Archive for the ‘Business’ Category
It’s true to say there are causes for optimism with regards to the British economy at the moment – unemployment is falling, consumer confidence is rising and the private sector is expanding. But this ‘recovery’ is fragile, and there is still a very long way to go before the nation’s balance sheet is back on a stable footing.
Let’s take a moment to remind ourselves how we got into this mess, and what the true causes were. Gordon Brown’s track record as Chancellor was largely to blame for the scale and severity of the recession. During his decade as Chancellor, he sold off much of Britain’s gold reserves when it was at the bottom of its economic cycle, he raided the private pension funds of working people who had saved and done the right thing by preparing for their old age, he introduced 157 new taxes, he borrowed more money than all previous British governments in history put together, and he paid for public sector ‘investment’ by private finance initiatives, a form of borrowing that was to land future governments with hefty bills that would need to be paid years after he was off the political scene.
Brown was fortunate that the chickens didn’t come home to roost a lot sooner than they did. He was lucky in that the global economy was largely stable for much of his tenure as Chancellor, and currencies weren’t as affected as they might have been by instability on Japan or the terrorist attacks of 9/11.
When the rain eventually came, there was nothing in reserves to help the country battle through a few hard years. Every responsible individual, and every responsible family puts some money to one side in case they lose their job or are unable to work due to circumstance. Mr Brown did not do the same with the nation’s money.
The banking crisis has its origins in legislation President Clinton brought in during the 1990s that effectively removed the boundaries between the day-to-day banking most of us use and the high-risk casino banking very few of us will ever encounter. The USA sneezed, and the world caught a cold, though it is worth remembering that during its 13 years in power, New Labour did absolutely nothing to stop ordinary people being exposed to the consequences of casino banking, nor did it do anything to prevent high street banks from merging, which led to them becoming too big and resulted in a lack of competition.
Then we have the elephant in the room, the big issue that doesn’t get talked about nearly enough – personal debt.
UK personal debt has doubled since the turn of the millennium. Our cultural attitudes need looking at if we are to address this problem. In Germany, the word for ‘debt’ is the same as the word for ‘guilt’. That, combined with looming memories from the financial ruin of the Weimar Republic in the early 1930s means that the German people have a completely different, and much healthier attitude to debt.
Most Germans pay for their weekly shopping in cash. Credit cards are rare. Most people, even middle class professionals, rent, rather than own their homes. We, as a country, need to learn lessons from this. In many cases, the debt burden of having a mortgage is too great, and people would be better off renting, which allows people to move house easily and at short notice as their jobs and personal circumstances change. You are only ‘throwing money away’ by renting if property prices rise indefinitely, if you are willing to gamble on what state your life will be in 25 years from the start date, and if you are willing to spend large sums on maintaining the property.
Then there is the issue of consumer debt. This will require a massive cultural shift. I hate consumer debt with a passion. I cannot imagine, at any time, or under any circumstance, taking out a loan or credit agreement to pay for a car, a new sofa, or a holiday. If I cannot afford something, I go without. I choose not to run a car because I wouldn’t use it anywhere near enough to justify the cost. It’s 10 years to the week exactly since I returned from my most recent foreign holiday (I have been abroad much more recently for work purposes). ‘Keeping up with the Jones’s’ is not one of my hobbies. Many people subtly try to outdo their friends by buying flash cars, building conservatories and holding fancy wedding days. They don’t fool me. I’m not impressed with any of that, because whenever I see it, my first question is: How did they pay for it?
This combination of factors means that George Osborne’s task wasn’t and isn’t one to be admired. Since he became Chancellor in 2010, his track record has been mixed. He deserves credit for raising the Personal Allowance, which has removed millions of low earners and part-time workers from income tax completely. He can take credit for the fall in unemployment and for creating the conditions that have allowed the private sector to grow.
The ‘tax cut for millionaires’ has been nothing of the sort – they’re actually paying more tax than before, and besides, Mr Osborne understands full well that raising taxes for the richest only leads to them taking their money, and their businesses, to other countries with a more competitive rate. That was a mistake Labour made during the 1970s and it would be even more disastrous in today’s globalised economy.
In today’s papers, we read that Mr Osborne is planning to merge income tax and National Insurance if the Conservatives win next year’s general election. It’s about time too – it’s a total myth that there is a separate pot of money set aside to help individuals in times of need, and it would be far more honest, and ultimately far more efficient, to make the two a single tax.
Yet Mr Osborne’s track record is far from perfect. Perhaps his biggest piece of good fortune is that most people don’t know the difference between the terms ‘debt’ and ‘deficit’. Understanding this point is crucial. ‘Debt’ refers to money owed historically, whereas ‘deficit’ refers to the amount the government borrows every year. Mr Osborne has indeed cut the ‘deficit’, but the ‘debt’ itself is still piling up year on year.
