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Simon English: Why did these chief executives call for their own customers to be impoverished?

Simon English
Thursday 05 January 2012 01:00 GMT
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Outlook For a cautious, perhaps even somewhat shy man, Simon Wolfson was unusually forthright. Certain in fact. George Osborne's deficit reduction programme was vital. It would "improve business and consumer confidence" said a letter to The Daily Telegraph, signed by Wolfson and 34 other business leaders back in October 2010.

"The private sector should be more than capable of generating additional jobs to replace those lost in the public sector," the letter continued. Full speed ahead.

A result in yesterday: sales at Next, where Wolfson is chief executive, are down 7 per cent by some measures. Meanwhile unemployment soars and the deficit is getting wider rather than narrowing. Growth is as near zero as makes no difference, which exacerbates both problems.

Next is still a tremendously profitable business and by all accounts Wolfson – that's Baron Wolfson of Aspley Guise to you (his Dad is also a Conservative life peer, by complete coincidence, and was also once chairman of Next, ditto) – is a highly skilled retailer.

Perhaps he should stick to it. He's allowed to have political views and to donate to a political party (he has and does), but it's not clear why bosses of public companies should feel the need to define the nation's economic policy.

It might be worth having a quick look at the fate of some of the other signatories to this infamous letter. Ben Gordon of Mothercare had to quit after a series of profit warnings. Gerald Corbett of Britvic oversaw a profits warning and a shares slump. Bob Wigley at Yell Group has seen sales tumble at a business struggling for its future. And Charles Dunstone of Carphone Warehouse had to abandon his joint venture with Best Buy due to appalling consumer confidence.

The boards and shareholders of these companies might be asking why their chairmen and chief executives were speaking out in favour of policies that were bound to impoverish their own customers.

Deficits come and deficits go, even this one will eventually. In the meantime, what companies like Next need is as many people as possible in full-time employment.

By natural inclination, most top executives are Tories, on the assumption that the party is better for business. It's not always obvious that this is so. The Conservative Party can be guaranteed to bend over backwards for the City (New Labour did too) but that's not necessarily the same thing.

Perhaps it is time for the 35 business leaders to resend their old letter and make adjustments for the events since it was first penned.

And perhaps the chief executive starter kit – all new recruits get handed one – needs an addition to the usual list of instructions. Don't diddle your expenses. Or your secretary if you can possibly help it. And stay away from macroeconomics. It's not what we pay you for.

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