Margareta Pagano: An ethical economy? Now, what says Cameron?
Ed Miliband and David Cameron both want a 'big' society. But at the moment, the PM is trying to work out how to get UK plc to spend its £50bn cash pile
Sunday 02 October 2011
Ed Miliband's speech to Labour's conference on how we need a more just society for all must have given David Cameron a real headache.
It's hard to see how the Prime Minister will come up with a better message when he makes his speech at the Conservative conference.
I can't believe that privately he disagrees with much of what Miliband had to say, certainly not about how those at the top have a responsibility for those at the bottom. Ed's language may have been a bit more shrill, viz his "strippers" and "grafters", but look at some of Cameron's previous references to the Big Society, and you'll see how many similarities there are between them on the topics of social justice, how we should take greater responsibility for one another and on the role of community.
Ed's speech was cleverly crafted: he has put the moral argument for good business back at the top of the agenda – although you wouldn't have known it from the outrageously partisan reports of the speech. It certainly wasn't the "anti-business" diatribe that the spinners – no doubt helped by David Miliband, Ed's brother, and other Blairite malcontents – were trying to push. Read the speech again and you'll see that the idea Ed is taking the party to the extreme left is fiction.
What Miliband did, without mentioning either the words socialism or capitalism, was to talk of a new "reckoning" – a new political economy in which more people share in the proceeds. He wants overpaid corporate bosses, socially useless bankers, property speculators and private-equity predators (they are predators; that's the business model) to be held to account. If you talk to the more thoughtful businessmen or entrepreneurs who are striving to build good businesses, they wouldn't disagree with that.
Miliband needs to consider more closely the role of the state in all this, particularly in relation to his idea for a tax on "bad" business, a silly idea. He must also be careful how he presents this idea since past governments (specifically, the last Labour one) were more short-termist than any asset stripper.
But, when he spoke of the big energy companies and calling a rigged market "what it is", I think he was pointing at the need for authorities such as the Competition Commission and the Office of Fair Trading to be much tougher on cartels. In this, he is spot on, and should be congratulated for keeping ethical business values an important talking point.
However, it's not just the left that rejects the status quo; there are many on the right (I could name a couple of cabinet ministers but won't) who accept that the fundamentalism of the Reagan-Thatcher free marketeers hasn't worked as was hoped; that the trickle-down effect that everybody believed would happen, hasn't. And that's why we are so desperately in need of fresh ideas.
So what can Cameron, and George Osborne, do to claim back the moral high ground? What should they be saying to provide the framework for a new political economy that resounds with the public? To be fair to Osborne, he's got the economic bit right by sticking to his guns over deficit reduction, and his fear now must be that it can't be brought down fast enough. But austerity is the easy part; what we need now is the prosperity bit, and that can come only by persuading the UK's companies, our entrepreneurs and wealthy individuals to part with their cash.
Even the most cautious estimates suggest there is up £50bn net cash on their books, the highest for years. Quite understandably, they are not spending on new workers, new plant and machinery because they are scared.
The challenge for Osborne is to help create an environment in which they are confident enough to spend. The first thing he needs to do is revisit the fascinating research carried out a few years ago by Nesta, the National Endowment for Science, Technology and the Arts, which showed that there was a "vital 6 per cent" of UK businesses that had created half of all new jobs with existing companies between 2002 and 2008.
It showed that these 11,530 companies, all of them innovative and high-growth, and employing 10 or more people, were responsible for generating 1.3 million out of the 2.4 million jobs created by established businesses in the previous three years. This is an astonishing number of jobs.
Nesta also showed that these high-growth firms were spread across sectors, and that all UK sectors contained between 4 and 10 per cent of these high-growth firms. Nesta did the research before the recession but reckons the principle remains true today and that most of these firms have survived downturns.
If this is correct, there are big implications for government policy. Perhaps the most challenging area is getting finance and bank lending directed towards these growth businesses – so this is the right time to create lots of new banks and other credit institutions, including realising the clever idea of the Monetary Policy Committee's Adam Posen for a new public bank or authority for small business, as well as a new body for securitising loans to SMEs. On the supply side, government procurement should be used to encourage innovative businesses as well as technology transfers. Research and development tax relief should be reformed and capital allowances made more generous.
A prosperous and ethically based economy is the way to achieve the Big Society for everyone – perhaps all the parties, are beginning to realise that.
Delphic pronouncements or is Oracle's Ellison really after taking a bite at HP?
The spat between Oracle's Larry Ellison and Autonomy's Mike Lynch just gets better and better. At the latest tally, it's our very own Cambridge mathematician Lynch who has got the upper hand over his US billion-dollar rival, Ellison, who accused him of lying, with this latest dig. Lynch has put out a statement which reads: "Oracle seems a little confused about the sequence of events and origins of the data it has received, something that would suggest it needs better management of, and insight, into the unstructured data on its internal systems." He adds: "We would be delighted to help."
It's a nice touch of irony: Autonomy's speciality is technology which understands unstructured information – whether text, voice or video – and based on understanding that information, it performs automatic operations using the data. In other words, Autonomy is an intelligent Big Brother sieve: it reads, analyses and works out what to do with what it finds.
About 20,000 of the world's biggest companies such as BAE Systems and Ford use the system, which dates back top Lynch's Phd thesis based on an obscure 18th century mathematician.
You can see why computer giant Hewlett-Packard is buying Autonomy, and why it is paying top dollar – around $11bn (£7bn) – for the company. You can also bet that Ellison's anger has been triggered as he knows how brilliant a deal this is for HP, albeit pricey.
Some even suggest Ellison may have helped stir much of the market unrest over the price HP was paying for Autonomy – twice what Oracle was willing to pay – that led to HP's boss, Leo Apotheker, getting the heave-ho.
By all accounts, Ellison, worth a cool $33bn, is still obsessive about his business and about beating his competitors, someone who flies decommissioned fighter jets and sails around the world for light relief.
What's he up to? Is he planning a revenge bid for HP? He's got his best friend, Mark Hurd, HP's ex-boss who left last year over sexual harassment claims, on his board so has all the ammunition he could need. Whatever the plan, the plot is ripe for a Hollywood blockbuster.
The Independent's live blog of today's Premier League action
- 1 Scottish referendum: So how about the English now being given a chance to split from England?
- 2 Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
- 3 Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
- 4 Matthew Miller: American sentenced to hard labour in North Korea 'wanted to be Snowden II'
- 5 Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
4Chan naked photos leak: Celebrity Twitter reactions to the mass breach of privacy
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Archbishop of Canterbury admits doubts about existence of God
Portuguese academic says British are 'filthy, violent and drunk'
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