Government borrowing, namely the ‘deficit’ was £107.7 billion in 2013-14, down from £115.1 billion the previous year. That means that Mr Osborne has made up for an income tax shortfall to the tune of £107.7 billion this year by borrowing. There are two ways this figure can be reduced: 1. By increasing the amount of money the government receives from taxation. 2. By spending less.
Option one can be achieved by getting more people into work and paying tax, which, to his credit, he has helped to make happen. It’s important not to fall for the myth that the government could receive more tax revenue by raising taxes – this would lead to people having less money to spend on products and services, and therefore fewer jobs would be created, whilst business is lost to overseas markets.
Option two means accepting the cuts, making the public sector work more efficiently, and accepting that the government should do less, which means individuals and families would have to take far more personal responsibility for their lives.
Only once the deficit drops to zero, and the government receives more tax revenue than it spends (a surplus), can it start paying down the debt. And boy, does that mountain of debt need to be dealt with. It currently stands at around £1.3 TRILLION, but when we add in all government liabilities such as state and public sector pensions, the true figure is closer to £4.8 TRILLION. That works out at roughly £78,000 for every man, woman and child in the country. The interest alone currently amounts to £1 billion per week.
In conclusion, we are going to have to accept the ongoing cuts. There are numerous examples, especially among Labour-run councils in places like Sheffield, of pet projects continuing and the number of well-paid consultants increasing while frontline facilities like libraries and leisure centres are closing. The electorate needs to be vigilant in ensuring that their taxes are spent wisely, and that their council is run for the benefit of local people, rather than the people who work for it.
We should also fully acknowledge Labour’s role in creating the economic crisis. Gordon Brown’s closest adviser while he was playing hard and fast with the nation’s finances was Ed Balls, the current Shadow Chancellor.
There appears to be an inbuilt belief among the Labour hierarchy that all problems can be solved by throwing money at them, or by expanding the role of the state. Indeed, the public sector expanded by more than one million workers between 1997 and 2010. Good, efficient management and increasing productivity doesn’t seem to register with them. Of course, the fact that public sector union votes were the key to getting Ed Miliband elected as Labour leader, and that union donations are keeping the party afloat probably clouds their judgement somewhat. As far as Labour is concerned, all public sector cuts are bad and the current government is only making them to be nasty. They haven’t come close to grasping that these are necessary measures to clear up their mess.
The problems are many, and it’ll be a good while yet before the nation’s finances are back on an even footing. We are being kept afloat at present by the availability of cheap credit, which won’t last forever, so carrying on as we were before is not an option.
No matter how bad things are, and however much we may dislike the cuts, letting Labour back into office would lead to things being far, far worse.
Gordon Brown ruined this country’s economy. Don’t let his closest adviser do the same again.
The annual Bilderberg conference took place this weekend in Copenhagen, Denmark. A full list of participants is below.
Among those in attendance was the head of MI6, the former director of the NSA, the boss of Google, as well as George Osborne, Ed Balls, Justine Greening and Peter Mandelson. Henry Kissinger was also there at the age of 91. I don’t think he’s missed a single Bilderberg meeting since it was founded.
The BBC and the rest of the mainstream media didn’t mention it at all. I don’t think all these big names gathered to discuss the weather or to look at one another’s holiday snaps.
Here’s the full list:
FRA Castries, Henri de Chairman and CEO, AXA Group
DEU Achleitner, Paul M. Chairman of the Supervisory Board, Deutsche Bank AG
DEU Ackermann, Josef Former CEO, Deutsche Bank AG
GBR Agius, Marcus Non-Executive Chairman, PA Consulting Group
FIN Alahuhta, Matti Member of the Board, KONE; Chairman, Aalto University Foundation
GBR Alexander, Helen Chairman, UBM plc
USA Alexander, Keith B. Former Commander, U.S. Cyber Command; Former Director, National Security Agency
USA Altman, Roger C. Executive Chairman, Evercore
FIN Apunen, Matti Director, Finnish Business and Policy Forum EVA
DEU Asmussen, Jörg State Secretary of Labour and Social Affairs
HUN Bajnai, Gordon Former Prime Minister; Party Leader, Together 2014
GBR Balls, Edward M. Shadow Chancellor of the Exchequer
PRT Balsemão, Francisco Pinto Chairman, Impresa SGPS
FRA Baroin, François Member of Parliament (UMP); Mayor of Troyes
FRA Baverez, Nicolas Partner, Gibson, Dunn & Crutcher LLP
USA Berggruen, Nicolas Chairman, Berggruen Institute on Governance
ITA Bernabè, Franco Chairman, FB Group SRL
DNK Besenbacher, Flemming Chairman, The Carlsberg Group
NLD Beurden, Ben van CEO, Royal Dutch Shell plc
SWE Bildt, Carl Minister for Foreign Affairs
NOR Brandtzæg, Svein Richard President and CEO, Norsk Hydro ASA
INT Breedlove, Philip M. Supreme Allied Commander Europe
AUT Bronner, Oscar Publisher, Der STANDARD Verlagsgesellschaft m.b.H.
