Prime Minister Gordon Brown got yet another serious ear-bashing last night, this time at the CBI’s annual dinner. Martin Broughton, the BA chairman who’s about to finish his tenure as president of the august lobby group, accused the Government of failing to address the spiralling budget deficit, and of ‘tearing up the manifesto commitment to the country’s entrepreneurial class’ with the 50p tax rate. This was, said Broughton, ‘nothing short of economic vandalism’ – and wouldn’t even raise much cash anyway. Perhaps he was feeling demob-happy?
Broughton actually started off rather politely, suggesting that the Government’s response to the banking crisis had been ‘admirable’ and that ‘Gordon played a blinder’ at the G20 meeting by freeing up funds for trade finance. Sadly for the PM, that was as good as it got: the CBI president then criticised the Government’s lack of ‘contingency reserves’ from the good days, the ‘plethora of initiatives running so far ahead of implementation’, and the failure in last month’s Budget ‘to develop credible plans to get the deficit under control’. The 50p tax rate was just a flimsy attempt ‘to divert media attention from this failure’, he raged.
Broughton, who also had a pop at the City for tarnishing the reputations of businesspeople ‘in the real world’, reckons the Government needs to start thinking about the deficit like a business would. That means reviewing its priorities and cutting back on non-core activities. ‘It’s not the Government’s role to address every issue in society,’ he insisted. ‘How many of the 1000 quangos costing £65 billion p.a. do we really need?’ (Not many, is our guess.)
Naturally the PM begged to differ: he didn’t like hiking the top rate either, he claimed, but apparently ‘we have a duty to act’ to restore the public finances. So that’s OK then. And he and Alistair Darling seem to be sticking to their prediction that the UK economy will return to growth at the back end of this year, even though the IMF suggested yesterday that this was unlikely. In other words, he’s ploughing on regardless, as you'd expect.
One leader who has done the decent thing is Mitchells & Butlers CEO Tim Clarke: he’s leaving the pub company in the wake of a disastrous bet on interest rates, which has cost M&B a staggering £460m. Given how tough current trading is for the pub industry, this was obviously the last thing M&B needed – and it pushed first-half profits down a painful 48%, to £44m. The cock-up has already cost FD Karim Naffah his job; now Clarke has gone too. Perhaps in the future M&B’s top brass would be better off concentrating on running boozers, and leaving the financial wizardry to people who actually understand it. Unless all the whizz-kids have decamped to a tax haven in the meantime, of course.
In today's bulletin:
CBI tags Gordon Brown as an economic vandal
Unhappy Birthdays for Clinton Cards
P&G claim that Pringles 'not a crisp' takes VAT-man's cake
Poor people skills destroy merger values
Trader's boozy bet results in two-year FSA ban