Business rides to the rescue
TO praise business in a week when Sir Philip Green’s Arcadia group has collapsed around his ears with a shortfall in its pension fund might seem a little quixotic. Particularly when, a day after the Topshop owner went to the wall, Debenhams followed suit amid a row over a period it spent in private equity ownership that left damaging long-term scars.
It’s easy to believe – and plenty of people do – that everyone at the top of business is a greedy, self-seeking egotist. Many of them are. But there is more to business than Philip Green and the private equity sharks.
It is terrible to see the damage Covid has wrought on hospitality and retail, including some solid firms. But many of those going under are victims of their over-indebtedness and bad management, not the virus.
And the downfall of Arcadia and Debs came in a week when the UK approved the first vaccine – a triumph for science, but also for business, which supplied the financial support to develop the jab.
This vaccine has the potential to pull us out of our financial funk by changing the psychology. Now there is an end in sight, it should restore confidence to spend and invest the wall of cash sitting in individual savings accounts and in company coffers, waiting to be unleashed.
That money could deliver a huge boost to the recovery – but it all depends on confidence, which has been in short supply.
One major reason for that is the huge deficit of competence. The Johnson government, with the exception of Rishi Sunak, the Chancellor, is one of the least competent in memory. Ministers have bodged virtually everything it is possible to foul up, from test and trace to the shifting kaleidoscope of lockdown rules. In that environment, most are reluctant to take on risk.
Competence is an under-rated virtue. My grandmother would say ‘She’s a competent girl’ to describe plain young women in a tone suggesting it was poor compensation. But without competence, there can be no trust.
Fortunately, regardless of the antics of Sir Philip and the private equity brigade, business leaders and entrepreneurs are on the whole more competent than politicians.
We owe the vaccine, not to the ministers who were so keen to take credit, but to two companies: Pfizer, the US pharmaceutical giant, and the German firm BioNTech.
The married couple at BioNTech who are behind the development of the vaccine are billionaires – but unlike Sir Philip Green, no one minds. They spend every waking hour in the lab, not on a superyacht, and they are serving humanity rather than themselves.
The pandemic has also turned attention on the unsung achievements of British pharmaceutical firms AstraZeneca and GSK, which are also working on vaccines.
The big grocers come in for all sorts of flak, but in the pandemic they achieved miracles in making their premises Covidsafe, keeping the shelves full and putting food on the nation’s tables. This week, supermarkets did the right thing by repaying £2bn of business rates relief. It was perhaps a little late, but is still a fantastic example to firms given state support that can afford to reimburse the Government.
ENTREPRENEURS and business leaders are the people who will really lead us out of the health and financial crisis. The best thing the Government can do is give help where it can and lay off the tax increases.
Instead, ministers should offer short-term incentives to invest in plant, equipment, skills and training. That would prevent scarring from the plunge in business investment, which the Bank of england says could fall by nearly 19pc this year, or £40billion.
The best hope is that businesses use Covid as a catalyst for change, to boost innovation and digital skills. That would improve our lamentable productivity.
Business is up to the challenge, as long as politicians don’t muck it up.