SWE Buskhe, Håkan President and CEO, Saab AB
TUR Çandar, Cengiz Senior Columnist, Al Monitor and Radikal
ESP Cebrián, Juan Luis Executive Chairman, Grupo PRISA
FRA Chalendar, Pierre-André de Chairman and CEO, Saint-Gobain
CAN Clark, W. Edmund Group President and CEO, TD Bank Group
INT Coeuré, Benoît Member of the Executive Board, European Central Bank
IRL Coveney, Simon Minister for Agriculture, Food and the Marine
GBR Cowper-Coles, Sherard Senior Adviser to the Group Chairman and Group CEO, HSBC Holdings plc
BEL Davignon, Etienne Minister of State
USA Donilon, Thomas E. Senior Partner, O’Melveny and Myers; Former U.S. National Security Advisor
DEU Döpfner, Mathias CEO, Axel Springer SE
GBR Dudley, Robert Group Chief Executive, BP plc
FIN Ehrnrooth, Henrik Chairman, Caverion Corporation, Otava and Pöyry PLC
ITA Elkann, John Chairman, Fiat S.p.A.
DEU Enders, Thomas CEO, Airbus Group
DNK Federspiel, Ulrik Executive Vice President, Haldor Topsøe A/S
USA Feldstein, Martin S. Professor of Economics, Harvard University; President Emeritus, NBER
CAN Ferguson, Brian President and CEO, Cenovus Energy Inc.
GBR Flint, Douglas J. Group Chairman, HSBC Holdings plc
ESP García-Margallo, José Manuel Minister of Foreign Affairs and Cooperation
USA Gfoeller, Michael Independent Consultant
TUR Göle, Nilüfer Professor of Sociology, École des Hautes Études en Sciences Sociales
USA Greenberg, Evan G. Chairman and CEO, ACE Group
GBR Greening, Justine Secretary of State for International Development
NLD Halberstadt, Victor Professor of Economics, Leiden University
USA Hockfield, Susan President Emerita, Massachusetts Institute of Technology
NOR Høegh, Leif O. Chairman, Höegh Autoliners AS
NOR Høegh, Westye Senior Advisor, Höegh Autoliners AS
USA Hoffman, Reid Co-Founder and Executive Chairman, LinkedIn
CHN Huang, Yiping Professor of Economics, National School of Development, Peking University
USA Jackson, Shirley Ann President, Rensselaer Polytechnic Institute
USA Jacobs, Kenneth M. Chairman and CEO, Lazard
USA Johnson, James A. Chairman, Johnson Capital Partners
USA Karp, Alex CEO, Palantir Technologies
USA Katz, Bruce J. Vice President and Co-Director, Metropolitan Policy Program, The Brookings Institution
CAN Kenney, Jason T. Minister of Employment and Social Development
GBR Kerr, John Deputy Chairman, Scottish Power
USA Kissinger, Henry A. Chairman, Kissinger Associates, Inc.
USA Kleinfeld, Klaus Chairman and CEO, Alcoa
TUR Koç, Mustafa Chairman, Koç Holding A.S.
DNK Kragh, Steffen President and CEO, Egmont
USA Kravis, Henry R. Co-Chairman and Co-CEO, Kohlberg Kravis Roberts & Co.
USA Kravis, Marie-Josée Senior Fellow and Vice Chair, Hudson Institute
CHE Kudelski, André Chairman and CEO, Kudelski Group
INT Lagarde, Christine Managing Director, International Monetary Fund
BEL Leysen, Thomas Chairman of the Board of Directors, KBC Group
USA Li, Cheng Director, John L.Thornton China Center,The Brookings Institution
SWE Lifvendahl, Tove Political Editor in Chief, Svenska Dagbladet
CHN Liu, He Minister, Office of the Central Leading Group on Financial and Economic Affairs
PRT Macedo, Paulo Minister of Health
FRA Macron, Emmanuel Deputy Secretary General of the Presidency
ITA Maggioni, Monica Editor-in-Chief, Rainews24, RAI TV
GBR Mandelson, Peter Chairman, Global Counsel LLP
USA McAfee, Andrew Principal Research Scientist, Massachusetts Institute of Technology
PRT Medeiros, Inês de Member of Parliament, Socialist Party
GBR Micklethwait, John Editor-in-Chief, The Economist
GRC Mitsotaki, Alexandra Chair, ActionAid Hellas
ITA Monti, Mario Senator-for-life; President, Bocconi University
USA Mundie, Craig J. Senior Advisor to the CEO, Microsoft Corporation
CAN Munroe-Blum, Heather Professor of Medicine and Principal (President) Emerita, McGill University
USA Murray, Charles A. W.H. Brady Scholar, American Enterprise Institute for Public Policy Research
NLD Netherlands, H.R.H. Princess Beatrix of the
ESP Nin Génova, Juan María Deputy Chairman and CEO, CaixaBank
FRA Nougayrède, Natalie Director and Executive Editor, Le Monde
DNK Olesen, Søren-Peter Professor; Member of the Board of Directors, The Carlsberg Foundation
FIN Ollila, Jorma Chairman, Royal Dutch Shell, plc; Chairman, Outokumpu Plc
TUR Oran, Umut Deputy Chairman, Republican People’s Party (CHP)
GBR Osborne, George Chancellor of the Exchequer
FRA Pellerin, Fleur State Secretary for Foreign Trade
USA Perle, Richard N. Resident Fellow, American Enterprise Institute
USA Petraeus, David H. Chairman, KKR Global Institute
CAN Poloz, Stephen S. Governor, Bank of Canada
INT Rasmussen, Anders Fogh Secretary General, NATO
DNK Rasmussen, Jørgen Huno Chairman of the Board of Trustees, The Lundbeck Foundation
INT Reding, Viviane Vice President and Commissioner for Justice, Fundamental Rights and Citizenship, European Commission
USA Reed, Kasim Mayor of Atlanta
CAN Reisman, Heather M. Chair and CEO, Indigo Books & Music Inc.
NOR Reiten, Eivind Chairman, Klaveness Marine Holding AS
DEU Röttgen, Norbert Chairman, Foreign Affairs Committee, German Bundestag
USA Rubin, Robert E. Co-Chair, Council on Foreign Relations; Former Secretary of the Treasury
USA Rumer, Eugene Senior Associate and Director, Russia and Eurasia Program, Carnegie Endowment for International Peace
NOR Rynning-Tønnesen, Christian President and CEO, Statkraft AS
NLD Samsom, Diederik M. Parliamentary Leader PvdA (Labour Party)
GBR Sawers, John Chief, Secret Intelligence Service
NLD Scheffer, Paul J. Author; Professor of European Studies, Tilburg University
NLD Schippers, Edith Minister of Health, Welfare and Sport
USA Schmidt, Eric E. Executive Chairman, Google Inc.
AUT Scholten, Rudolf CEO, Oesterreichische Kontrollbank AG
USA Shih, Clara CEO and Founder, Hearsay Social
FIN Siilasmaa, Risto K. Chairman of the Board of Directors and Interim CEO, Nokia Corporation
ESP Spain, H.M. the Queen of
USA Spence, A. Michael Professor of Economics, New York University
FIN Stadigh, Kari President and CEO, Sampo plc
USA Summers, Lawrence H. Charles W. Eliot University Professor, Harvard University
IRL Sutherland, Peter D. Chairman, Goldman Sachs International; UN Special Representative for Migration
SWE Svanberg, Carl-Henric Chairman, Volvo AB and BP plc
TUR Taftalı, A. Ümit Member of the Board, Suna and Inan Kiraç Foundation
USA Thiel, Peter A. President, Thiel Capital
DNK Topsøe, Henrik Chairman, Haldor Topsøe A/S
GRC Tsoukalis, Loukas President, Hellenic Foundation for European and Foreign Policy
NOR Ulltveit-Moe, Jens Founder and CEO, Umoe AS
INT Üzümcü, Ahmet Director-General, Organisation for the Prohibition of Chemical Weapons
CHE Vasella, Daniel L. Honorary Chairman, Novartis International
FIN Wahlroos, Björn Chairman, Sampo plc
SWE Wallenberg, Jacob Chairman, Investor AB
SWE Wallenberg, Marcus Chairman of the Board of Directors, Skandinaviska Enskilda Banken AB
USA Warsh, Kevin M. Distinguished Visiting Fellow and Lecturer, Stanford University
GBR Wolf, Martin H. Chief Economics Commentator, The Financial Times
USA Wolfensohn, James D. Chairman and CEO, Wolfensohn and Company
NLD Zalm, Gerrit Chairman of the Managing Board, ABN-AMRO Bank N.V.
GRC Zanias, George Chairman of the Board, National Bank of Greece
USA Zoellick, Robert B. Chairman, Board of International Advisors, The Goldman Sachs Group
And here’s the agenda of what they were apparently going to discuss:
- The key topics for discussion this year include:
- Is the economic recovery sustainable?
- Who will pay for the demographics?
- Does privacy exist?
- How special is the relationship in intelligence sharing?
- Big shifts in technology and jobs
- The future of democracy and the middle class trap
- China’s political and economic outlook
- The new architecture of the Middle East
- What next for Europe?
- Current events
When you’re in a hole, should you keep digging? When you’re having a bad night in the casino, should you keep doubling up on black until you’ve lost your jacket, your car, your house? Should you give an alcoholic more drink, just to give them a temporary reprieve from their misery?
Probably not, but that doesn’t seem to stop the powers that be in Europe from living in denial. Sooner or later, they are going to have to swallow that bitter pill they’ve been putting off taking for years, and accept that the euro was doomed from day one. Furthermore, they’ll have to accept that political union won’t work, because the people don’t want it. Free trade? Yes. Friendship? Yes. Co-operation where it makes sense? Yes. Political union? No.
Europe is a place of varying cultures, climates, languages, histories and attitudes. It makes sense for the peoples of each nation to be proud of, and wish to maintain them.
The BBC, too, is living in denial, and is, in many ways, an extension of the political establishment.
After many years of side-lining thoughtful people who predicted the collapse of the euro, by prefixing their comments with loaded words like ‘Europhobe’ (a phobia is an irrational fear, concerns about the EU are anything but), and giving them limited airtime in comparison to Europhiles, they are still denying the blindingly obvious.
On the morning of 24 May 2012, BBC Radio Five Live began the 9am news bulletin with the empty statement: “European Union leaders ended six hours of talks in Brussels in the early hours of this morning with a pledge to make economic growth a priority.”
Well, that’s a relief, isn’t it? What else could they possibly have said? ‘We have decided to put this on-going crisis on the back burner until further notice’? Hardly!
After the news, presenter Nicky Campbell introduced the phone-in by introducing an ‘expert’ on European financial affairs called Graham Bishop. It’s a relief to hear somebody knows what’s going on and where we’re heading. Based on the events of the last few months, the governments of the EU, the markets, and the financial sector certainly don’t seem to. At last, it seemed Campbell had cracked it by finding this man and bringing him on to the programme to put all our minds at rest.
Ah, but hang on. A quick bit of online research teaches us that Mr Bishop is a long-term advocate of much greater political, as well as financial union. He is entitled to his opinion, but he should have received a far more accurate introduction by Campbell.
Before the interview began, Campbell introduced veteran Conservative MP and Maastricht rebel, Bill Cash, as well as Sony Kapoor, chairman of the Eurozone think-tank ‘Redefine’. Looking at its website, the overall tone is one of belief in the EU and Eurozone project, but that it should be subject to radical reform.
So, before the questioning had even begun, Europhiles outnumbered Euro-sceptics two to one. Why was this? Kapoor was invited to speak first, and said that the euro could survive and flourish ‘with reform’. Bishop spoke next, and said it ‘remains a good idea’, and that things would be worse if each country had kept its own currency, a statement that went unchallenged by Campbell.
Nine minutes into the programme, Bishop and Kapoor had spoken several times (Kapoor spoke about ‘the march of history’), but before Cash was invited to speak, the first caller, ‘Kevin from Norfolk’ had his say. He said: “We should move faster towards a United States of Europe. We, the British people, need to join the euro as soon as we possibly can.”
Where on earth do they find these people? As far as I can tell, it’s only the long-time left-wing bore Will Hutton, a former Bilderberg attendee with his own agenda, and ‘Kevin from Norfolk’, who believe Britain would still be better off joining the euro. Even the likes of Michael Heseltine and mega-enthusiasts in the Liberal Democrats tend to keep their mouths shut these days.
It was a full 10 minutes into the programme before Cash was invited to speak. While others were given a soft opening by Campbell, he began his questioning of Cash by asking: “Bill Cash, are you spitting out your kedgeree yet?”
As the programme continued, listeners heard horror stories about what would happen if Britain left the EU, using feeble arguments about how the EU wouldn’t want to trade with us. Not once did they point out that the EU sells more to us than we sell to them, so therefore it would be in their interests to sign a free-trade agreement with us, just as more than 90 non-EU countries around the would have done.
Campbell himself has plenty of previous form when it comes to pushing the euro’s cause. Way back on Sunday, 18 February, 2001, a few months before the general election, Campbell fronted a programme called ‘Referendum Street’, which went out on prime-time BBC One.
In it, the residents of a North London street were intensely canvassed by a team of politicians, journalists and businesspeople, from both sides of the argument, with a referendum taking place at the end of the weekend.
The ‘Yes’ campaign included, surprise, surprise, Will Hutton and the late Labour MP, Tony Banks. The ‘No’ campaign included David Mellor, who had long before become a figure of ridicule, and Austin Mitchell MP.
When the result was announced, the residents had voted ‘Yes’ to joining the euro. However, all was not as it seemed. An investigation by Mail on Sunday journalist Peter Hitchens revealed that some residents in the street, who were firmly against joining the euro, hadn’t even been invited to participate in the programme.
As a former BBC freelancer myself, I have seen the institutional pro-EU bias in action. I am not alone in my thinking. To quote Andrew Marr: “The BBC is not impartial or neutral. It’s a publicly funded, urban organisation with an abnormally large number of young people, ethnic minorities and gay people. It has a liberal bias not so much a party-political bias. It is better expressed as a cultural liberal bias.”
It’s far from certain whether most of those who live inside the BBC bubble even realise this bias exists. From their days in the Oxbridge dormitories, through to the day they die, they rarely meet people who disagree with their world view. Those who are occasionally invited on to TV and radio programmes to give a different perspective are dismissed behind the scenes, by polite people as ‘swivel-eyed Little Englanders’ and by the less polite as ‘fascists’ and ‘bigots’.
