Wednesday 31 December 2008

2008: a year to forget?

If nothing else, 2008 confirmed that the North East continues to lead the world. Northern Rock proved to be to bank failures what the Stockton & Darlington Railway was to transport. So much for those who sneered that this was what happened if you let people try to run a bank from the Regent Centre rather than Lombard Street or Canary Wharf.

It was also a year that demonstrated the total uselessness of forecasters. Twelve months ago the derided Bottler Brown was heading for disaster as the Tories coasted to an easy landslide victory. Now he is implausibly repackaged as SuperGord, saviour of the planet. People have even started saying that maybe Mike Ashley is not so bad after all. It’s strange how abject terror can affect our reasoning.

Although 2008 may seem like a year to forget, it has all the makings of “the good old days” if the relentless scaremongering about the cliff we are about to fall off proves even partially correct. For me, financially, it was the worst year I have experienced since 1987. It was also the happiest of my life to date. The best advice for these times is surely to remember that money isn’t everything.

Originally published in The Journal, Newcastle upon Tyne.

Tuesday 30 December 2008

One small reason to be cheerful in 2009

I can hardly type this column because my hands are trembling with excitement at the prospect of reading Gordon Brown’s New Year message.

Luckily most of it has already been leaked, and we are told that it will contain a stirring invocation of the spirit of World War Two. We are all going to be urged to pull together to defeat the current economic challenge to our survival, just as we successfully overcame the Panzers, U-boats and kamikaze pilots of 1939-45.

The good news is that we can apparently do this simply by giving regular outings to our credit cards, which only requires the courage to ignore those bishops fretting about the morality of debt. This seems an altogether less unpleasant sort of war than crouching in a fetid trench under shellfire clutching a rifle. Or more likely, in my case, a white flag.

The bigger challenge is visualising Mr Brown as an inspirational war leader. Churchill might have been a depressive, but he had a ready wit and the capacity to raise the spirits of the nation through his rhetoric. Gordon just seems to reside under a permanent black cloud of Calvinist gloom. Small wonder that he is so eager to ally himself with the new US President in his proposed “global coalition for change”.

The snag with trying to pull this particular stunt is that Brown, unlike Obama, is far from new. He has effectively been in charge of British domestic policy since 1997 and one cannot help feeling that, if he is so keen on change, he should have done rather more about it before now. If he aspired to be a Churchillian saviour in our darkest hour, he should also have spent the last few years in the political wilderness, issuing dire warnings that things were about to go horribly wrong, not in power constantly boasting that he had abolished boom and bust for good.

While it would no doubt add immeasurably to our limited gaiety if the Prime Minister started chain-smoking large cigars and drinking life-endangering quantities of champagne, whisky and brandy, I fear that one key difference will remain: Churchill made V-signs at the people to cheer them up, while with Gordon it is precisely the other way around.

Luckily I care less and less about Gloomy Gordon as I focus on my own prospects in 2009. Because, if all according goes to plan, I shall become a father for the first time in the early summer, at the advanced age of 55. Yes, I know that nothing is more boring than other people’s children. But just imagine my delight as I emerged beaming from the hospital on Christmas Eve clutching our successful scan results, with my fiancĂ©e’s words that “this is the only Christmas present I wanted” ringing in my ears. Though she was, as it turned out, rather less than impressed when I took all the others back to the shops and demanded refunds.

But enough about me. Gordon’s the thing, and how he is going to get us out of this mess which arose in the economy, when he was in charge of the economy, but is miraculously nothing at all to do with him. For the sake of my unborn child, I hope he proves me wrong and leads us to another improbable British victory. I also trust that we will then show our appreciation for his efforts at the next general election, just as we did to Churchill in 1945. Though we went on to vote Winston back in again when he was 76, an age which Gordon will reach in 2027. Just when the babies born in 2009 get the vote, have no memories of the great economic crisis of the Noughties and are minded to rebel against their parents. It might be worth a modest bet.

Originally published in The Journal, Newcastle upon Tyne.

Tuesday 23 December 2008

Remembering when things were made in England

As a boy I was taught to look for the words “Made in England” on anything I bought, as a reliable hallmark of quality.

My personal favourites were Hornby trains and Dinky cars, always die-stamped on their underside “Made in England by Meccano Limited”, usually with the addition of the mysterious words “Patent Pending”. Until I was about 25 I assumed that this was the name of a particularly prolific Irish toy designer.

