Get set for a turbulent few days as America’s politicians prove that they can be every bit as childish as some of ours. The possibility of the government there shutting down is real, and even the prospect of its military going unpaid, not to mention the stuffing being knocked out of a recovery that was just picking up steam, may not be enough to get a deal done in Congress.
The UK economy would also be very badly served by an extended American imbroglio, which is a shame, given it too has been showing signs of life.
Some City commentators are even starting to whisper about a “sustained period of growth”. The trouble is it’s very patchy.
Research suggests that London leasing activity has now clawed its way back to pre-financial crisis levels. But read that again: London leasing activity.
There are two problems with the UK recovery as it stands. The first, as I’ve written before, is that it isn’t yet translating into higher living standards.
Problem number two is that it is strikingly uneven. London is doing just fine, thank you very much. The City has flotations to deal with, people are renting office space again, money’s washing around the system.
You can see this in action at lunchtime in Canary Wharf. The bars and the restaurants are heaving... Carluccio’s, handily situated between the big banks and the Tube, never used to take bookings. It is doing so now to cope with demand.
Outside of London, however, the picture is more murky. The Conservatives may like to reflect on that as they gather north of Watford Gap where they are becoming an endangered species.
Measures such as forcing voluntary work upon the long-term unemployed might get retired colonels from the shires clapping their hands, while MPs try to defend the private companies they’re paying to do a questionable job of getting people into work.
But in reality the quickest way to get the “beneficiaries” of these policies into long-term employment might be providing them with bus fares south. If only there were places for them to live.
The problem facing large parts of the North is that there aren’t enough jobs for people who want them. A party that addressed this would likely reap more tangible rewards than it will get from playing to its own gallery.
America’s business players score over us
The NFL’s British invasion is a remarkable business story with lessons that ought to be pondered on this side of the pond.
Its product could have been a tough sell into a market dominated by football played with a round ball. American Football takes effort to appreciate (although not as much as its detractors claim) and jumpers for goalposts it ain’t. You need expensive equipment if you want to play.
So Channel Four initially screened it as something of a novelty to fill its Sunday night schedule, but the game found a serious following and the league scented an opportunity.
It struck, scheduling exhibition games in London. But fans felt short-changed. So it tried a developmental league whose games would at least be competitive. Again, fans said no (except in Germany). So it took the controversial step of coaxing teams to come and play proper games here. To which Britons have flocked.
It has also maximised the opportunity offered by Sky, while keeping its crown jewel (the Super Bowl) free-to-air.
Now bringing a team here at some point is being seriously considered. The logistics appear extraordinarily challenging. But who’d bet against the NFL finding a way?
Therein lies the rub. The league’s vision is global. It has succeeded against the odds by trying things out, and then trying again when they haven’t worked.
Compare its persistence and willingness to learn with the recent retreats from the US of UK blue chips with apparently much easier products to sell, such as Tesco and Vodafone. Of course there were reasons for both, and I’m over-simplifying a little. US businesses also have a big advantage internationalising because if you’ve conquered the biggest market in the world others are easy by comparison.
All the same, if you compare the NFL’s dogged determination to plant its flag here with the flailing efforts of some UK firms over there, it’s easy to see why the US so often wins the Superbowl of business while the UK sits on the sidelines.
Cable’s persistence pays off for shareholders
From this morning companies will for the first time be subject to a legally binding vote on pay policies. Only once every three years, it’s true. Nonetheless this is significant. Shareholders will finally have the power to demand change, as opposed to simply registering protests through the current advisory votes on remuneration reports.
Elements in the City were bitterly opposed when Business Secretary Vince Cable decided to act, faced with growing public anger over packages that were (and are) becoming increasingly ridiculous at a time of economic hardship when few companies have done much for investors.
He pressed on, and now it’s over to the investment community, which does very well out of managing the savings and pensions of millions of Britons. But those institutions have only recently (and after great pressure) started to use their existing powers, let alone new ones, to protect clients’ interests.
And you only need to read one of Pirc’s newsletters to see that abuse is still rife, as myopic remuneration committees pass ever-greater sums over to venal executives. Mr Cable has handed institutions the power to call a halt, in the interests of those who pay their wages. Let’s see if they rise to the challenge, but Mr Cable may need to intervene again.
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