Tag Archives: HS2

 

The bookmakers odds for the May 7th general election are all over the place. The outcome looks the least predictable for decades now that coalition government and fixed-term parliaments have become the norm.

Turnout should be good though as more people tend to vote in a general election if the result is uncertain.

Depending on where you live you could have the choice of up to 12 mainstream parties to choose from: Conservative, Labour, Lib-Dem, SNP etc., plus up to 21 fringe parties such as the Yorkshire Devolution Party and CISTA – which sounds like an unpleasant personal infection. But if you live in the constituency of the Speaker of the House of Commons like wot I do then it’s much more boring. The mainstream guys have a gentlemans agreement not to field a competing candidate so we’ve only got the Greens and UKIP. And Nigel Farage isn’t the candidate here again as last time he had a nasty accident in an aeroplane.  Turnout should be good though as more people tend to vote in a general election if the result is uncertain. In 2001 a mere 59% of registered electors bothered to vote after Labour’s previous 1997 landslide win. In 2010 after the financial crisis the figure rose to 65% but not in central Manchester, Leeds or Birmingham where more than half still couldn’t be arsed to vote. Mind you that’s better than in Lithuania where only 37% turned-out for their last general election and a lot worse than in Australia where 94% did so. But in Oz it’s a legal obligation to do your civic duty and vote or you get fined £12 and thrown to the crocodiles.

 

If you’re feeling as interested as a Lithuanian but want to understand everyone’s policies and impress your mates down at the pub then go to the BBC’s excellent ‘policies at a glance’ website at http://www.bbc.co.uk/news/election/2015/manifesto-guide

‘Which county has created more jobs than the whole of France?..’

MP’s were waiting eagerly in March for the Chancellors pre-election budget. They expected a last-minute knock-down ‘Chancellors special’ but in the event came away disappointed. George Osborne sat back and rested on the Government laurels of the fastest growing post-recession economy in Europe. The Yorkshire Devolution Party (No MP’s, yet) was ecstatic when he announced ‘Which county has created more jobs than the whole of France? The great county of Yorkshire!’. George glossed-over the need to pay-down the governments £1.4 trillion of debt after the deficit has been sorted but did throw in a few morsels such as tax breaks for North Sea oil companies and reduced duty on beer and wine. The only real cheers were for fuel duty (no increase) and abolition of annual tax returns and national insurance contributions for the self-employed. Sadly, George didn’t lift the threshold for Vat registration and boost the ‘engine room of the economy’ as he calls small businesses.

The PM has announced plans for a ‘Northern powerhouse’

The government is definitely twitchy about accusations that a ‘Metropolitan elite’ is running the country and doing ‘nowt for the north’. To do something for marginal northern constituencies the PM has announced plans for a ‘Northern powerhouse’ fuelled by allowing Greater Manchester to keep 100% of the growth in local business rates and benefit from another high speed rail link – HS3. This would extend HS2 from Manchester and Leeds up to Newcastle, but quite how it can be financially-justified is another matter.

‘little more than a costly vanity project’ 

That has already been pointed out by the Commons Public Accounts Committee and the free-market think-tank the Institute of Economic Affairs. It’s spokesperson described it as ‘little more than a costly vanity project’ which is how Lord Mandelson has described it’s conception in the dying days of the last Labour administration.

The Small Business Rates Relief scheme is extended until 31st March 2016

Anyway, putting aside HS2’s unwelcome lack of a business case the government has moved to safer ground by confirming the Small Business Rates Relief scheme is extended until 31st March 2016. Most market businesses qualify for this waiver on rates payable so if you’re not already receiving it I strongly recommend you check with the rating office at your local council. If the rateable value of your premises is below £6,000 you’ll pay nothing at all and to encourage you to grow into bigger premises you’ll now receive the relief for 12 months after you occupy an additional property. This news was delivered at the same time as Danny Alexander, Chief Secretary to the Treasury announced a ‘radical review’ of the business rates system with its outcome to be announced in 2016. ‘The time has come for a radical review of this important tax. We want to ensure the system is fair, efficient and effective’ he said, which was nice to hear. But those of us with long memories will remember previous government attempts to reform the rating system have been torpedoed by the civil servants of the Valuation Office which employs lots of keen young surveyors to administer the system.

