This year politicians look set to behave more irresponsibly than ever. The 1995 Budget has already been called the Great Giveaway. It's a safe bet that politics will consist largely of manoeuvres designed to appeal to the whims of the electorate, as the Government seeks to manufacture that truly miraculous swing in popular support that will be needed if it is to get itself re-elected.
So why should Management Today invite politicians to intervene further in business? Because there is a desperate need to enact - and enforce - effective environmental legislation. Strong companies know that business must achieve sustainable development - that it must meet the needs of the present without compromising future generations. As Will Hutton points out (Red Alert on Green Concerns, p26), environmental conscientiousness in some areas brings immediate financial benefits; in others, it forms a coherent part of Total Quality Management which outweighs short-term cost concerns. But some measures to achieve environmental sustainability do involve expenditure that will not be recovered in the near term. Too many weak managements, focusing on short-term performance, regard such expenditure as an unnecessary hindrance to competitiveness. Lack of strict and enforceable legislation only encourages these companies to neglect investment that could benefit themselves - as well as the nation as a whole.
Stricter environmental legislation and enforcement will not only generate investment in the long-term future of the UK; it will create jobs in a knowledge-based industry, and help to focus management attention on total quality. The nation's politicians should ensure that Britain is striding in the vanguard of environmental progress, not being dragged along reluctantly at the rear.
Private investment on a roll.
Entrepreneurs and senior managers are now giving the private end of UK business a much-needed shot in the arm. These private investors, many of whom have long experience of running successful enterprises, are also supplying the companies they help to fund with much-valued advice.
Much of the upsurge in funding can be attributed to a measure introduced in the 1993 Budget (and augmented in 1994): rollover relief, which allows capital gains to be invested tax-free in private trading companies. The facility has proved extremely attractive both to entrepreneurs realising their investment in existing businesses and to senior managers cashing in their share options. The cost to the Exchequer is presumably limited, since capital gains tax is notoriously avoidable - or, when unavoidable, drives wealth and talent overseas. Bravo, Mr Clarke.