The now-retired newsreader, Peter Sissons, who spent a considerable chunk of his career elsewhere before joining the BBC, summed up, in more specific terms than Marr, how the BBC mindset works in his autobiography: “Whatever the United Nations is associated with is good — it is heresy to question any of its activities. The EU is also a good thing, but not quite as good as the UN. Soaking the rich is good, despite well-founded economic arguments that the more you tax, the less you get. And Government spending is a good thing, although most BBC people prefer to call it investment, in line with New Labour’s terminology.
“All green and environmental groups are very good things. Al Gore is a saint. George Bush was a bad thing, and thick into the bargain. Obama was not just the Democratic Party’s candidate for the White House, he was the BBC’s. Blair was good, Brown bad, but the BBC has now lost interest in both.
“Trade unions are mostly good things, especially when they are fighting BBC managers. Quangos are also mostly good, and the reports they produce are usually handled uncritically. The Royal Family is a bore. Islam must not be offended at any price, although Christians are fair game because they do nothing about it if they are offended.”
An example of Sissons’s claims in action came earlier the same week on the Victoria Derbyshire phone-in, which came from an abortion clinic. At the hand-over between Campbell and Derbyshire shortly before 10am, Campbell introduced it as ‘a very special programme’.
Critics of the idea point out that presenting the programme from an abortion clinic effectively turned it into an advert. Maybe, maybe not, but I’d believe the BBC’s coverage was balanced, if, on another morning, they presented it from a Roman Catholic-run centre that offers counselling to women who have suffered psychological problems following an abortion. We all know the BBC wouldn’t dream of doing that. Christian values? Nah, they’re a bit too stuffy and ‘old Britain’ for them.
The brilliant Yes, Minister co-writer, Sir Anthony Jay, adds another layer to the argument, and wrote in the Telegraph that the BBC has an anti-business bias. He said: “[The BBC has] a remarkable lack of interest in industry and a deep hostility to business and commerce……Very few of the BBC producers and executives have any real experience of the business world, and as so often happens, this ignorance, far from giving rise to doubt, increases their certainty.”
The BBC’s first business editor, Jeff Randall, was brought in by then-Director General Greg Dyke, who heard alarm bells ringing in his head when the BBC failed to cover the Vodafone bid for German company Mannesmann, which was, at the time, the world’s biggest takeover bid.
Dyke wisely understood the need for change, and told senior news executives that ‘we need to bring someone in who’s not like us’. Randall, with his vast experience with the Telegraph and elsewhere covering commerce and finance, was appointed to his role.
Randall was told by Dyke not to go native, but to be an agent of change. However, Randall openly admits he never really fitted in at the BBC. Speaking to the Observer, he said: “On the whole, they treated business as if it was a criminal activity. I was there to rattle cages and, if necessary, make myself unpopular to force business up the news agenda.
“They didn’t distinguish between me being passionate about business and me being an apologist for business.
“I never really felt like a BBC person. I was always an outsider looking in. I challenged a lot of values. There are certain issues the BBC regards as basic truths.”
Randall highlighted the NHS as one example where the BBC’s institutional bias shines through. He said: “Most people at the BBC would think it’s a good thing for the government to spend more money on the NHS and it goes unchallenged. There’s a section of opinion out there who think it’s throwing money down the drain.”
Asked by the interviewer whether BBC journalists ever give Labour ministers a hard time, he said: “They attack Labour ministers, but usually for not being sufficiently left-wing.”
One area where Randall really did feel he changed the tone of the debate was on immigration. On one occasion, he wore Union Jack cufflinks into work but was rebuked with ‘You can’t do that, that’s like the National Front!’. This horrid generalisation is not only a form of bigotry, but shows a lack of regard for the concept of Britain as a nation state.
Despite this absurd episode, Randall believes he made progress in this area. He said: “At the risk of sounding immodest, I think I changed the terms of the debate. Whenever we had an anti-immigration interviewee, it was a Nazi with a tattoo on his face who looked like he’d just bitten the head off a cat. I pointed out that it’s the white working class who have to make immigration work. Immigrants don’t move to Hampstead, mate.”
Are Marr, Sissons, Randall and, erm, Stead all wrong? Probably not. All four are examples of people who had experience of working in the commercial sector before entering the BBC. The institutional bias is very real indeed, and since Greg Dyke’s departure, steps to correct it seem to have been stopped. To an extent, at least, Dyke understood the problem, and acknowledged he was of that ilk, and his successor, Mark Thompson, has admitted the BBC had a problem with a ‘massive bias to the left’, but crucially added ‘in the past’. He seems to think things have improved in recent times, but declined to give practical examples as to how and what has taken place.
Following his recent electioral victory, London Mayor Boris Johnson put it both succinctly and bluntly when he said: “No wonder – and I speak as one who has just fought a campaign in which I sometimes felt that my chief opponent was the local BBC news – the prevailing view of Beeb newsrooms is, with honourable exceptions, statist, corporatist, defeatist, anti-business, Europhile and, above all, overwhelmingly biased to the left.” Johnson said the corporation treated Eurosceptic views as “if they were vaguely mad and unpleasant” and “completely ignored” the private sector.”