Just as exciting and unpredictable as the result of the general election was the result of this year’s Cheltenham Gold Cup.

Just as exciting and unpredictable as the result of the general election was the result of this year’s Cheltenham Gold Cup. Unfortunately my foolproof system to ‘Back the jockey – not the horse’ came unzipped, yet again. Tony McCoy and Carlingford Lough trundled in at ninth place whilst Nico de Boinville on Coneygree romped home to a well-deserved length and a half victory.

McCoy has announced he won’t be riding at Cheltenham again.  I can see a pattern emerging here.

 

 

The Chancellor's Autumn Statement

 

When journalist and broadcaster Alistair Cooke joined the New York Times he was puzzled by a large sign – KISS – hanging on the wall of the newsroom. His editor explained: ‘Keep It Simple, Stupid. Your readers have 10 minutes on the subway to read and understand your article. Then tomorrow it’s at the bottom of their budgie cage’. At the beginning of December, just before the Chancellor’s Autumn statement the business consultancy Deloitte did just that with their annual ‘State of the State’ report. It was published in partnership with the independent Think Tank ‘Reform’ to show how much progress the coalition government has made in restructuring the economy after the 2008 financial crisis. It is quite readable provided you have a bottle of gin to hand. You can download a copy from:

http://www2.deloitte.com/content/dam/Deloitte/uk/Documents/public-sector/deloitt-uk-state-of-the-state-2014.pdf

‘Keep It Simple, Stupid. Your readers have 10 minutes on the subway to read and understand your article. Then tomorrow it’s at the bottom of their budgie cage’.

According to Deloitte/Reform about half of the necessary spending cuts have now been achieved, BUT all the quick fixes – public sector pay freezes and redundancies etc – have been used up. What’s still to come is going to be MUCH tougher. They suggest: ‘Councils are likely to move away from providing services they are not legally required to provide’ (such as markets) with the sting in the tail that: ‘Whilst early spending cuts took place in a recession, the coming ones will be in a period of economic GROWTH. Citizens are more likely to experience roads in disrepair, dirtier streets, unkempt parks, and fewer pools and libraries’. The UK has now emerged from recession and has the fastest-growing economy in the EU but government spending will still be savaged for years to come. As a retailer your turnover may be on the up but the services your Council provides are going south. The report suggests ‘the UK’s governance, public sector and citizen experience of public services is likely to change profoundly’. Picking up the phone to complain about a pothole is about to become history in the same way that car tax discs have.

Amazingly, prior to 2010 there was in effect no set of management accounts for the government.

The report steers clear of political point-scoring but does confirm the record annual budget deficit of 2010 meant the government spent £159 billion MORE than it received in income. This annual deficit has now been reduced by about half after the coalition government set itself the ambitious target of eliminating it entirely by 2018/19. Success to date has gone down well with our trading partners and particularly the establishment of the independent ‘Office of Budget Responsibility’ which produces ‘Whole Government Accounts’. Amazingly, prior to 2010 there was in effect no set of management accounts for the government. That’s not exactly the way to run a country or a local authority markets service either, but it happens. It’s even less impressive when you consider public spending has soared from £190 billion in 1964 to £730 billion in 2014. It now represents 44% of Gross Domestic Product i.e. business turnover for the UK and you are to blame for much of the problem. You keep getting healthier, more educated and living longer. Have you no shame?

HMG can start paying back the £1.4 trillion of debt which it borrowed to buy Royal Bank of Scotland etc

So once the annual deficit has been eliminated by ‘fiscal consolidation’ HMG can start paying back the £1.4 trillion of debt which it borrowed to buy Royal Bank of Scotland etc and prevent total economic meltdown. That debt continues to rise and costs the taxpayer £1 billion per week in interest payments – more than the government spends on education. The politicians can argue about how the deficit will be reduced – what spending cuts and over how long etc – but if the debt isn’t reduced then interest payments by 2023 will be three times greater than total expenditure on the armed forces.

