of course, the ticking time bomb of the introduction of the new auto enrolment pension provision – a further cost to business, and one that many will not have adequately planned for or, sadly, be able to afford.

The net result of these demands on business may not be wholesale bankruptcies, closures and redundancies. However, I believe it will prove to be a barrier to growth. Those who have a vision of growing their business by employing more staff will be thinking twice and possibly three times before agreeing to an expenditure bill that is going to be so much higher in eighteen months’ time.

Of course, people will point to the reduction in corporation tax and indeed personal tax allowances too. Unfortunately, many of the smaller businesses and business owners that operate in the UK will benefit little from these changes.

George may have been unkind to the working poor. He has done few favours for the working entrepreneur either.

The budget may be positive for the chancellor in the short term. I wonder whether the impact of that budget in the longer term and the ultimate judgement of it will be quite as kind.

Let’s stick together

Power to the North

“If you’re in this city, the competition can be Everton versus Liverpool. If you’re in my city its City against United. In business terms we often see the competition as Manchester versus Liverpool. But then if the cockneys start make disparaging remarks about the North, we all bond together and have a go back at London. Then if the French slag off England, we unite with London to fire back at France.”

The delivery of this excellent observation came from Mr Deansgate, Nik Maguire, addressing the digital forum which was part of the series of excellent Liverpool Business Week events hosted by Downtown this week.

It was a point that was well made at a time when, in trying to compete in a global market and establish a Northern Powerhouse, the necessity for us to identify common goals rather than focus on traditional rivalries is increasingly obvious.

The good news is that, a few notable parochial internal spats in Lancashire and Merseyside notwithstanding, our regional business and political leaders have taken note.

The degree of co-operation taking place between Leeds, Manchester, Lancashire, Liverpool and the other core cities of the north on transport infrastructure is significant.

Equally, arguably the greatest of city rivalries between Liverpool and Manchester, has been put aside on many occasions over the past eighteen months, with the cities sharing platforms, marketing collateral and policy development in a whole range of areas. The London based MIPIM UK property festival in October will see Manchester and Liverpool share exhibition space for the second consecutive year.

And, as Liverpool gears up to host the UK International Festival for Business in twelve months’ time, the man tasked with making a success of this unique three week jamboree, Max Steinberg, is reaching out to the rest of the country, in particular other parts of northern England, to help showcase what is the best of British.

The festival is a great opportunity for businesses from across the country – but also a chance to show that we can genuinely establish a Northern Powerhouse where our great cities and counties work together when needed for the greater good.

The ‘Powerhouse’ isn’t just about the North

Northern powerhouse

It is very easy for us folk ‘up North’ to get carried away with the notion that re-balancing the UK economy means closing the North-South divide, with Manchester in the vanguard of securing the type of devolution deal that will hopefully be rolled out across the region, parochial politicians permitting.

However, the idea of ‘powerhouses’ and big, influential Combined Authorities, is not simply exercising the minds of Manchester, Liverpool, Leeds, Newcastle et al. Everywhere located this side of the Watford gap are beating a track to Whitehall and shouting ‘Me too.’

No more so is this the case than the city that in modern times had managed to claim, and lose, the title of undisputed ‘second city’ – Birmingham.

Aesthetically, it is not the easiest on the eye, Brum. Indeed, you could go as far as to say that she is as ugly as she has ever been, as the city currently boasts a backdrop that could be happily used by Hollywood film makers for movies set in a war torn location of the Middle East.

However, there is good, and positive, reason for that. Birmingham is experiencing a long overdue facelift. A wholesale regeneration of the place is happening that will create a £2 billion plus ‘paradise’ project that cannot help but breathe new life into the economy, the night time economy in particular.

Additionally, the investment that has been confirmed by HSBC, the crucial role Birmingham will have in delivering HS2 and the fact that its city region takes in a population of 4 million people signals that this is a sleeping giant that has well and truly been awoken.

Of course, like all modern UK cities, it faces challenges, none more so than the crushing austerity programme imposed on the city council by central government, that has seen exciting initiatives such as an iconic new library and community facility turned into an albatross around civic leader’s necks.

At some point I hope the chancellor recognises that great cities can only continue to thrive and grow if they are allowed to maintain a level of service provision and activity that is relevant to the 21st rather than the 19th Century. But more of that post- Osborne budget statement.

Nevertheless, despite these challenges, Birmingham has so much else going for it that it is difficult to imagine that it is not approaching a period of huge renaissance.

I have spent the past eighteen months going down and up the M6 meeting a good number of Brummie businesses, entrepreneurs and decision makers to know that these guys and gals mean business.

Talk about energy – it is incredible. Commitment – in abundance. Determination – as Ed might say – hell yeah!