Johnson added that he believes that Thompson’s successor should be a Tory. This is not desirable, and is overly-confrontational. What is required is a Director General who has experience in both programme making and business – somebody who will massively slim down the layers of management and streamline the decision-making process, while having a sound understanding of public service broadcasting and where the corporation’s priorities should lie.
Importantly, he or she needs to get to grips with the issue of institutional bias. Journalists from non-establishment perspectives need to be appointed to key positions: euro-sceptics, traditional Christians, people who believe in the small-state, or the death penalty. Such people are a rare species in the BBC offices and corridors at present, but in the real world they exist in their millions.
Of course, they will be expected to behave neutrally when in work and present a balanced perspective on all stories, but the word ‘balance’ is the key, and this could be better achieved by bringing in people from very different backgrounds from the ‘establishment’ BBC line.
The issue of the upcoming collapse of the euro must be a very difficult pill to swallow for BBC types. When it happens (and we are now talking ‘when’, rather than ‘if’) they will be forced to accept that all the smug assumptions they have been making at Islington dinner parties for years have been proved utterly wrong. It was the euro-sceptics, from the traditional left, to the Daily Mail reading right, who can take all the credit for having seen it coming a mile off.
Until then, the BBC seems happy to continue its deluded fantasy of an EU wonderland.
FORMER Cardiff City striker Jay Bothroyd risks being taken to court for failing to pay a car repair bill totalling little more than £1,000.
The 29-year-old, who this summer transferred to big-spending Premier League newcomers QPR, is believed to be earning a basic salary of £25,000 per week, with a £2,500 bonus for every game he plays along with a £250,000 windfall if the club survives relegation.
Despite this, the former England international has failed to pay a bill totalling £1,050.64 for repairs to his Mercedes and Range Rover.
The work was carried out in late 2010 by garage owner Dave Prance, who maintains vehicles belonging to most of the Cardiff City players and staff. However, after a lengthy exchange of text messages between him and Bothroyd, his patience is running out.
He said: “I have a very good relationship with the vast majority of the players and staff, and I’m astonished that someone who is on as much money as Jay would be dragging out something like this for so long.”
During the exchange of texts, Bothroyd made a series of excuses, including one on 20 May when he said he had to get out of Cardiff because he was ‘too p****d off’. Shortly after his departure from the Bluebirds, Bothroyd engaged in an angry exchange with a section of the club’s fans on Twitter.
Prance finally decided to take legal action after Bothroyd failed to respond to text messages sent on 22 August. He said: “I’m certainly not going to let this drop. I have been more that reasonable in giving him time to pay. He hasn’t indicated that he is unhappy with the work we carried out, but is just making excuse after excuse for not paying.
“My solicitor was away when I first decided to take action, but he’s written to Bothroyd directly in the last week or so. I hope he has the good sense to pay his bill in the very near future, otherwise I’ll have no option but to take him to a small claims court.”
A spokesman for QPR declined to comment.
WHEN Sir Richard Branson launched Virgin Cola in 1994, his intensions were clear: he wanted the brand to be as well-known around the world as market leader Coca-Cola.
But after 16 years, Virgin Cola has died a quiet death in the UK and US with Asda, its last major distributor, confirming it has discontinued the product following its removal from the shelves in August 2009. The following month, its licensed producer, Silver Spring Mineral Water, went into administration, and no replacement has been found to continue production for the UK market.
Virgin Cola launched amid huge publicity and expectations to match. Branson teamed up with Cott Corporation, a Canadian private-label soda maker, in a 50/50 equity joint venture to produce cola under the Virgin banner. Following a modest start in Britain, in 1998 Branson took his cola brand to the US where he sought to create a major rival to Coca-Cola and Pepsi, who he called the ‘cola duopolists’.
Branson launched the product in the US by riding a vintage Sherman tank through New York’s Times Square, crushing rival brands’ bottles on the path below.
The tank aimed fire at a huge Coca-Cola advert, and Britain’s best-known entrepreneur placed his own 40-foot Virgin Cola billboard right above the Times Square Virgin Megastore.
Virgin Cola also enjoyed high-profile celebrity endorsements in its early days. When the 500ml bottles launched, they were marketed as “The Pammy”, as their curves were designed to resemble Pamela Anderson who was at the height of her popularity in the UK and USA at the time.
Characters from the sitcom ‘Friends’ were occasionally seen drinking the product, during the period when the programme was one of the most popular shows on US television and had become an international hit.
Immediately, there were raised eyebrows among those who understood the market. John Sicher, publisher of the US trade publication Beverage Digest, was instantly dismissive. He said: “It would be easier to make a snowman in July in Florida than to take on Coke and Pepsi.”