‘National and local politicians have a duty to engage citizens in constructive dialogue about the changing limits of the state’

The authors of the report then interviewed public sector chief executives who are tasked with finding ways to save the money and implement the next round of cuts. This unwelcome problem has been dumped into their laps so they are less then flattering about their political masters. ‘National and local politicians have a duty to engage citizens in constructive dialogue about the changing limits of the state’ they say i.e. ‘As the elected representative it’s your duty to tell locals why I’m selling-off their playing fields and closing down the care homes’. Whichever government we have after next May the need to balance the books and buy-down the debt is so pressing that politicians won’t be able bury their heads in the sand and wait for economic growth to make the problem go away.

In his Autumn statement George rummaged around down the back of the sofa and found another £2 billion a year for the NHS

In his Autumn statement George rummaged around down the back of the sofa and found another £2 billion a year for the NHS, which was nice. He also introduced tax for companies like Starbucks which shift profits overseas, then cut the ability of banks to offset losses against profits during financial crises. Nicer still and all good tinkering in the run up to the general election to be followed (hopefully) by another last-minute announcement to scrap HS2 to save another £80 billion.

Some markets still make a reasonable profit for their owners but I’m sorry to say an equal number are total basket cases

So what does all this mean for the markets industry? The vast majority of markets are operated by local government as one of those ‘discretionary services’ now in the accountants sights. Some still make a reasonable profit for their owners but I’m sorry to say an equal number are total basket cases. For them any possibility of improvement is further away than ever unless their owners embrace some radical new ideas.

Why doesn’t George Osborne have grey hair?

And finally, if you’re planning to stand for election in May please consider a few other problems you’ll need to resolve as well: More independence and tax-raising powers for Scotland, improving national security and counter-terrorism, addressing immigration and maybe organising a referendum or two which could take the UK out of the EU. Not much really.

Which invites the question: Why doesn’t George Osborne have grey hair?

News-celebration

It’s time to celebrate – the recession is over!

Official government figures confirm the UK economy grew faster than expected in 2013 and at the fastest rate since the 2007 financial crisis.

Economic growth for 2013 was 1.9% – a vast improvement over 0.3% seen in 2012. At this rate UK plc may be able to claw itself back up to the size it was before the crisis – just in time for the May 2015 general election. So is this all good news? Well maybe for London and the UK as a whole but maybe not so for small businesses and provincial towns.

Firstly, the Bank of England has kept it’s base interest rate down to 0.5% for the last 5 years but might not do so for much longer. Business loans and mortgage rates may become expensive which is bad news for small businesses and consumers.

Markets are a good indicator of a local economy what is still glaringly apparent is the contrast between London (‘Recession- what recession?’) and the economy in the rest of the country.

Secondly, the vast majority of economic growth has been in London and the South East. Given that Markets are a good indicator of a local economy what is still glaringly apparent is the contrast between London (‘Recession- what recession?’) and the economy in the rest of the country. Anyone staring at empty stalls and boarded-up shops along the High Street in Mudford-on-Sea is bound to consider throwing in the towel and heading for the bright lights. Some economists have even suggested the economy is now so ‘Metrocentric’ that anything outside the South East is almost ignored by a Parliament which sits in London.

OK – Birmingham, Manchester Liverpool and Leeds may show ‘green shoots of recovery’ but what about the medium to small towns outside the metropolitan areas? A recent report: ‘Cities Outlook 2014’ prepared by research organisation ‘Centre for Cities’ suggests London is sucking in provincial talent and ideas faster than ever. You can download a copy from www.centreforcities.org. As a result the London residential property market is rocketing and has become unaffordable for first-time buyers whilst perfectly good £70k terraced homes in the provinces stand empty. The decision by Bank of England Governor, Mark Carney to withdraw mortgage support for first-time buyers may stop the London housing market from overheating but does nothing for Mudford.

