‘Britain is like Madonna, it needs to reinvent itself’ – those words from Margaret Wood, the boss of a small manufacturer in Wakefield, made her fellow members of the ITV Business Club laugh, but they all agreed, she has a point. To find out why we need to change, and how it can be done, the ITV News Business Club has pulled together around a 100 companies from every corner of the country, and we will follow their fears and fortunes throughout the next 12 months.
Business is surely booming for those who make economic predictions, but it’s less common to hear from the men and women who are actually fighting to grow the economy – whether that is Andy Clarke, the boss of Asda who hopes to take on more staff this year, Tim Martin, one of the nation’s biggest publicans, the boss of Wetherspoon’s pubs, or Clippy McKenna who just wants to be able to pay herself a wage as she builds Clippy’s Apples, the firm she started three years ago using the fruit in her back garden. In a glass walled room in the heart of the City of London I listened for an hour as they talked about the obstacles and the opportunities they face.
With warnings that we are already sliding back into recession, not one of our panel believes that 2012 will be easy. Some of the fears they raise are familiar. Kavita Oberoi, one of the country’s most successful female entrepreneurs, told of her frustration when she was turned down for short term 6 week loan by her bank. Clippy McKenna told how even with contracts to buy her product from some of the country’s supermarket chains she was refused finance by several banks. They put those concerns directly to Chris Sullivan, the man responsible for more business lending than anyone else in the country, at the Royal Bank of Scotland. He said that the Bank was doing everything in his power to try to get more money out of the door, but that he feared that a lack of bank lending was ‘being used as an excuse’ for the lack of confidence in the economy. Words likely to enrage some firms who have found almost it impossible to get the funding they crave. But he insisted that RBS was trying its best.
But concerns about the education system at several levels were high on their agenda too. Miles Bullough, of Aardman Animations, the creator of Wallace and Gromit, said there had been a ’shocking fall’ in the quality of British graduates, so much so that his company is turning to France and other countries to start providing its talent. Ian Tyler, the boss of one of the country’s biggest construction companies, Balfour Beatty, said ‘huge instability’ in training had played havoc with creating a decent work force in the recent years, so there is a shortage of the staff they need. Keith Anderson, from Scottish Power identified another skills shortage on the way. With many engineers nearing retirement he warned that if the UK doesn’t act fast to train more then they will have to start recruiting more staff from abroad.
And several of our Business Club feel they up against foreign competitors who have an unfair advantage. Aardman Animations compete against other countries where animators receive tax breaks. Bullough said that he ‘didn’t want anyone to get subsidies’ but if other countries’ were giving them out, then UK firms deserved the same. He doesn’t understand why UK film receives such support, but hugely successful animation companies making hits like Wallace and Gromit don’t get the same treatment. And while Tim Martin is hugely supportive of the government’s action over the European treaty, he says simply, if he were in business on the other side of the Channel, he would pay a fraction of the tax. Those two were not alone in calling for a level playing field.
But for the big employers in the room what was most striking was the sense of urgency they believe is necessary – a sense of urgency they don’t believe is being shown right now by the government. It is no secret that large corporations are sitting on large mountains of cash right now. Keith Anderson told us his goal for this year is to be able to ‘invest a billion pounds’. That does not, according to him or Andy Clarke from Asda, require them, us or the taxpayer to spend any money, but for government to create a climate where things happen quickly, and then get out of the way. Whether on decisions around planning, or education, or infrastructure, ’speed’ of decisions is what they want. So will that happen in this critical year? I asked if they thought anyone in the government understood what it was like to run a company – they all shook their head. But whatever the size of the company, the knowledge or experience of the boss, these are people who do believe that our economy is worth fighting for and there is opportunity out there to be grabbed. Through the year we will learn the extent to which they are able to take it.
Tags: #itvbizclub, @Business, Economy
Conditions are tough for business, more so for businesses that were established during one of the longest spells of uninterrupted growth in living memory. These businesses have little experience of trading in a recessionary environment and will struggle.
Now is a good time to start a business though, if you can survive the first few years (most startups will fail in this period even in boom times) then you will be ideally placed to take advantage when the upturn comes.
The grit and determination of people like Clippy should be encouraged, Chris Sullivan needs to ensure that easier access to advice and finance is made available to startups and to cut the costs of doing business with the bank.
Miles, Ian and Keith need to take ownership of the training problems and start sponsoring students in the subject areas they require rather than complaining of the quality/suitability of graduates
Andy Clarke should read the comments section of Robert Pestons’ blog on Tesco with regard to customer service, staffing levels and stock availibilty, if he plays his cards right ASDA could easily take the top spot.
Is this the end of Tesco’s UK growth?
And finally, Tim, you might pay a fraction of the tax over the channel but this is easily compensated for by the huge amount of bureaucracy he would find himself tangled up in.