Even before the high-profile US launch, there were serious problems: Virgin Cola’s relationship with Cott Corporation broke down due to a dispute over strategy, and Branson bought Cott’s stake in the company shortly before the US launch. In Britain, the drink was manufactured under licence first to soft drink manufacturer Prince’s, before production switched to Silver Spring.
Despite some initial success, it quickly became clear that Virgin Cola was struggling to compete with its more established rivals.
As Branson himself acknowledged, the Virgin brand has usually succeeded in other areas by exploiting competitors’ weaknesses. He once said: “We often move into areas where the customer has traditionally received a poor deal, and where the competition is complacent.”
However, in the cola market, Coca-Cola and Pepsi have always shown themselves to be anything but complacent when faced with a new competitor. Rob Baskin, Coca-Cola’s spokesman in the USA said at the time of Virgin’s launch: “We take all competition seriously”.
Sensing the potential of Branson’s company, Coca-Cola responded to the launch of Virgin by immediately doubling its advertising and promotion budget.
Coca-Cola showed how seriously they took any new competition when Sainsbury’s launched their ‘Classic Cola’ product in the mid-1990s, which contained a curved stripe on the packaging resembling that of Coca-Cola’s. Following complaints from their more established rivals, Sainsbury’s quickly removed the stripe from the new brand.
A major reason Virgin Cola found it difficult to compete in the UK was problems with distribution. After the furore of the launch had died down, the label struggled to gain 3% of the UK market and has never made a profit.
By 1999, it had become clear that Virgin’s plans to become a major player in the cola market on both sides of the Atlantic were not going well. That year, Virgin Cola had sales of £28.6 million in the UK, compared with Coca-Cola’s £620.4 million. Branson had earlier predicted that Virgin would outsell Pepsi in his home country.
At the start of the new millennium, it was obvious that Virgin’s ambitions of competing with Coca-Cola and Pepsi were over, but they continued to innovate, and in June 2000 introduced a new product aimed at children called Mini-V, which was caffeine-free, contained no artificial sweeteners and had 30% less sugar.
Yet despite a £3 million advertising campaign, Mini-V flopped and had disappeared from the shelves within a matter of months.
In 2004, another attempt was made at stamping Virgin Cola’s presence on the US market, albeit in a much more low key way than their previous effort had been.
The company teamed up with US group The Firm to create Virgin Drinks North America, which manufactured and distributed the drink to 7-Eleven stores in Southern California, but once again the venture was short lived.
In Britain, Virgin Cola was gradually dropped by supermarkets and smaller chains, leaving its presence largely confined to Asda stores, who only stocked it in large, two litre bottles, costing between 20-30% less than their rivals.
It maintained a limited presence in independent newsagents, and continued to be sold on Virgin trains and airlines, but by 2005 advertising was virtually non-existent and Branson had given up on his dreams of rivalling cola’s ‘big two’ companies.
The product had failed to carve its place in the market and dominated by Coca-Cola and Pepsi, and had not succeeded in establishing itself as anything other than an own-brand cola, without the excitement and sense of adventure normally associated with the Virgin name.
Asda continued to stock Virgin Cola until August 2009, when it was dropped due to poor sales. Asda spokeswoman Lucy Robinson said: “Our aim is to provide a ‘one-stop shop’ where customers can find everything they need in a comfortable shopping environment.
“Space is at a premium in all our stores and sometimes we have to stop selling unpopular products to make room for new, or better selling ones. Therefore, Virgin Cola has been discontinued due to poor sales across Asda.”
The following month, its manufacturer, Silver Spring, entered administration, which caused production and distribution to cease in the UK. Marcia Bourne, spokeswoman for Silver Spring said: “Silver Spring Mineral Water Company did use to produce Virgin Cola under licence and supply such retailers as Asda.
“However, in September 2009, Silver Spring went into administration and as a result the contract with Virgin was no longer a going concern.
“A Private Equity company subsequently bought our business and we became Silver Spring Soft Drinks Ltd, but we took the strategic decision at that time not to take over the Virgin contract.”
The events of the autumn of 2009 appear to have caused the quiet death of the Virgin Cola brand in Britain and America, after a loud, if unconventional birth 16 years earlier. It continues to exist in the Philippines and Nigeria, where it is produced and sold under profitable licence, but that is now the extent of Virgin Cola’s ambitions. Virgin spokesman Nick Fox played down the chances of the company making another attempt at becoming a force in the cola market in Britain and America. He said: “At the moment we monitor the drinks market internationally for possible opportunities – but there are no current plans to revive the brand in the UK.”
Sir Richard Branson’s reputation as the ‘have a go’ businessman with a cheeky sense of challenge has survived the Virgin Cola saga in tact and this, along with Virgin Cosmetics and Virgin Brides, have been rare failures in a brand that extends to more than 360 different companies.
Yet it appears that deep pockets, a charismatic chairman and a proactive approach to business are not enough to break the market dominance of Coca-Cola and Pepsi.