This is not good news for (A) Londoners faced with a sky-high cost of living and accommodation and (B) the rest of the country emptied of talent and investment. The report contains some startling figures about so-called internal immigration into London, let alone external immigration into London from the rest of the EU. The House of Commons Public Accounts Committee also pointed out the experience of Spain that HS2-type high speed rail accelerates the problem.

A lady stallholder in Mudford has suggested a solution. She proposes a return to ‘government by itineration’ i.e. Parliament travels the country and sits in the provinces for six months of the year, rather like the Monarch did in the Middle Ages. A couple of weeks in Mudford would be welcomed by her and other local businesses – even more so if the £80 billion HS2 budget was diverted to improving infrastructure within the town, not leading out of it.

Despite the vitality of London one of the saddest sights you’ll still see are the ‘skipdivers’ who appear at closing time, scavenging for unsold stock. Unfortunately it’s still a common sight so it was interesting to see the CPS do a U-turn on an intended prosecution last month.

North London squat-dwellers Paul May, Jason Chan and William James were arrested after rummaging through the bins at the back of an Iceland foodstore in Kentish Town, North London. The Crown Prosecution Service intended to prosecute them under the 1824 Vagrancy Act but the Iceland Chief Executive swiftly stepped-in and asked for the case to be dropped because ‘the Company had not sought a prosecution’.

This quick-thinking avoided awkward publicity about why so much food was being skipped and a potential PR train crash for Iceland. But it also left unanswered some interesting legal issues, e.g. are you ‘stealing’ something when it ‘s already been dumped as waste? A successful prosecution would have been bad news for Private Investigators who specialise in juicy scandals scavenged from household bin bags.

A staggering six million tonnes (£10 billion!) of food is still binned by consumers every year because it is ‘out of date’.

The case also highlighted how UK food retailers and consumers remain amazingly wasteful. Some foodstores do donate unsellable short shelf-life products to food banks and homeless charities but a staggering six million tonnes (£10 billion!) of food is still binned by consumers every year because it is ‘out of date’. Shoppers don’t understand the difference between the statutory ‘Use-by’ date and the retailers ‘Sell-by’ or ‘Best-until’ dates. Unsellable short-dated stock gets skipped by retailers so into the Iceland bins went £33-worth of mushrooms, tomatoes, cheese and Mr Kipling cakes, only to be snaffled by Paul, Jason and Bill.

Given that it was intended for landfill you can’t help sympathising with them, but it wasn’t terribly bright to scale a wall near a Police station at midnight and trespass on private property. That’s a bit different to skipdiving through the bins on Mudford Market.

Paul May said he was anything but ashamed at sharing discarded food with his housemates. ‘It’s more morally questionable they throw away usable food than how people recover it’ he said. ‘In some ways I’m proud of what we do.’ Recovering food from skips allows him and his ‘Freegan’ chums to eat more healthily than buying food on a low income and they regularly recover large quantities of frozen chicken breasts and the like. The previous week they’d even enjoyed a luxurious quail supper.

A spokesperson for the CPS said ‘We have paid particular regard to the seriousness of the alleged offence and the level of harm done. Both of these factors weigh against a prosecution. Additionally, further representations received today from Iceland Foods have affected our assessment of the public interest in prosecuting.’

News-Fresh and easy

The year-end announcement by Tesco of a stunning £3 billion gross profit from worldwide operations was soon followed by the announcement it is expanding it’s F&F fashion offer into the growth economies of the Middle East and Central Asia through franchise deals. They seem to have learnt from their disastrous foray into the USA with the Fresh & Easy store brand. Partnering with an established local retailer ensure stores reflect local preferences rather than imposing a ‘one-size-fits-all’ approach, as used for Fresh & Easy.

Knowing your customers and adapting your offer to suit is more important than ever if you’re selling into a non-European culture.

