DIY Investor Magazine
/
Jan 2017
36
With 2017 upon us, will Theresa May
have the courage to wake the nation
from its slumber? It’s a question the
City Grump has set out to answer.
WILL 2017 BE THE YEAR OUR COUNTRY AWAKES
FROM A QUARTER CENTURY OF SLUMBER?
It all started 27 years ago when the incoming prime
minister, John Major, said he was aiming for ‘a nation at
ease with itself’.
After the revolutionary shocks of the Thatcherism
he rightly perceived the nation wanted to draw the
proverbial duvet over its head and comfort itself with
‘warm beer and cricket’. The scene was set for the rise
of mediocrity – and we hope things change for 2017.
After Major came the oleaginous Tony Blair who
managed to whisper sweet nothings into the nation’s ear
for a whole decade – he said, ‘I’m a pretty straight sort
of guy’ in an interview in 2007.
A man, whose judgement of international players was
so bad he remained in awe of George Bush, became a
godfather to one of Rupert Murdoch’s infants in a white
robed ceremony on the banks of the River Jordan, and
in his retirement years aligned himself with colourful
characters from former communist countries.
Then, finally, we were given David Cameron, almost
a professional slumberer in his own right. He was the
apotheosis of that Etonian desire to make governing look
languidly effortless. The trouble was that he believed his
own publicity and made little effort on anything, The EU
being a prime example.
Former Prime Minister Harold Macmillan, in a sentence
criticised for its Jew-consciousness, remarked of
Margret Thatcher’s cabinet that it ‘had more old
Estonians than old Etonians’. My, how the wheel came
full circle, with no less than 12 members of that famous
school in Cameron’s line-up.
And thanks, in considerable part, to these three men
and their acolytes, for more than a quarter of a century
now we have become, what is known in financial
circles as ‘risk–off’. We have become obsessed with
measuring/testing everything in an effort to mitigate risk.
STEVE JOBS OR JAMES DYSON DID NOT BUILD BRILLIANT
COMPANIES BY WAITING FOR A SET OF ALGORITHMS TO
TELL THEM WHAT TO DO’
The result is that our NHS is swarming with managers
measuring away and contributing nothing of worth to
the nation’s health, our education system is staffed up to
produce test data geared only to preparedness for the
next OFSTED inspection, and the growth industry that
has left all others for dead is compliance.
In our risk-off country mediocrity has paid very well
indeed for those at the top. A study published by
Lancaster University Management School just before
January 2017 found that in the 11 years to 2014 the
median pay package of FTSE 350 directors had
increased by 82% to £1.5m whereas the return on
invested capital (net of the cost of capital) had been just
8.5%.
This risk-off culture of mediocrity as John Hegarty,
creative founder of the famous Bartle Bogle Hegarty
agency, points out has spread to that most dynamic of
industries, advertising.
