Simon English: Did these CEOs want to drive off their customers?

Click to follow
The Independent Online

For a cautious, perhaps even somewhat shy man, Simon Wolfson was unusually forthright. Certain in fact. George Osborne's deficit reduction programme was vital. It would "improve business and consumer confidence" said a letter to the Daily Telegraph, signed by Lord Wolfson and 34 other business leaders back in October 2010.

"The private sector should be more than capable of generating additional jobs to replace those lost in the public sector," the letter continued. Full speed ahead.

One result in yesterday: sales at Next, where Lord Wolfson is chief executive, are down 7 per cent by some measures. Meanwhile unemployment soars and the deficit is getting wider rather than narrowing. Growth is as near zero as makes no difference, which exacerbates both problems.

Next is still a tremendously profitable business and by all accounts Lord Wolfson – or Baron Wolfson of Aspley Guise to give him his formal title (his father is also a Conservative life peer, by complete coincidence, and was also once chairman of Next, ditto) – is a highly skilled retailer.

Perhaps he should stick to it. He's allowed to have political views and to donate to a political party (he has, and does), but it's not clear why bosses of public companies should feel the need to define the nation's economic policy.

It might be worth having a quick look at the fate of some of the other signatories to this infamous letter. Ben Gordon of Mothercare had to quit after a series of profit warnings. Gerald Corbett of Britvic oversaw a profits warning and a shares slump. Bob Wigley at Yell Group has seen sales tumble at a business struggling for its future. And Charles Dunstone of Carphone Warehouse had to abandon his joint venture with Best Buy due to appalling consumer confidence.

The boards and shareholders of these companies might be asking why their chairmen and chief executives were speaking out in favour of policies that were bound to impoverish their own customers.

Deficits come and deficits go – even this one will, eventually. In the meantime, what companies like Next need is as many people as possible in full-time employment.

By inclination, most top executives are Tories, on the assumption that the party is better for business. It's not always obvious that this is so. The Conservatives can be guaranteed to bend over backwards for the City (New Labour did too) but that's not necessarily the same thing.

Perhaps it is time for the 35 business leaders to resend their old letter, making adjustments for events since it was first penned.

And perhaps the chief executive starter kit – all new recruits get handed one – needs an addendum: Stay away from macroeconomics. It's not what we pay you for.

Comments