In those distant days “Made in Japan” was synonymous not with the most advanced electronic goods but with cheapjack rubbish, maybe just a step or two up from “Empire Made”, the preferred euphemism for Hong Kong.

The only memorable exception to the rule came when my father, who sold drawing office stationery for a living, advised me that “Made in Germany” actually stood for the very best in pens and precision instruments. I thought this showed a commendable and entirely unexpected spirit of forgiveness, in the light of the unfortunate misunderstanding that had led to him being used for target practice across North West Europe a few years earlier.

Having picked up the habit at an early age, I still check the labels of everything I buy for its country of origin, but I cannot remember when I last encountered “Made in England” on anything non-perishable. Nowadays the chief interest in examining manufactured goods lies in spotting those rare exceptions where the almost universal “Made in China” is replaced by the name of some other low-cost economy in the Far East.

I was a keen supporter of Marks & Spencer in the days when it boasted that over 90% of its goods were British made, but the policy had to be abandoned as the public voted with their feet for newer and cheaper arrivals on the high street. Now my underpants are constructed in China or Sri Lanka, just like everyone else’s.

It also becomes ever harder to define what is actually British. In food, the familiar tractor logo may apparently be applied to imported produce that meets the required quality standard. Meanwhile globalisation has placed the ultimate beneficiaries of many “British” businesses far overseas. The supreme example of this is surely the Government’s recent sale of the plant producing our supposedly independent nuclear deterrent to a company in California; a truly astonishing development that seems to have attracted less opprobrium than the plan to sell a stake in Royal Mail to the Dutch.

The European Commission has predictably attempted to sweep away all national designations in favour of a universal “Made in EU” label. Admittedly the idea was quietly shelved in 2004, after a tsunami of protests from luxury goods producers, but on past EU form it is surely not dead, only sleeping.

So I am left wondering how, exactly, the recent precipitate fall in the pound is going to be “good news for exporters”, given the very limited evidence that we actually make anything in this country any more? Since SuperGord abolished boom and bust forever, our prosperity seems to have been based entirely on ever-rising house prices and manic consumer spending on imported goods. Oh, and our “world class” financial services sector, generating lots of lovely “invisible earnings” through what proves to have been the banking equivalent of the three card trick.

Are there really British manufacturers that have somehow survived in a state of suspended animation through the long years of cheap import mania? And are they now ready to spring back into life and take advantage of the sudden increase in Britain’s international competitiveness? Needing only some cheap and easy bank finance to fund their immediate requirements for working capital and a rapid expansion of their productive capacity. Oh dear. Back to the drawing board, then. Do remember to insist upon those top quality German instruments.

Originally published in The Journal, Newcastle upon Tyne.

Tuesday 16 December 2008

Time to take a stand against elitism

Another week, another voting scandal. Yet again people foolishly imagined they were being invited to make a democratic choice, then found that they had been conned into casting meaningless votes because only the views of the so-called experts actually counted.

In the case of Strictly Come Dancing, the internet is abuzz with suggestions that the judges might have engineered Saturday night’s debacle as their revenge on the public for backing John Sergeant in previous rounds, in defiance of their instructions.

At least there is no need to waste time dreaming up conspiracy theories in Ireland. Anyone there who believed that voters’ rejection of the Lisbon Treaty in a referendum earlier this year would kill the project stone dead, as legally it should have done, would have had to be even more stupid than the stereotypical characters in those jokes we are no longer allowed to tell.

To absolutely no-one’s astonishment, the Irish people are to be required to vote again, after some small amendments to soothe their feelings. Just as the voters of Denmark were made to reconsider after they rejected the Maastricht Treaty in 1992.

Only the Dutch and French votes against the European Constitution in 2005 caused the juggernaut to brake, and then only until its drivers had the brainwave of smuggling 99% of the Constitution into an unreadable Treaty with a different name, which would not require a second vote. Brilliant.

What else would you expect, when the founding assumption of the whole European project is that the people of the continent cannot be trusted to govern themselves?

The same cast of mind was all too evident in EU Commission Predident Barosso’s recent claim that “the people who matter in Britain” are warming towards membership of the euro. A move that should certainly become psychologically easier as the brilliant economic management of our world-saving Prime Minister and his Treasury satrap leads the pound to dive to parity with the euro, and quite possibly below.

The person who matters most in Britain today, Lord Mandelson, is certainly a long-term enthusiast for the euro. As for Gordon Brown, it has never been clear whether he is a genuine sceptic or was simply determined to obstruct Tony Blair’s strange desire to go to down in history as the man who abolished the pound and, with it, our last vestiges of national independence: a sort of counter-Churchill.

