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David Cameron has a strong business case – he should take it to the people

My Week: Whenever the Tory party faces crisis, the spirit of Margaret Thatcher is evoked

James Ashton
Saturday 02 May 2015 00:22 BST
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David Cameron addressing staff at the Asda headquarters in Leeds
David Cameron addressing staff at the Asda headquarters in Leeds

David Cameron left it late to concentrate his election campaign on the economy. The frustration among his natural supporters in the business world has boiled over into exasperation. Chief executives think he has a good story to tell about jobs and investment but has blown the narrative. Even at the televised interviews on Thursday night, it was an odd move to produce the letter left in the Treasury in 2010 for the incoming Coalition – the one that reported there was no money left. It is more negative campaigning – a reminder of what Labour did wrong, not what the Coalition did right.

Whenever the Tory party faces crisis, the spirit of Margaret Thatcher is evoked. But Mr Cameron should heed the words of Sir John Major as he enters the last few days of the campaign. Sir John’s speech last month urged the party to ditch the dry rhetoric around the “long-term economic plan” in favour of something more user-friendly. Counting how many people can afford to jet off on package holidays is to understand the link between prosperity and people. Like Sir John, Mr Cameron should get out on the streets with his soapbox to explain, eye to eye, why business-friendly can be voter-friendly too.

France is opening up – but it’s hardly Vive la Revolution

Over breakfast at the French ambassador’s residence on Thursday, Muriel Pénicaud was on a mission to overhaul perceptions. Investing in France always struck me as a lifestyle choice, not a smart business decision, but the boss of Business France, the new body created to further the country’s corporate reputation, obviously disagreed.

After three years of flatlining, the number of foreign investments creating jobs in France was up sharply last year, with 30 per cent of them in manufacturing. Some of that might be down to workplace reforms that the Hollande government has been implementing. France is no low-cost economy, but it has managed to bring down the cost of labour into line with Germany.

Ms Pénicaud said the rigid 35-hour working week doesn’t exist any more. French managers are behind their desks for 46 hours a week, among the longest in Europe, while factory staff clock off after 36 hours. Up the workers! What was interesting to hear was that 40 per cent of foreign investments made are reinvestments, the message being: try France, you might like it.

And what about protectionism? France jealously guards its strategic industries and even some non-strategic ones. In the week that Mr Cameron made it clear he would frown on a foreign takeover of oil giant BP, France’s Florange law is creating havoc among its multinational companies by introducing double voting rights for long-term shareholders. Nor does the recent instance of state-backed phone company Orange being ordered to find a European owner for video-streaming business Dailymotion – which was set to be sold to an Asian investor – send out a message of an open and transparent economy.

Times are changing, slowly. The French Government will sell off more of its regional airports after allowing a Chinese consortium to buy nearly half of Toulouse. Could that disposal programme ever include Paris Charles de Gaulle airport, given that Heathrow is owned by Spanish, Canadian and Singaporean investors? No matter how welcoming France is to foreign investment, that will never fly.

There’s no time for lunch if you’re boosting productivity

There was a variation on a theme over another breakfast, with Terry Scuoler, chief executive of the EEF manufacturers’ trade body. On his wishlist for a new government that must impose cuts is the ring-fencing of science and innovation spending. Keeping up development budgets – to take research from the lab to commercial reality – is one way of trying to crack a productivity puzzle where huge growth in the workforce has led to only marginally increased output.

The lesson from France is that high productivity appears incompatible with total workforce flexibility. Manufacturers provide a bright spot among poorly performing areas such as North Sea oil and management consultancy. Mr Scuoler brandished Office for National Statistics data showing output per hour was a fifth higher last year than in 2004, compared with a 4.4 per cent increase for the wider economy. It was no surprise, then, that we met for a quick pastry. A lingering lunch would only have dragged down his averages.

The daddy of the mad men is paid what he deserves

To grumble now about Sir Martin Sorrell’s £43m payout at WPP is to close the door when the horse has bolted on a contract agreed long ago with shareholders. Sure, Sir Martin’s pay acts as a reminder that the wealth gap in Britain yawns wider than ever. But to put some arbitrary cap on what one individual can earn is to impose a ceiling on vaulting ambition and the link between big risks and considerable rewards.

Sir Martin is among Britain’s richest as a reward for 30 years of graft turning a shell company that made shopping baskets into the world’s largest advertising group. He put his own money at stake to get there and enriched thousands of staff on the way. What critics at home forget is the impact he has internationally. Not only does his constant presence in the media, opining about global affairs, market himself and his agencies, it helps market Britain to the world.

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