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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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Antoine Arnault: prince of luxury

Category : Business

One family dominates global fashion – and Antoine Arnault is its scion. He’s a world-class poker player, lives with a supermodel and has just been given the Berluti brand. But whatever you do, don’t feel sorry for him…

At the end of a dinner created by triple Michelin-starred chef Yannick Alléno, served to a

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That lightbulb moment

Category : Business

Chris Riddell on David Cameron’s energy gaff… with a little help from Magritte

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Company law: root-and-branch reform is essential to the economy | the big issue

Category : Business

When it was first developed, company law helped business; now it has become a worldwide cancer

The key insight of Will Hutton – “The company has become a dysfunctional organisational construct that needs root-and-branch reform” was even more important than the headline on his piece “We need a revolution in how our companies are owned and run” (Comment).

In the 1860s, the UK parliament and courts were leaders in the early development of company law, nationally and internationally. Company law facilitated business projects which would otherwise never have been undertaken. It was unambiguously a “Good Thing”. But it has now grown to become a worldwide cancer, eating away at personal and political responsibility, at the effectiveness of taxation, the requirements of social justice and sound industrial relations.

Will Hutton is right: root-and-branch legal reform is essential, now as an international priority. New Labour embarked on such reform in 1997, but the project was crippled by political compromise and nothing of significance was achieved. Labour must try again. Tinkering with the banking system will not be enough.

Roger Warren Evans

Barrister-at-Law (retired)


With both government and private households up to their eyeballs in debt, it comes as no surprise that Will Hutton turns his attention to companies – the remaining and, for now, solvent sector of the economy. To remedy this problematic situation, Hutton envisages firms being required to have “core purposes” addressing “wider economic and social benefits” in the national interest. “Footloose” shareholders who might want to salvage their money before it is lost by companies caught up in this new state-inspired mercantilism will be given short shrift.

The remaining investors will be invited to assign their votes to “mutuals”, comprising no doubt the good and the great, who will bring appropriate pressure to bear on directors and managers – again in the wider national interest. To reinforce this responsible capitalism, bankers and trade unionists will be given seats on company boards to ensure that their particular expertise is applied in every company. In this way Hutton proposes to remedy the imbalance in the economy, rendering companies in the same state as the other two sectors.

John West



Will Hutton’s article is spot on. We seem to have ended up as the junkies of the western world where government and business leaders will do absolutely anything they can to get a short-term fix of their drug of choice – money.

British companies and institutions? Sell ‘em off quick as you can, just get the cash. Investment? Can’t think about the future, need a fix now. And the City? A modern-day rookery run by thieves and fraudsters where anything goes. The people who run this country, both governmental and business, know the price of everything but the value of nothing. If the Olympics showed us one thing, it’s that we as a nation have so much more to give the world. We should remake capitalism in our image, not the Conservative party’s, for if we don’t there’ll only be one winner – them.

Marcus Respinger

London W3

We have to agree with Will Hutton that our recent governments have not helped our industry. After the Thatcher government helped balance its budget by selling off many of our national assets, Gordon Brown finished the job by going round the world telling foreign investors to “invest in Britain”. That sounds good until it is realised that he meant “keep buying up our industries so that our import/export balance looks good”. The result is that our present government, which happens to be a coalition, is faced with the problems that Will Hutton exposed.

David Hunt

West Wickham


Behind Spain’s turmoil lies a cronyism that stifles the young and ambitious | John Carlin

Category : Business

The country needs more than a bailout. It needs a revolutionary change in its hidebound social structures

Here’s the news from Spain last week, in case anybody missed it: huge cuts in government spending; higher taxes; biting austerity; unemployment higher than in Greece; big and growing demonstrations in Madrid; violent clashes with police; and in Catalonia, a rising clamour for secession. The only hope on the horizon takes the ambiguous form of an expected financial rescue package, with still more austerity strings attached, from the richer countries of the north.

Such help, however, will offer no more than temporary relief unless Spain addresses a deeper problem that it can only sort out on its own. It’s a problem that has a decisive impact on the country’s capacity to remain a competitive global player and that will be terribly difficult to solve because it is embedded in the national DNA.

During the 14 years I’ve lived in the country, I’ve talked with many Spaniards about this. But the most forthright and revealing group has been those who work abroad – in London, Holland, Germany, the US. They all miss the sunshine, the food, the strong family bonds, the warm, easy Spanish way of living. They also share – and here is the thing – an exasperation with the Spanish way of work.

I’m thinking, say, of two young men, in their early 30s, who moved to London six years ago, before the economic crash. They’ve done well. One, who started out as a waiter, is now the operations manager of a successful restaurant chain. “To have got ahead the way I have in London I’d need an uncle with good connections. I didn’t, so I left.”

The other works in the digital video industry. He had entered some work for a prize, but a number of prestigious British companies were running against him so he had no expectation of winning. Yet win he did. On pure merit. The notion of an unconnected unknown like him winning an equivalent prize in Spain was, he said, unthinkable.

The lessons from these two stories, entirely typical of Spaniards abroad, are clear: the Spanish are not inherently idle; the labour market in Spain does not sufficiently reward talent and hard work. The Spanish disease that both these young men said they had fled was “amiguismo” –”friendism” – a system where one gets ahead by who one knows.

Reams of opinion columns in the Spanish press in recent months have pointed to amiguismo in the political classes. Which is no doubt largely true but fails to acknowledge that corrupt or lazy or incompetent politicians do not inhabit a closed ecosystem but behave in a manner in keeping with the way society operates at large.

It is true that Spain had enjoyed a sustained economic boom for the best part of two decades. The usual explanation is that the country benefited from fluid access to cheap northern European credit. But there is a little more to it than that. There are also some mightily well-run and successful Spanish companies, such as the multinational retail clothing colossus Inditex, which owns Zara, or, like it or hate it, the Banco Santander. Yet I am afraid that these are the exceptions and not the rule.

I recently asked a boss at a well-known Spanish company what percentage of the 300 or so middle-class staff under him did their jobs to the best of their abilities. Despondent, he replied: “The number is low.” The deeper sin lies in an institutionalised Spanish system where both the financial and moral incentives to work well are undercut by the perception that if you do not know the right people there is little point in giving the best of yourself at work.

Where does all this come from? It might be tempting to dwell on the peculiarly closed-minded, our-fate-is-in-God’s-hands brand of Catholicism that reigned in Spain for half a millennium but I think I’ll stick for now to the prevailing educational system. Going to school in Spain is a pretty deadly business. The emphasis is all on learning by rote. Creativity and curiosity are not part of the package. School is not, remotely, fun. Work, the idea is instilled ominously early on, cannot be much fun either.

I have a large Spanish family, with 25 first cousins on my Madrileña mother’s side alone. About 15 years ago, when the Spanish economy was buzzing, a male cousin came to visit me in Washington, where I then worked. I told him one night at a bar that I enjoyed my job. He said nothing in reply but, as I discovered two days later, he’d been mulling over what I said, deeply troubled. “What you told me the other night,” he said, “about enjoying your job… you weren’t serious, were you?”

Here was an employed, friendly, middle-class 36-year-old Spaniard and he had never, ever had wind of the notion that someone might feel enthusiasm for what he did for a living. For my cousin, as for so many Spaniards, work is a necessary evil, a nuisance to be dispensed with as briskly as possible before turning to the serious business of life – drinking, nibbling tapas, hanging out with friends until the small hours.

This is all very well, even admirable from a certain philosophical point of view. Nor did it seem to matter very much while the Spanish bubble grew. But it is dangerously infantile in the present circumstances. Now that the bubble has burst, people’s approach to work matters a great deal. The brightest, the boldest or the most restless young people go abroad for money and fulfilment; the rest, half of whom are unemployed, stay at home – baffled, desperate, increasingly angry, kicking out at government and being kicked back.

The government does carry its share of the blame. But it is a symptom – a big, glaring symptom, for sure – and not the root cause. What’s needed if Spain is not to sink gradually back into a sort of bucolic, early 20th-century Mediterranean poverty is a revolution across the board in attitudes to work. Like it or not, the system has to be overhauled and replaced by one where the rules are fair and merit is rewarded. Everywhere.

Catalonia is a much more productive region than Andalucía, as the independentists will never cease to remind you, but the difference as far as amiguismo goes is only one of degree. There is much talk now of a huge financial rescue plan from the north. Good. It will bring much-needed relief. But it will be no more than a passing cure so long as the corruption of amiguismo continues to stain Spain’s otherwise warm and delightful soul, hampering the country’s capacity to compete in the grown-up world.

Housing: the government needs to get building and start lending | the big issue

Category : Business

Ministers need to be proactive in helping out with mortgages and encouraging more public sector home projects

It is absurdly difficult to buy one’s first home, with house prices still high and with banks insisting on very large deposits unless one can afford interest rates several percentage points above base rate (“Renting to be ‘way of life’ for young UK families“, News). One part of the solution could be for the government to guarantee a proportion of poorer people’s mortgages, just as richer parents can do for their adult children with one bank’s “Lend a hand” mortgage. The borrower pays a 5% deposit, the government invests a further 20% (on which it receives interest, which will be repaid once the house has risen in value sufficiently) and the lender lends the remaining 75% at a lower rate than it would lend 95%. Of course, there will be some defaults, but unless the house has actually fallen in value in cash terms, the government will still be repaid. The small number of losses should be more than compensated for by the fact that bank deposits earn more than the government’s current cost of borrowing.

The other part of the solution is to stop house prices rising rapidly once the economy starts to recover. The government needs to reduce demand by cutting net immigration, and increase supply by giving builders confidence, by guaranteeing to buy any unsold new houses.

Richard Mountford

Hildenborough, Kent

I wonder whether housing minister Grant Shapps has the awareness to recognise the irony in what he said about the housing crisis, viz: “The housing crisis – which has been decades in the making – has led to a crunch situation in which an entire generation is boxed in.” The irony is that the present housing shortages were caused by the policies pursued by the Thatcher government in the early 1980s and those Tory councils that were led by her disciples, such as Shirley Porter.

One doesn’t need a degree in economics to realise that if the source of housing stock for those people who couldn’t afford to buy is diminished, because council houses are sold at a reduced price and the stock is not replenished, it will lead eventually to a shortage of housing, not just in the public sector, but in the private and voluntary sectors too. This shortsighted policy also caused the inevitable soaring house prices, which had such a devastating effect on the whole of the housing market.

Alongside the schemes that Shapps outlined, involving the Home Builders Federation, the Council of Mortgage Lenders and other “build now, pay later” deals, his government should restore at least some of the cuts it inflicted on public sector house building. This would be a surefire way to get the building industry moving.

Bill Shaw

Glossop, Derbyshire

So it has taken a study by Cambridge University, commissioned by the Resolution Foundation and Shelter, to discover that it is not just young, single people who are locked out of the property market and forced into the under-regulated rental sector due to rising house prices, falling real wages and banks that are unwilling to lend the percentage of the deposit demanded by them.In journalistic terms, it is stating the “bleeding obvious”.

Such is the low priority of housing in the political agenda that I registered a political party to draw attention to the situation. I stood as a candidate for the London Assembly in the London-wide top-up list. The main policy I was putting forward was that, since it is only the rich who can afford to buy somewhere to live in London, the emphasis should be on increasing both the public and private rented sector in the capital.

Yet both the government and the mayor of London, and the vested interests who try to influence their policies, keep trying to indoctrinate people that they should get on the property ladder. They don’t seem to understand that getting on the property ladder also includes renting somewhere to live and that a large section prefers to rent.

Terry McGrenera

The House Party, Homes for Londoners

London E3

Space tourism: to infinity and beyond?

Category : Business

The first tourist flight into space is scheduled for next year, and it’s cheaper than you’d think. But is this the final frontier for luxury travel, or a

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A ringside view of calamity

Category : Business

Chris Riddell on David Cameron and Angela Merkel’s reaction to Spain’s economic agony

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David Cameron’s demons are closing in

Category : Business

Chris Riddell on the prime minister’s nightmare

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Hilary Devey: ‘Politics is probably my next career move’

Category : Business

The Dragons’ Den star talks about sexism at work, being raped as a teenager and her political ambitions

You’ve written your autobiography. Your life was pretty eventful from early on, wasn’t it?

It wasn’t the usual childhood. My dad was very spontaneous: it was: “Come on kids, we’re going on holiday.” “No, Arthur, you can’t, they’re at school tomorrow.” “Sod it, they’ll learn more with me.” Or, 11 at night, “I think I’ll knock that wall down.” The following morning, we’d get up and the wall would be gone. It was a rather different childhood.

But you also reveal some extremely traumatic times, particularly being raped when you were a young adolescent. How did it feel to write about it?

It was emotionally stressful. Things I suppose that you suppress over many, many years, that are not even thought about for many, many years, actually came to the pen. I’ve never told a soul; even my family are going to get a shock when they read that.