The Fresh & Easy format is much smaller than most American supermarkets and stores are located mainly in ‘blue collar’ neighbourhoods on the US West coast – California, Nevada and Arizona. When it was launched at the end of 2007 it planned to open up to 1,000 outlets based upon a projected break even of 2013. The site of their equally-ambitious distribution centre acquired in Southern California is bigger than Disneyland.

Fresh & Easy lost some £120 million last year and Tesco have mothballed many new openings.

But sales at the first 100 stores to open have been so poor that Fresh & Easy lost some £120 million last year and Tesco have mothballed many new openings. They seem increasingly likely to pull out of the USA altogether at a cost to themselves of some £1 billion which is affordable to the mighty T but must hurt neverthleless.

Given that the US economy is so enormous and self-reliant (only 39% of US citizens own a passport, versus 71% in the UK) there’s little appetite for new-fangled British retail methods like self-service checkouts.

Tesco have blamed poor sales on the economic recession but US analysts say that’s wrong. What they failed to appreciate was just how deeply conservative (with a small C) American shoppers are – especially in blue collar neighbourhoods. Given that the US economy is so enormous and self-reliant (only 39% of US citizens own a passport, versus 71% in the UK) there’s little appetite for new-fangled British retail methods like self-service checkouts. Shoppers have complained about portions being too small for American appetites (have you ever seen the size of a US shopping trolley?) and short expiry dates on food items.

‘I’m paying for the groceries so they need to pay for a full service checkout’ is a common complaint despite prices being up to 15% cheaper than the competition. Marketing and products seem to be aimed at more affluent shoppers than the pickup truck-driving, steak-barbequing, good old boy. As one analyst said: ‘Fresh & Easy is a format muddle. Instead of promoting berry-flavoured gourmet cheese and Spanish sparkling wines, they need to focus on the basics: essential food and grocery items at the lowest possible prices.’ Sounds like an Aldi format to me.

And talking of getting a caning…

I tend to shy away from politics but the blistering performance of UKIP in the local government elections was so remarkable I assume the coalition government is getting the message. One of the many issues to have eluded the coalition is how everyone dislikes any government which messes with their home – ‘an Englishman’s home is his Castle’ etc. As well as reneging on the pre-election commitment to abolish Inheritance Tax, HMG have now introduced ‘empty-bedroom tax’ on recipients of housing benefit who occupy Council and Association housing. How unimaginative. No-one likes new taxes but everyone does like opportunities, so why not encourage people to move back into work and use the national property stock more efficiently by incentivising them to let-out empty bedrooms? This could be administered through HMRC and the domestic rating system – and in return the pointless individual rating assessment of Market Hall stalls could be dropped.

The worst recession for 60 years.

And here’s another bright idea – in the middle of ‘the worst recession for 60 years’ why not scrap the HS2 high speed rail line and instead spend a fraction of that on high speed broadband to everywhere in the country to stimulate business development? The government is promoting HS2 to overcome the ‘North-South divide’ but experience from Spain suggests High Speed Rail simply concentrates economic growth in the capital. PS: The business plan is based on a cost of £59 billion versus revenue of £33 billion. Do you reckon you could sell that to the Manager at your Bank?

And finally, the charming story has emerged of an unnamed 73-year old lady locked into a French supermarket over New Years Eve. Apparently she was doing some last-minute shopping in the Intermarche store near Lille when she felt dizzy and retired to the Ladies loo to recover. When she emerged ten minutes later the store was deserted and ferme. She then set off the alarm which was ignored by the local gendarmerie who were enjoying a knees-up, so instead she tried to get some kip in a back office. That didn’t work so she spent the night wandering the aisles looking for bargains before being discovered none the worse for wear the following day. A spokesman for Intermarche cunningly diverted attention from several rather fundamental management failures with typical Gallic sang froid. He announced the supermarket was packed with seasonal champagne and truffles but ‘she was too polite to help herself to food or drink’.

Having made her miss the New Years Eve I hope they had the decency to donate everything needed for a slap-up birthday party.