There’s something peculiarly cynical about a political strategy that involves alienating pockets of your own core support in order to attract larger numbers of floating voters. Thus, we’re told, Conservative enthusiasm for High Speed 2 is partly based on the calculation that threats by foxhunting landowners to desert the Tory interest will provoke an uptick in the suburbs, where young mothers will feel more comfortable voting for a party that is no longer the preserve of red-faced rich men — and the recent outburst against the rail project in these pages by David Cameron’s own stepfather-in-law, Lord Astor, was manna from heaven for Downing Street pollsters.
Thus also, indiscriminate attacks on big business, the only locomotive that can haul us back to prosperity, are freely licenced because they play to the vindictive public mood. Last week’s stripping of Fred Goodwin’s knighthood combined with the dissing of his RBS successor Stephen Hester — who the City believes is making a good fist of a hellish assignment — provoked furious responses from business chiefs. A few, notably Sir Martin Sorrell of WPP arguing in the Sunday Telegraph that ‘business-bashing’ will drive vital investment abroad, were brave enough to go public. But many more were letting rip in private.
One household-name entrepreneur rang me unprompted to unleash a rant about the utter failure of Cameron and Osborne to empathise with the challenges facing firms like his, which are still providing jobs and paying taxes and flying the flag despite dreadful market conditions: ‘It’s the constant negativity of tone that’s so bloody depressing.’ And I hear of a clubland dinner of corporate grands fromages, CBI president Sir Roger Carr among them, on the evening of Goodwin’s humiliation, at which there was thumping of the table and repetition of the refrain that if top footballers can earn £50,000 a week, behave horribly and enjoy the adulation of the crowd, why do top executives have to endure nothing but government-sponsored vilification and scorn?
Well, that is a bit unfair, though most top executives are not in the public eye and enjoy the admiration of their peers as well as comfortingly fat wads. The issue is one of misallocation of rewards, as between executives and shareholders and between executives who are high-performing, mediocre or useless. It is predominantly an issue for the financial sector, hence the need to strongarm Hester into setting a self-denying example; but it’s also true that some bankers (Bob Diamond of Barclays for one) deserve bigger rewards than others. It is not a matter of the corruption or failure of shareholder capitalism as a whole, though that is the Milibandian tune which Cameron, Osborne and Cable (who really believes it) have lately chosen to play. It’s time to redress the balance and start cheerleading for business.
The spin-out sector
Accordingly, this column will continue to scourge the overpaid banker and celebrate the under-appreciated entrepreneur. My search for promising new businesses turned this week to the university ‘spin-out’. This mechanism, pioneered by Imperial College London, marries venture capital with investment in kind by the universities, with the aim of using the proceeds of eventual sale or flotation to fund the next wave of brilliant ideas. It is the best hope for survival for British science, and the best way of encouraging scientists not to move to California. Three readers’ nominations caught my eye.
Phagenesis is a spin-out from Manchester University offering a device to treat dysphagia — the inability to swallow which often follows a stroke or accompanies diseases such as Parkinson’s. Dysphagic patients are conventionally tube-fed in hospital; but this product directs electrical impulses to control centres in the brain, stimulating ‘rapid and long-lasting improvements’ in swallowing function that, among other benefits, allow them to go home sooner. Oxtex, from Oxford University, is another medical spin-out that manufactures ‘self-inflating tissue expanders’ for use in reconstructive surgery and dentistry: its products can be used for scar repair, correction of congenital deformities and even (here’s a growth market) ‘removal of unwanted tattoos’. Third, LumeJet from Warwick has developed photonic imaging technology — printing that uses light instead of ink. Applications range from packaging and printed electronic circuitry to the production of high-quality, short-run books, again a growing niche.
The pitfalls between perfecting an idea in the lab and bringing a product to market are formidable; scientific competition is global, and better funded elsewhere. But these are the kind of ventures to watch, because they carry the promise of a different economic future. The entrepreneur-scientists behind them deserve unequivocal support from ministers, as well as public respect and rich rewards for success. Keep the nominations coming, to firstname.lastname@example.org.
On the day King George VI’s death was announced, the Lutine Bell was rung at Lloyd’s — once for bad news, as for the loss of a ship — and the Stock Exchange closed at noon. The tone of the markets was firm for the rest of the week, buoyed by improvements in export earnings and company profits, but as the FT reported, ‘the somewhat cold-blooded business of investment commanded a rather less keen attention than is normal’. Reminding us how much has changed over 60 years, an issue of loan stock for Southern Rhodesia was heavily over-subscribed, and F.W. Woolworth & Co announced excellent trading results. And the shareholders of Barclays Bank stood in silent tribute to the late king at their annual general meeting, took the report and accounts as read, and voted themselves a handsome final dividend. But they did not have the temerity to ask their chairman, A.W. Tuke, whether he would be accepting a bonus. If he did, it was probably a small box of crystallised fruits.