The reckoning is that mounting panic about the economy will make the voters of Ireland more compliant next year, and there will surely never be a better time to ask the British electorate to sign themselves over to Brussels than when millions of us are staring personal financial ruin in the face. Always assuming that a convenient loophole cannot be found that would permit euro membership without a referendum: making it a general election issue, perhaps?

From unitary councils to the naming of Blue Peter cats, the will of the people counts for nothing. Is there anyone out there who believes that they will be able to drive into Manchester in ten years’ time without paying some sort of congestion charge, despite the overwhelming vote against one last week? It is as likely as John Sergeant winning a beauty contest, let alone a dancing competition.

We are governed by an elite that treats our views with contempt, even as they insult our intelligence by preaching against elitism. Understandably, we return the compliment by increasingly tuning out of politics and ignoring elections. Just remember that this gives them an even freer hand. Their reckoning is that the most we will do is grumble in the columns of our newspapers or in our smokeless pubs. Perhaps they are right, but I long for the day when we have the courage to stand up to them en masse and declare that we have had enough.

Originally published in The Journal, Newcastle upon Tyne.

Tuesday 9 December 2008

The ever-expanding universe of junk

I never expected to leave my home of the last 20 years, except in a wooden box, and it may yet come to that. Suicide begins to seem quite a painless option compared with the Herculean task of sorting through a lifetime’s accumulated possessions before moving.

There are essentially two sorts of people: hoarders and chuckers. My parents comprised one of each and I took after my mother, the hoarder. She was the sort of person who carefully folded the Christmas wrapping paper for re-use next year, and kept tins full of odd buttons and short pieces of string, convinced that they would come in handy.

As luck would have it, I moved into my current house just as she was moving out of hers, so all the accumulated junk that my chucker brother failed to divert to the tip ended up here. Complementing my own world class collection, which has been expanding at a slightly faster rate than the universe ever since. When I started to run out of space I expanded the house with a couple of attic conversions, then bought the old smithy next door.

All to make room for a vast agglomeration of old clothes, toys, essays, letters, postcards, theatre programmes, magazines, unpublished novels, draft profit warnings, press cuttings, paintings, photographs, mementoes, commemorative mugs, unwatched videotapes and, above all, thousands of unread books. Believe me, I could go on.

One particular gem is a complete run of Railway Modeller from 1966 to 2007, when even I had to admit that I had no more shelf space. I have not been particularly interested in model railways since my teens, but once I take out a subscription I am very loth to cancel it.

It would not be so bad if I had the faintest hope of making a killing on the Antiques Roadshow, but I only collect things that depreciate in value. The last time I went to my friendly local dealer with some surplus books, including several first editions for which I had searched long and hard and paid quite highly, they offered me £20 for the lot, and I think that was mainly because they quite fancied the box I had put them in. Suggestions that they might have got their decimal point in the wrong place were greeted with mild hilarity.

The temptation to dig my heels in and make my wife-to-be live here is almost overwhelming, but for the fact that she could not bring more than a change of underwear with her unless I clear some of this stuff out. Added to which, it seems a bit unfair to ask a sociable career woman to relocate to the middle of nowhere.

Objectively, I can see that it would do me good to move. In fact, I suspect that it would do most people good to move, and do not quite understand why the Government is bending over backwards to prevent this happening through the normal process of mortgage repossessions. It is doubtless frightfully hard luck on anyone who was seduced into the property market for the first time in the last couple of years of the bubble, but they were presumably adults who read the statutory warnings before signing on the dotted line.

Surely the only way that the housing market is ever going to stabilise at a realistic level is if those who have bought properties they cannot afford vacate them and allow them to be re-sold at more sensible prices?

Though there may be a simple way to avoid this harsh and cruel fate: reclassify your house as a business, since these regularly seem to go bust only to be bought back by the original owners for a token sum, minus their inconvenient debts. I shall take a lead by registering mine as a junk shop.

Originally published in The Journal, Newcastle upon Tyne.

Wednesday 3 December 2008

Failed marriages I have known

The recent demise of MFI reminded me of my own tiny role in one long-forgotten episode in its corporate history: its doomed merger with a well-known supermarket chain.

The only tangible benefit of this short-lived mid-1980s alliance was that it spawned a half decent joke: “I don’t know about this Asda-MFI merger. I bought a chicken yesterday and, as soon as I got it home, its legs dropped off.”

