Howard Davies: The MT Diary

Hong Kong flourishes as London burns. Two wheels good, four Addison Lee ones bad.

by Howard Davies
Last Updated: 21 Oct 2011

My Chinese lawyer friend in Hong Kong is a bit gloomy: not enough work to do.

We shouldn't see this as unalloyed bad news. She is an insolvency and restructuring expert and fewer businesses are in need of her services - the boom times are back with a vengeance in the Special Administrative Region. As you look out of your hotel window each morning, it seems that yet another high-rise has sprouted overnight. The shoreline of Hong Kong Island is pushed out a little further towards mainland Kowloon each year to create more elbow room. The big economic controversy is about the size of the budget handout the government has just announced, to mop up an over-large surplus.

At Happy Valley racecourse, the rugby sevens were in full swing. It's a party Nero might have found a bit OTT. The boxes are full of sharp-elbowed brokers and traders for whom the financial crisis is already an obscure historical episode, much like the South Sea Bubble. There is only a faint residual whiff of the old Filth (Failed In London Try Hong Kong). England lost the final, sadly, to the inevitable All Blacks. But the stadium hero remains England's Ben Gollings, who has scored an unimaginable number of tries in sevens tournaments around Asia, yet who remains largely unsung at home. It is sad that he will have retired by the time rugby sevens are an Olympic sport in 2016.

HK-Joburg is not a regular route for me. But the Cathay Pacific flights are packed. South Africa may not be China, but it is doing pretty well, though suffering from an escalating rand. Cheap it is not. A taxi from the airport to a Sandton hotel is almost £50. Maybe I'm not the sharpest negotiator, especially after a 12-hour flight, but this was on a meter.

The country has benefited from a significant improvement in its terms of trade. With gold at $1,400 an ounce and soaring demand for coal, there is money to be made on the veldt. Not enough of it trickles down to the townships, perhaps, though a friend in the black empowerment business was quite bullish. Two successive finance ministers of an Osbornian bent have left the public finances in a reasonable state. So they look with some amazement at our predicament and kindly hope we will pull through without a revolution. The occupation of Fortnum and Mason attracted much attention in the old colonies, where there are those who still believe that the British middle classes live on their Christmas hampers until Easter.

Once again, the UK is seen as a kind of social science lab where extreme experiments are conducted by mad professors, experiments that the rest of the world would not tolerate, but in whose results they are intensely interested. I recall it was like this in the Thatcher days, when she pushed interest rates up to 17% in an attempt to control an arcane definition of the money supply and injected some bracing handbag discipline into a 'never had it so good' public sector. The foreigner loved watching, from a safe distance, and learned some useful lessons.

Once again, we are engaged in shaking the test tubes and igniting the Bunsen burners, as we begin to squeeze our fiscal deficit more aggressively than others would contemplate (unless the IMF told them they had no choice).

'Will the coalition survive?' one is asked in every meeting. 'Well, they'll either hang together or hang separately,' I sagely respond. 'Won't the economy inevitably slip back into recession, under the weight of tax rises and spending cuts?' It could happen, I agree. 'What's a nice friendly herbivore like Nick Clegg doing in the company of the slashers and burners?' There is no answer to that - if you can think of one, let me know.

In Singapore, they are especially intrigued. They know more about the British economy than the average punter on the heritage Routemaster, for the good reason that they invest more here than British non-savers do. One sometimes wonders why, when their own economy grew by 14% last year. It's a whole new world, out East, and newer every time I go. They do things differently there and, generally, better.

Back in London, the spring weather was a consolation. After a constant diet of 30 degrees and 95% humidity, the fresh air was invigorating. It even reconciled me for a while to the daily challenges of cycling through London.

The bendy buses are cycle-hostile, we know, with their eccentric feints to the right before a sharp left turn across the cycle lane. We still await their replacement by Boris's new creation and may wait some time more, I fear. But I am starting to think they take second place to Addison Lee, two words which strike terror into the heart of every two-wheeler in the capital.

The company has very successfully swept up a disorganised minicab sector to run 2,500 private hire cars in London, so now you see almost as many of them as you see black cabs. The faintly irritating swirly logo is ubiquitous. They proudly claim to have satnavs in every car and I can believe it, as drivers spend more time watching the screens than they do watching the road for cyclists. It would also be good if they fitted their Mercs and Galaxies with left indicators, which I can only presume they do not have, and if they told their coaches not to park and unload on the zigzag lines by zebra crossings.

I hope they don't advertise in Management Today: well, I guess they won't in future, anyway.

- Howard Davies was the director of the London School of Economics until the end of last month

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