Business Comment: A landslide for Labour would spell trouble - Business - News - The Independent

Business Comment: A landslide for Labour would spell trouble

It is easy to see why Tony Blair's New Labour went down rather better in Birmingham yesterday than Ian Lang's jaded brand of old Conservatism. Although the Labour leader's speech broke little new ground it was delivered with self-confidence, conviction and enough self-deprecation to hint at sincerity and mortality at the same time. In contrast, Mr Lang's peroration on regional policy a day earlier was dull stuff indeed, a speech that said nothing, went nowhere and was evidently delivered with as little relish as it was received.

There may be more interesting places to be than the British Chambers of Commerce national conference on a wet midweek day but the two performances must have left the delegates wondering which party was really more interested in capturing the business vote. The Chambers of Commerce see things differently from the big battalions of industry, where suspicions about Labour's true colours continue to run deep. Reaction at the conference yesterday to Mr Blair's vision of Labour and business could scarcely have been better. On a show of hands, delegates who thought Mr Blair would be prime minister after the next election outnumbered those who believed it would continue to be John Major by 20 to one.

On fiscal responsibility, on education and on Europe the Labour leader did not put a foot wrong. He even made the Social Chapter sound not like the bogeyman dreamt up by a reconstructed socialist but a tool to aid greater competitiveness. The big question, as Mr Blair acknowledged, is whether Labour in power can and will pursue the same policy outlined in opposition yesterday.

The answer may turn on the size of his majority. A small working majority would probably enable New Labour to deliver. Too big a landslide and old Labour could be baying for blood. Anything much above 50 would certainly spell trouble. In that case yesterday's endorsements in Birmingham could begin to look ill-placed. If even the present Conservative government is getting itself into trouble on the public finances, as next Tuesday's summer economic forecasts from the Treasury will confirm, how on earth is Mr Blair going to hold the lid on demands for ever greater government spending? As far as business is concerned, Mr Blair is making all the right noises, but despite his best endeavours he still has a credibility gap to close.

GEC is a heavy weight on Simpson's shoulders

It is just as well George Simpson is not given to worrying about other people's high expectations of him. Confirmation that he will succeed Lord Weinstock in September helped make GEC the Footsie's most heavily traded stock yesterday. Up 12p on the day to 364p, the shares anticipate quite a show.

Mr Simpson takes on one of the biggest challenges in British corporate life, to reverse a relative decline that only stranded dinosaurs such as ICI and Hanson have emulated in the past 15 years. Although GEC has outstripped the market handsomely over the full stretch of Lord Weinstock's tenure, it has done its utmost to squander the advantage throughout the 1980s and 1990s.

GEC did rather better for many years than many of the other national champions created with the blessing of Harold Wilson in the late 1960s, but ultimately it has failed when set against the likes of Siemens of Germany. The two companies were about the same size when GEC swallowed Associated Electrical and English Electric; today the British company is dwarfed by the German and it has tumbled down the league tables of the world's industrial giants.

Now is not the time to dwell on Lord Weinstock's stewardship, but if George Simpson is to effect lasting change at GEC he will have to learn lessons from a man who has been accused, with a degree of justification, of doing more damage to British industry, through errors of omission, than any other businessman.

That might seem a harsh assessment on the day GEC's profits broke through the pounds 1bn mark for the first time. With orders standing at pounds 14bn and pounds 2.5bn in the bank, many people would judge this a highly successful company. But it is hard to avoid the conclusion that less left on deposit over the years and more spent on investment might have left GEC's profits higher and British industry rather healthier.

Snatching Rover from under the nose of the Japanese and selling it on to BMW showed that Mr Simpson has some talent for selling businesses and in the short term there are plenty of peripheral operations that look ripe for that treatment. In the long run, however, GEC needs to re-learn how to build businesses by investing in them.

Having ceded effective control of its telecommunications and power arms into joint ventures with the Germans and French, GEC's future lies in Marconi and, possibly, other areas of the still fast-growing electronics industry. That will require long-term vision and a willingness to take short-term risks

With such a fat cheque book, Mr Simpson has an opportunity that comes to very few businessmen - a real chance of re-invigorating a moribund industry where Britain still has the will and expertise to succeed. Mr Simpson might make light of the task that faces him, and the hope that many are investing in him, but it is in truth a heavy weight of responsibility that is being placed on his shoulders. Let's hope he's up to it.

BA link-up may never get off the ground

British Airways' plans to set up a code- sharing arrangement with American Airlines seem rapidly to be sinking into the regulatory mire. BA was yesterday dismissing as a minor irritant the announcement from Brussels that it too will be looking into the planned get-together, but the European interest might well prove rather more serious than that.

The way BA figures it, Brussels will be hard pressed to ban its code- sharing with American because similar alliances at Lufthansa and KLM have already been sanctioned by their respective national authorities. If Brussels wanted to ban the lot, so be it. They'd all be in the same boat and BA probably wouldn't be too unhappy. But surely not even Brussels would consider blocking BA's plans while allowing others to continue.

Well actually it might. BA's link-up with American is in a different league from the ones that have gone before and involves a much larger concentration of market power. It would be easy for the Commission to turn round and say: "OK, the others just about get through, but this one doesn't." In the meantime the deal faces the prospect of an MMC investigation in the UK as well. On the other side of the Atlantic, rival American airlines insist that the open skies policy promised as a quid pro quo for allowing the link-up is pointless without stripping BA of a very substantial proportion of its London airport landing right slots. As far as BA is concerned, this is not up for negotiation.

This one looks set to run and run. Indeed, there is a real prospect of it running for so long that it will never happen at all.

Paper trail: the wedding photograph found in the rubble after 9/11 – it took Elizabeth Keefe 13 years to find the people in it
newsWho are the people in this photo? It took Elizabeth Stringer Keefe 13 years to find out
Arts and Entertainment
Evil eye: Douglas Adams in 'mad genius' pose
booksNew biography sheds light on comic genius of Douglas Adams
FootballFull debuts don't come much more stylish than those on show here
Life and Style
Kim Kardashian drawn backlash over her sexy swimsuit selfie, called 'disgusting' and 'nasty'
fashionCritics say magazine only pays attention to fashion trends among rich, white women
Arts and Entertainment
TVShows like Agents of S.H.I.E.L.D are little more than marketing tools
Arts and Entertainment
Hit the roof: hot-tub cinema east London
architectureFrom pools to football pitches, rooftop living is looking up
The ecological reconstruction of Ikrandraco avatar is shown in this illustration courtesy of Chuang Zhao. Scientists on September 11, 2014 announced the discovery of fossils in China of a type of flying reptile called a pterosaur that lived 120 millions years ago and so closely resembled those creatures from the 2009 film, Avatar that they named it after them.
Life and Style
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Matisse: The Cut-Outs exhibition attracted 562,000 visitors to the Tate Modern from April to September
Life and Style
Models walk the runway at the Tom Ford show during London Fashion Week Spring Summer 2015
fashionLondon Fashion Week 2014
Kenny G
peopleThe black actress has claimed police mistook her for a prostitute when she kissed her white husband
Life and Style
techIndian model comes with cricket scores baked in
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Training Coordinator / Resource Planner - City, London

£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week