When economic historians come to write the book on the first great depression of the 21st century, squeamish bankers, politicians and credit ratings agency executives might want to skip the chapters dedicated to their contributions.  After four austere years, corporate bosses – who’ve enjoyed inflation-shattering pay rises throughout – might want to think about unlocking the mountains of spare cash they’ve been hoarding or face a chapter on how their failure to invest for the future helped extend the downturn.

After Lehman Brothers imploded in September 2008, global stock markets tumbled in sympathy. Within just a few months, both the Dow Jones and the FTSE had mislaid over 30 percent of the value of shareholders’ funds. This made 2008 and 2009 regrettable years if you were forced to collect your pension.

With revenues remaining flat or in decline, and despite an uncertain outlook for the global economy, the major stock markets have made a remarkable recovery – both the Dow and the FTSE are now higher than they were three months before Lehmans dropped the bombshell (see chart).


The markets have recovered recessionary losses. Investment needed to maintain momentum.

This tells us that the member companies have done an admirable job of cutting jobs, slashing costs and addressing inefficiency.  It suggests they’re also making creditors wait a little longer to get paid and trading any losses incurred in the immediate aftermath of the crash against current tax liabilities. Perhaps more worrying is that most corporates have also significantly curtailed new investment programmes, choosing instead to hoard the cash.

In May this year, Deloitte estimated that public companies in the UK were hoarding £64 billion of surplus working capital on their balance sheets.  This cash mountain is fuelling dividend growth (up 17% in the last two years with further rises predicted this year), while directors await better odds before making new investments. The odds will only improve when confidence makes a comeback.  The catch 22, of course, is that investing some of that corporate cash mountain would help entice confidence back out of hiding.

In other words, it’s not just the banks that are starving the economy of liquidity and even a competent government (were one available) can’t be expected to deliver business confidence on its own.

We’ve had four years of corporate hunkering down.  In the same way that you can’t spend cash twice, you can’t save the same costs more than once.  So in order to continue to improve shareholder returns in the near to mid term future, businesses need to start investing again now.

But that, we’re told, requires confidence.  Quite right.

With unemployment unsustainably high, tax proceeds declining and the government deficit expanding, maybe now is the time for corporates to invest some of that cash.  It could illustrate their commitment to corporate and social responsibility more strongly than any environmental initiative or charitable good deed.

So go on, big corporate boys and girls.  Open your wallets and buy the country a slice of confidence.




I’ve had remarkably few ‘altercations’ with journalists during my 20 year career in communications – the odd ‘agree to disagree’ discussion, but only one screaming match.

A reporter from the Evening Standard asked whether my then employer’s pension was under-funded (where the value of cash and investments in the fund is lower than the liabilities).  I advised him that a formal review had been commissioned and the answer would be known a few months later.  This was going to be too late for a reporter who needed to stand up an already written story.  “Can you confirm that the fund could be in deficit,” he asked.

“The fund could be in surplus or it could be in deficit – we won’t know until the auditors complete their review,” was my response.  The headline on the front page of the Evening Standard’s (then pink) business pages that afternoon was more definitive than that.  I called to correct his misunderstanding and a game of ‘he said, she said’ followed.  I blew a fuse and called his editor to ask why he’d hired a gambler to play the role of a reporter.  The gambler’s fuse exploded too. It all went south from there.

With everyone’s fuses fried, it became a dark afternoon.  I had to fend off other reporters and institutional investors, not to mention a worried pension trustee and an irritated CFO.  But no one died and an after-work drink with the business editor restored serenity.  The world moved on.

A salutary lesson in the dangers of trying to over-sell a story

My pension fund tiff was put in perspective at the Frontline Club recently when I went to hear Kevin Marsh, former editor of Radio 4’s Today Programme, talk about Stumbling over Truth, his new book detailing the story of WMD, the Iraq War, the Hutton Enquiry, the now famously ‘sexed-up’ dossier and the tragic death of Dr David Kelly from Marsh’s perspective.