My contribution was to be summoned to a leading merchant bank with my chairman one Sunday afternoon, where we found the happy newly-weds toasting each other with champagne, and started trying to construct a plausible story about the benefits of the get-together. It swiftly became apparent that none of the principals could help us, as they referred all our enquiries to the guru who had come up with the idea. He in turn told us, with disarming honesty, how much money his firm was making out of the deal.

Nevertheless, as dedicated professionals, we worked hard to come up with a plausible explanation and to coach our clients in it. How well this had worked was brought home to us when their response to the first question at the following morning’s press conference was “Well, it’s obvious, isn’t it?”

That was not the most unsuccessful merger in which I have been involved. The following year the proposed get-together of the textile companies Dawson International and Coats Patons fell apart before it could be consummated, after an even more disastrous press launch.

In fact, I cannot think of a single successful corporate marriage I have helped to publicise. Certainly not the 2000 merger of Iceland and Booker, which created the ill-fated Big Food Group, though Iceland itself has gone from strength to strength since obtaining a divorce in 2005.

Some would argue that the whole concept of a merger is flawed; the outcome is always a takeover by one party. Sadly most takeovers also fail to deliver the value expected from them, and even in the most successful instances one can usually argue that the same result would have been achieved, perhaps more slowly but with less grief, through organic growth.

But if everyone accepted that, how would bankers, brokers, lawyers and even PR men ever earn another bonus?

Keith Hann is a financial PR consultant with his own wedding to pay for, generating a wholly unaccustomed appetite for work.

Originally published in The Journal, Newcastle upon Tyne.

Tuesday 2 December 2008

Another bubble of crazy hyperinflation

At the weekend I was reminded of a very uncomfortable truth for a man about to embark on the great adventure of matrimony: I simply loathe weddings.

Not the service itself, I hasten to add, which I found joyous and uplifting. Surely no-one could fail to a warm to a couple who chose “He would valiant be 'gainst all disaster” as their opening hymn, and made its singing all the more enjoyable by hiring the local brass band to accompany it.

No, what gets me down is the apparently endless palaver after the important bit is over. In my adult lifetime, weddings in this country have been subject to the same sort of crazy hyperinflation as house prices, with similarly deleterious effects.

It was all right when my contemporaries started getting married in the 1970s. We all dressed up, the happy couple got hitched in her local church, we had a decent lunch at a nearby hotel, they cleared off on their honeymoon to a respectable seaside boarding house and everyone else went home. Job done.

Then someone – could it by any chance have been a hotelier? – decided that no wedding was complete without an evening party in addition to the afternoon reception. Why? I had never actually attended such an event until Saturday, as my reaction to most recent wedding invitations has been to despatch a generous present and a half plausible story about a vital prior engagement. I see no reason to regret this.

There has been a similar bizarre inflation of expectations regarding those hideous affairs known as stag and hen nights. I am happy to say that I have never actually been on one, but I have had quite enough encounters with spectacularly drunken participants to know what they involve. What astonished me during my City career was observing the way in which they gradually expanded from single nights of life-endangering binge drinking to “stag weekends” enlivened by assorted dangerous sports, and in some cases even “stag weeks”. What next?

At the other end of the process, a few nights in Scarborough apparently no longer pass muster as a middle class honeymoon; it has to be a big game safari or a tropical island, and preferably both.

Can it be a pure coincidence that, as weddings have become ever more elaborate and expensive, marriages have grown progressively less likely to endure? Nearly all my friends who married 25 to 30 years ago are still together. Yet I know one bitter father who, not so long ago, invested almost £50,000 in his daughter’s dream wedding only to have her back on his hands as a divorcee within two years. He spent many sleepless nights scouring the small print, but could not find the hoped-for money-back guarantee.

Perhaps, in the olden days, people gave more thought to the important question of whether they had actually found the person they wanted to spend the rest of their life with, and less to holding a colossal party that capped the excesses of their friends.

I am absolutely sure that I have finally found the right woman, but I could tell that it did not go down a storm when I turned away from the spectacle of Saturday’s bride and groom finally taking their first dance to the flashes of countless cameras, and suggested that we did not need any of this. Indeed, her practical response to my bright idea of elopement was to point out that I had signed a contract committing me to pay an 80% cancellation charge whether we went ahead with the reception or not.

Comprehensively outwitted again, and we have not even got to the altar yet. I sense a pattern emerging. Clearly the only way forward is to keep telling myself, as they almost say in those cosmetic ads, “because she’s worth it.”

Originally published in The Journal, Newcastle upon Tyne.