And we get a glimpse of the embryonic dragon. You got the bug early, didn’t you?

I’ve always loved business, since being a kid. Even from working on a stall on the market. I could take dictation in shorthand and type the letter by the age of 11. It must be inbred. I love the cut and thrust of getting the deal.

You’ve had a very successful career in the freight industry and brought a son up on your own. How did you manage that?

I had to go back to work two weeks after my son was born, but those two weeks I had with him were probably the happiest of my life. But I had to feed him, clothe him, house him. I’m totally independent. It was my choice to have him. The fact that his father chose to sod off isn’t the state’s fault, is it? I was determined I would continue with a career.

You describe some traumatic times with your son, Mevlit. How are things now?

I’m very positive about my son. Very, very proud of him. He’s one in 10

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Ngozi Okonjo-Iweala:a woman to make Africa count | David Smith

Category : Business

Nigeria’s finance minister has all the experience and skill to be the next president of the World Bank. But does the bank have the courage to select its first boss from the developing world?

Ngozi Okonjo-Iweala is a Nigerian iron lady. When she was 15, she strapped her three-year-old, malaria-fevered sister to her back. “It was really hot, I was very hungry, I was scared because I knew her life depended on me getting to this woman [doctor],” Okonjo-Iweala recalled in 2007. “I walked 10 kilometres, putting one foot in front of the other.”

When she arrived, nearly a thousand people were trying to break down the door of a makeshift clinic. Okonjo-Iweala crawled between their legs and climbed through the window, just in time for the doctor to save her sister’s life. Then came the return journey. “It was the shortest walk I ever had. I was so happy that my sister was alive. Today she’s 41 years old, a mother of three and she’s a physician saving other lives.”

From those wretched days, Okonjo-Iweala rose to become Nigeria’s first female finance minister and nemesis of corruption. She has been lauded by Bono and Gordon Brown, who called her “a brilliant reformer”. Now she is an outside bet for president of the World Bank, an appointment that would be a watershed moment for Africa and the developing world.

The Economist magazine put it thus: “When economists from the World Bank visit poor countries to dispense cash and advice, they routinely tell governments to reject cronyism and fill each important job with the best candidate available. It is good advice. The World Bank should take it. In appointing its next president, the bank’s board should reject the nominee of its most influential shareholder, America, and pick Nigeria’s Ngozi Okonjo-Iweala.”

The 57-year-old is a triple threat with experience in government, in economics and finance and in development, the magazine argued, a boast that cannot be made by her rivals, Colombia’s José Antonio Ocampo, or Barack Obama’s choice, Jim Yong Kim.

Victory for the Nigerian would shatter the near 70-year duopoly of the World Bank and IMF enjoyed by America and Europe respectively. As emerging economies such as Brazil overtake Britain, it would be an acknowledgement that the global order is recalibrating. It would also be a defining moment for Africa, long under the boot of foreign powers and financial institutions, but now enjoying a renaissance with six of the world’s 10 fastest growing economies.

“The World Bank was the instrument by which structural adjustment was imposed on Africa in the 1990s,” said Richard Dowden, director of the Royal African Society. “It was the most brutal economic policy, it destroyed the livelihoods of millions of people and caused disruption and terrible insecurity.

“That an African should then become head of it would be hugely symbolic. The bank has been utterly directionless in recent years, and Okonjo-Iweala would be a great choice to change that. She’s a very bright woman, absolutely no nonsense: the bullshit factor is extremely low with her.”

Okonjo-Iweala is a workaholic who, in her little spare time, enjoys swimming and reading autobiographies and fiction by PD James, Arthur Conan Doyle and contemporary African writers such as her compatriot Chimamanda Ngozi Adichie. Born in 1954, when Nigeria was still part of the British empire, it’s been reported that she perfected her English by reading Enid Blyton, Treasure Island and Bobbsey Twins mysteries. She attended one of the best schools in the country and studied ballet and the piano in what she once described as a “magical and happy childhood”.

But the family’s life was turned upside down by the outbreak of civil war in 1967. Her father became a brigadier in the Biafran army and went to the front line. The family was forced to move from place to place, surviving on one meal a day or less. The war ended with more than a million dead, many lost to starvation.

Aged 18, Okonjo-Iweala went to the US to study economics at Harvard and the Massachusetts Institute of Technology, began working for the World Bank and married a surgeon, Ikemba. They have one daughter and three sons including a writer, Uzodinma, whose works include Beasts of No Nation.