Coupled with this vibrant business community, a pragmatic public sector leadership that is keen to engage with the new up and coming business leaders of the future, whilst maintaining a strong relationship with its traditional commercial sector, makes Birmingham more than a little bit interesting.

All of this leads me to one conclusion. A city with so much attitude needs a business club to match. Downtown Birmingham in Business? We launch there in September, and I can’t wait.

Cameron Setting himself up for a Fall?

Cameron Prime Minister Questions

Prime Ministers Questions has been a bit of a pantomime for some considerable time now. John Major was probably the last PM who actually tried to answer questions put to him by his parliamentary colleagues at the, back then, twice weekly event – and look what happened to him!

Tony Blair, who hated ‘PMQs’, reduced the session to once a week, and over time became a master at using the occasion to simply point score off his political opponents, whilst managing friendly questions from his own backbenchers.

Gordon Brown continued little from Blair’s New Labour style of government; but he too seldom addressed questions directly from the dispatch box and he was as adept as his predecessor at batting away any challenging scrutinising from MPs, albeit with a far less charm.

David Cameron has carried on with this unfortunate tradition and practice since becoming Prime Minister in 2010, and following his victory on May 7th has adopted a style that was described by Labour’s acting Leader Harriet Harman this week as “gloating”, telling him to “show a bit more class.”

I have to say that I have been surprised by Cameron’s tone at PMQs, as he takes every opportunity to patronise and tease Labour members in a way that may be fitting for a dormitory bully at a public school, but is hardly befitting of the country’s leader.

I hope that this new found sneering approach is a temporary aberration, born out of a victory that one senses he still can’t quite believe. Sooner rather than later his own backbenchers will be harrying him over the EU, immigration, the human rights act and who knows what else. Members from all sides of the house will only enjoy his discomfort just that little bit more if he continues to act with the pomposity that he is demonstrating right now.

He would do well to remember the phrase ‘be kind to people on your way up the ladder…

FIFA is bad – Is the FA much better?

The FA

It has been an incredible week for the most popular sport on the planet, as its international governing body has been subject to fraud allegations, FBI investigations and, ultimately, the resignation of the head of the organisation Sepp Blatter.

FIFA has been on the edge of a major scandal for over a decade now, and the only real surprise about the spate of arrests and revelations that have emerged in recent days is that it has taken so long.

The Sunday Times ‘Insight’ team have been on the case for several years now, and the journalists involved deserve a great deal of credit for continuing to dig, harass and question the football authorities under extremely challenging circumstances.

For those like me who worry about the social media explosion destroying investigative journalism, this saga, and its conclusion, is a breath of fresh air.

UEFA and our own FA were front and centre of demands that Blatter should go; and indeed representations from Michel Platini, Greg Dyke and other senior European football officials, have been made over a period of months now.

Of course they are right to have raised their concerns, and take the stance that they did – but isn’t it about time they started to take a long, hard look at what damage they are doing to the beautiful game too?

UEFA have spent the past decade or more promoting the Champions League to the detriment of all of its associate member leagues and destroying the once credible EUFA Cup with the introduction of the competition nobody wants to qualify for, the Europa League.

And what of our own Football Association? The Premier League has been a huge success, become the UKs biggest export, and taken media coverage of footy to another level.

However, the unintended consequence of this have been a significant erosion of the club-supporter relationship; television dictating the fixture calendar and kick off times; an undermining of every club and league outside of the ‘elite’; the destruction of what was once accepted as the most successful cup competition in the world; and most worryingly financial mismanagement and club ownership going unchecked to the extent that long standing, well established teams have suffered bankruptcy and near extinction.

Ask Leeds United, or indeed Blackburn Rovers fans, if they think that the ‘fit and proper person’ test is worth the paper it is written on.

The explosion in agents, hangers-on and footballer’s salaries have further undermined a game that now only needs supporters in the same way that Coronation Street needs extras. They help create an environment and atmosphere that makes the TV experience all the more appealing. But it is the TV cash that is King!

I’m not suggesting that the FA is corrupt; or that its officials are taking backhanders to host the newly created pre-season money making ‘tournaments’ at the Emirates rather than Stamford Bridge. But they have ripped up and thrown away the set of principles that once led boys like me to develop such an emotional attachment to a club that as an adult is as important as political allegiance and religion.

Will the new set of replica wearing, friendship scarf buying, Sky subscribers be as loyal to their chosen ‘brand’ as the traditional support base that have kept clubs going for generations? Or will they find another pastime, or just follow the next club that gets a multi-billion pound foreign owner?

What happens to football when Sky gets fed up with football? That is what should be exercising the minds of the English FA, as much as the crisis that is FIFA.