Marsh was the Today programme editor who put Andrew Gilligan, then the BBC’s Defence and Diplomatic correspondent, on air to first raise the allegation that the dossier had been ‘sexed-up’.  Dr Kelly, it turned out, had been Gilligan’s source.

For those with an interest in the story that polarised a nation and led, ultimately, to Blair’s political downfall, the book is required reading. Despite his central role in the events, Lord Hutton never called Kevin Marsh to give evidence.  This is the first time Marsh has told his side of the story that cost Gavyn Davis, then chairman of the BBC, and Greg Dyke, the corporation’s director general, their jobs.

But the book is also Marsh’s memoir of New Labour’s communications strategy to ‘create the truth’ during Tony Blair’s premiership.  Creating the Truth was a phrase coined by Peter Mandleson and a strategy implemented by Alastair Campbell.

Marsh details some of the lengths the then Labour Government went to in its attempt to create and control the news agenda.  As a communications professional, it makes uncomfortable reading as Marsh describes the daily battle for supremacy and to get a message across.

The book is a fascinating insight into the challenges between authority and those tasked with holding that authority to account.  No communications department, not even the Government, has the right to ride roughshod over the media in a democratic society.

Thankfully, the vast majority of us who work in communications will never have to deal with issues and situations that have such gravity, such far-reaching implications as those faced by Downing Street or the BBC during the Iraq War and it’s aftermath.

That said, Marsh’s book – perhaps unintentionally – is a salutary lesson in the inherent dangers of trying to over-spin or over-sell a story, or in trying to ‘control’ the agenda.



As the party conference season gets underway, party political-thinking turns to the prospect of retaining or winning power at the next general election. Liberal Democrat leader Nick Clegg kicked off in Brighton this week with an impersonation of someone with authority.

Each of the party’s best brains will now begin devising policies that will form the manifestos they hope will attract votes.  As such, a pre-election manifesto is like a job applicant’s CV, designed to help the chooser choose from a range of candidates.

Recent history reminds us that party manifestos can be printed using delible ink which can evaporate from the page shortly after power is bestowed, creating a communications minefield.  This is a lesson Mr Clegg should have learned over the last two years.

To help avoid repeating the reputational misteps caused by the printer’s poor choice of ink, I propose the next set of party manifestos include a section detailing what the party ‘won’t do’ in power alongside the proposals for what it might.  So, in the spirit of helpfulness, I offer the following starting suggestions.

Statute of limitations:  Should we be elected to power, the party commits to a maximum period of three months during which the incumbent can be blamed for any historical issues. After the three-month period has expired, the party (whether solo or in coalition) accepts that it is solely accountable for policies, achievements and results.

Point scoring:  As a party, we recognise that governing, particularly in difficult times, is a serious business.  Therefore, we will refuse to attempt to point score against the other side of the house for no better reason that we think it makes us look clever in front of the TV cameras, especially during Prime Minister’s Questions, or during the BBC’s Question Time.

Decision making:  We will only make decisions or enact policies or laws that are in the best interests of the country and its voters.  We will ignore, without fear or favour, any party-political interests or the interests of the institutions that underwrote some or all of our election campaign costs.

Hard working families:  We will never again use the term ‘hard working families’, either in written materials or in speeches or press interviews.  We now accept that it is a patronising and meaningless phrase among voters.

Original thinking:  We will not rely on political satire television series – past, present or future – for policy inspiration, recognising that satirists don’t often consider their scripts to contain valid or valuable policy ideas.

Respect:  If any MP is deemed by a majority of voters to have crossed the line (say, for example, a Cabinet Minister insults a police officer or confuses the desire of a media magnate with his quasi-judicial responsibilities) voters will be asked over the interweb whether that MP’s time is up (a red card) or if a simple warning (a yellow card) should be issued.  If elected democratically, the Prime Minister will not ignore the concerns of voters.

Readers are encouraged to add their own points in the comments section.