Okonjo-Iweala looked set to be just one more great mind lost to the African diaspora. But things were changing at home. In 1999 Nigeria emerged from military dictatorship to hold civilian-run elections. The winner, Olusegun Obasanjo, asked Okonjo-Iweala to write a brief for economic reform. It persuaded him she was the woman to bring the chaotic finances to book and awaken one of Africa’s sleeping giants.

“When I became finance minister they called me Okonjo-Wahala – or ‘Trouble Woman’,” she said in a 2005 interview “It means, ‘I give you hell.’ But I don’t care what names they call me. I’m a fighter; I’m very focused on what I’m doing, and relentless in what I want to achieve, almost to a fault. If you get in my way you get kicked.”

In 2003, Nigeria was deemed the most corrupt place on earth by Transparency International. Okonjo-Iweala, whose typical working day ran from 6am to 11pm, set about slaying the dragon that costs the nation $15bn (£9.37bn) a year. Her team found that there were 5,000 more names on the civil service payroll than people turning up for work; they used biometric testing to separate the real workers from the “ghosts”.

Okonjo-Iweala declared war on the culture of kickbacks, firing officials and ministers and clamping down on the notorious letter and internet confidence trick scams by sending hundreds to jail. She made the energy sector more transparent and targeted political and military leaders who stole crude oil, making powerful enemies and potentially putting her life at risk.

She was the victim of a smear campaign that raised questions over her salary and house in Washington. There were attacks on her reputation on the internet. Her home address was published and her husband received death threats. “Fighting corruption, corruption tends to fight back,” she told the Observe.

Analysts suggest it was because she was too good at her job, and following the money too diligently, that Obasanjo got cold feet and gave her no choice but to resign. She returned to Washington, and her family, as managing director of the World Bank from 2007.

Last year she went back for a second stint as Nigerian finance minister under President Goodluck Jonathan; in fact many regard her as his prime minister in all but name. Not everything has gone smoothly, however: she slashed a $7.5bn (£4.68bn) fuel subsidy that millions of impoverished Nigerians viewed as their only benefit from the country’s oil wealth, resulting in mass protests.

Now she could return to the World Bank yet again, this time succeeding Robert Zoellick in the top job. She is clearly Africa’s choice, having received the backing of South Africa, quite a feat at a time when the continent’s biggest economy and its most populous nation are at each other’s throats over matters petty and profound.

Nigerian-born Adekeye Adebajo, executive director of the Cape Town-based Centre for Conflict Resolution, said: “It would be incredible. The anachronistic idea of American and European leadership does not reflect the current state of the world. It would be a good thing if someone from the global south were to take over.”

Okonjo-Iweala has the right credentials for the bank, Adebajo added. “She’s been an insider there as managing director and is finance minister of one of the emerging economies which is about to take over from South Africa as the biggest in Africa. She’s certainly someone of substance and would be respected.”

Tolu Ogunlesi, a Nigerian journalist and blogger, said: “I have no doubts about Ngozi Okonjo-Iweala’s brilliance, competence, and passion for Nigeria. A lot of the goodwill she has today dates back to the work she did, alongside others, to clean up Nigeria’s public sector, and clear our crushing burden of foreign debt.

“But she lost a chunk of that goodwill during the fuel subsidy protests in January. Her spirited defence of the subsidy removal – she was one of the most vocal pro-removal voices – portrayed her as an anti-people person, and there are Nigerians who will never be able to see her in another light.”

The fuel protests have planted doubts over whether Okonjo-Iweala’s political instincts match her economic judgment. But she countered last week: “You have fuel protests in the UK right now. This is what happens in every country. I don’t know why people single Nigeria out.”

No one doubts her determination to fight Africa’s corner. “The tide has absolutely turned,” she told the Observer. “After two decades of lost growth, the last decade has seen strong growth. The continent has rebounded from the financial crisis quicker than others. I feel very optimistic. The world is now looking at Africa as an attractive investment destination as opposed to a place where aid is sent.”

She is seen as an orthodox economist who takes a pragmatically positive view of China’s expanding role on the continent. In a TED talk on aid versus trade in 2007, she argued: “The UK and the US could not have been built today without Africa’s aid. It is all the resources that were taken from Africa including humans that built these countries today. So when they try to give back we shouldn’t be on the defensive. The issue is not that. The issue is how we are using what is being given back? How are we using it? Is it being directed effectively?”