It was unfashionable of me to write in praise of George Osborne on Budget day. I did so, you may recall, because ‘at least we have a finance minister who’s always on the front foot’: I wanted to make a contrast between our Chancellor’s relentless activism in pursuit of his political goals, and the supine performance of eurozone leaders — who continue failing to offer any strokes at all while hoping for Mario Draghi to knock up a few runs with monetary trick-shots from the other end. Within 48 hours, however, our Chancellor seemed to be very much on the back foot, one hand clutching his protective box, as bouncers rained down from the unlikely combination of IDS and John McDonnell. So it goes in politics; a fortnight later we may observe — emotive issues of disability benefit aside — that the sheer complexity of modern fiscal policy-making leaves an unlovable risk-taker like Osborne open to attack from any angle his many detractors care to choose.
Here, for example, is my friend Allister Heath at the Telegraph writing about ‘the many (inevitably damaging but often popular) left-wing measures [Osborne] has imposed’ — while Labour’s McDonnell bangs on about ‘the bankers’ Chancellor… looking after a wealthy minority’, not least by offering higher-rate taxpayers a big cut in capital gains tax, to the enormous advantage of those lucky few who happen to incur very large CGT bills.
The recent Budget will go down as one of Osborne’s least successful episodes, even if there were measures in it, to help smaller businesses, for example, that will boost the economy in the medium term. But at risk of being labelled ‘left-wing’ by right-wing purists, let me at least say a word in favour of the Living Wage, which kicks off this week at £7.20 an hour and will rise to £9 by 2020. When it was announced in last July’s Budget it was, needless to say, a blatant bid to knock Labour spokesmen off their soapboxes. It’s also a measure that quietly shifts a little more of the economic burden on to private-sector employers and away from the state. In businesses dependent on low-paid workers, it will clearly cause strain: there are warnings, for example, that it will exacerbate what’s already a crisis in elderly care — in which the state pays as little as it can to buy services from private providers.
So what’s to praise? In the early years of this decade, wages were stagnating in a way that was not helping the recovery and really did look unfair, while rising job numbers indicated room for an uptick in pay — and evidence from the introduction of Labour’s minimum wage in 1999 suggested the impact on businesses would mostly be marginal. Whatever Osborne’s ulterior motives, the Living Wage is a nudge in the direction of a better-balanced economy, and a gambit that finance ministers elsewhere are very likely to follow.
I was fascinated to learn the life story of Hungarian-born Andy Grove, the driving force behind the Californian technology giant Intel, which makes the microchips that power most of the planet’s electronic devices. The name of Grove (who died last week, aged 79) was little known outside the digital world, but he was the sage of Silicon Valley to whom more famous innovators turned for advice. When Steve Jobs was pondering his return to Apple in 1997, 12 years after he had been forced out, it was Grove he called for counselling. Always blunt, Grove told him: ‘I don’t give a shit about Apple,’ a remark apparently provocative enough to make Jobs decide to go back. At Intel, Grove kept the company at the forefront of microprocessor design decade after decade by a process of ‘creative confrontation’ — heated but non-hierarchical argument over product ideas, in which, according to one observer, ‘He was perfectly fine with having employees yelling back at him.’
Intel today employs 107,000 people and has a market capitalisation of $150 billion. We can but wonder whether it would have succeeded at all if Grove had stopped in England after escaping the 1956 Hungarian uprising and if the company’s scientist founders, Bob Noyce and Gordon Moore, who hired Grove as their first employee in 1968, had sited their research lab in, say, Swindon rather than Santa Clara. In the start-up phase they would have struggled to raise venture capital; as it was, their key US investor was Arthur Rock, who was also an early backer of Apple, where he had a hand in ousting Jobs in 1985.
Nor would they have found a welcome on the hidebound London stock market of the 1970s. Like the now-forgotten semiconductor maker Inmos, Intel’s nearest UK equivalent, they might have been spotted as a potential ‘national champion’ and drip-fed state funding, but would have failed to achieve international scale, eventually to be sold to foreigners and disappear with trace.
And there would have been no great fortunes made. Grove amassed $400 million; Noyce died in 1990 but Moore, now 87, is worth $6 billion. The most likely counter-factual, if the Intel trio really had been Brits, is that they would have left these shores long ago and gone to America.
New Europe on sea
Easter in Tenerife, but without Maria Sharapova — too shy to respond to my invitation last week. A pity: estate agents’ signs here are often in Russian, and we could have found a nice little apartment at a knock-down price. The weather’s lovely, the maitre d’s are Romanian, the doctors are Polish, the street vendors are African, the breakfast is Full English, the worst-dressed tourists are Ukrainian and the best-dressed are German but they spend no money in the luxury shops. At least the taxi driver is Spanish: he studied business in Brighton but can’t find better work. Though the nearest landfall is Western Sahara, this is new Europe on sea: fine for a holiday but economically fragile and (without Maria) not a place I’d like to live. That’s my breezy Brexit metaphor for this week.
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