Dictatorship or democracy? Which is best? The textbook answer is democracy, of course, but on planning matters, letting the people decide has proved disastrous, delaying infrastructure projects and damaging Britain’s progress. Yet if we opt for dictatorship, who should be the dictator?

That is the crux of the government’s proposals for reforming the planning process. The UK’s existing regime is so democratic it allows decisions to be prolonged for so long they are often pointless. Projects are outdated or inadequate when eventually built; they are never started because they are no longer viable – or governments veto schemes for fear of making unpopular decisions.

(more…)

To describe the UK government’s latest proposed legislation on discrimination as a dogs’ dinner should not be taken as referring only to male canines. Or to suggest that other animals will not be fed either. But the proposals make a mess messier, however well-meant.

Those groups that have been discriminated against in past generations are to be compensated by being put at the front of the queue for jobs. The idea that discrimination is the best way to counter discrimination highlights the muddled thinking.

(more…)

Must a recession be gloomy? It is too easy to concentrate on the negative aspects of economic slowdown without appreciating the opportunities they offer.

This is the time to be countercyclical. When other companies cut prices because sales are falling, the bold business should consider buying. In particular, recessions are a good time for capital spending: building work will be cheap, machinery discounted and vehicle fleets offered on terms designed to clear stocks. And when finance is tight elsewhere in the economy, many desperate companies will nevertheless be tempted to extend credit simply to gain turnover.

(more…)

If there had been no oil shock would the credit crunch be so bad? Or if finance markets had not seized up, could we accommodate the rise in energy costs more readily. It is a game of What If? - but which of the crises is the worst? And does the combination of global crises compound their effect?

Business and the consumer are being squeezed from both sides. It is harder and more expensive to raise capital and the costs of power are rising, increasing the costs of manufacturing for companies and leaving less disposable income for the public to spend.

(more…)

Booms permit excesses and one of the luxuries we adopted when the economy was growing rapidly was to adopt a social agenda that ranged from corporate responsibility to green projects. It may have been fun while it lasted but now that belts are being tightened, these should be the first luxuries to go.

Even if these were genuine good causes, they rely on a sound economic base to pay for them. And if we do not shore up the financial foundations – corporate and national – now, there will nothing on which to resume building these projects in future.

(more…)

Orange is a distinctive colour that has attracted the attention of marketing men at many companies. In Britain the RAC car breakdown service repainted its blue vans orange and the British School of Motoring has adopted its bright tones. EasyJet has tried to lay claim to it as a colour to apply across all its brands – and a mobile phone company uses the name as well as the hue.

It is in your face, but it works as a marketing technique. Yet, as viewers of the European football tournament have been reminded, the colour has been hijacked as a country branding as well as a corporate branding. The Dutch team is decked in orange from neck to toe and its supporters wear the same colour – not just a scarf or replica shirt, but a whole uniform of orange so that the fans become a phalanx in the stands.

(more…)

Workers have found their own way to solve the pensions problem. Let down by employers, investment managers and government they have decided the best way to ensure a prosperous old age is to keep on working.

If one cause of the pension problem is that people are living longer then it is reasonable that one solution is to work longer. After decades when early retirement was a personal objective and corporate policy, employees are now choosing to work beyond the conventional retirements dates of 65 for men and 60 for women.

(more…)

You might not believe it from our self-deprecation, but Britain must be getting something right. The UK is again the top choice for foreign investment in Europe. Only the US and China beat Britain.

Indeed, according to the KPMG survey that put us in pole position, Britain will continue to be more popular than anywhere else in Europe for the next five years even if Russia and India move ahead of us. Given the populations of those four competitors, nevermind the scope for growth in all bar the US, the UK looks a lot more attractive from overseas than it does to most of the people based here.

(more…)

Just because the banks have botched their rights issues it is no reason for ripping up the principle of pre-emption. The rule that requires any cheap shares being issued to be offered first to existing shareholders is very sound.

Indeed, now that the going rate for rights-issue discounts is 40 per cent rather than the conventional 10 per cent, the need to protect existing investors from being diluted is even more important.

(more…)

Could the banks’ eagerness to raise capital ultimately damage their balance sheets? By jumping to the front of the rights issue queue they risk preventing their clients from raising the cash and capital that will allow them to service their loans - resulting in further write downs.

The banks are raising more than £16bn through rights issues - three-quarters of that for the Royal Bank of Scotland. That has vastly depleted the reserves fund managers have available for subscribing for new equity.
But by botching the funding - Bradford & Bingley has had to withdraw and reprice its issue while HBoS’s new shares risk being left with its underwriters - rights issues are no longer seen as an orderly way to raise capital.

(more…)