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.

PROMOTED VIDEO
News
video
Life and Style
tech
Arts and Entertainment
Up my street: The residents of the elegant Moray Place in Edinburgh's Georgian New Town
tvBBC's The Secret History of Our Streets reveals a fascinating window into Britain's past
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
film
Extras
indybest
News
Albus Dumbledore, the headmaster of Hogwarts School of Witchcraft and Wizardry has been the teaching profession's favourite teacher
education
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Luis Suarez looks towards the crowd during the 2-1 victory over England
sport
Life and Style
Cheesecake frozen yoghurt by Constance and Mathilde Lorenzi
food + drinkThink outside the cool box for this summer’s frozen treats
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Sport
Sir Bradley Wiggins removes his silver medal after the podium ceremony for the men’s 4,000m team pursuit in Glasgow yesterday
Commonwealth games Disappointment for Sir Bradley in team pursuit final as England are forced to settle for silver
Sport
Alistair Brownlee (right) celebrates with his gold medal after winning the men’s triathlon alongside brother Jonny (left), who got silver
England's Jodie Stimpson won the women’s triathlon in the morning
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Junior Research Analyst - Recruitment Resourcer

£18000 - £20000 per annum + OTE £25K: SThree: SThree Group has been well estab...

Senior Analyst - Financial Modelling

competitive: Progressive Recruitment: This really is a fantastic chance to joi...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

Day In a Page

Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform