For a couple of years at least the UK media markets have been defying gravity, showing reasonable growth (in the circumstances) despite a wider economy that’s stagnant at best.
Over the weekend UK PM David Cameron (pictured) will be hobnobbing with the G8 group of industrial nations at Barack Obama’s Camp David weekend place. He will no doubt tell his European peers, including new French president Francois Hollande, how to run their businesses, sorry economies. Yet any business which tried to run itself like the coalition government is trying to run the UK would fail in double quick time.
One doubts that Trinity Mirror’s exiting CEO Sly Bailey figures very high on the Cameron radar (he’s obviously much more interested in News Corporation) but her demise is an object lesson showing that depending wholly on cost-cutting is just a way of managing, even accelerating, decline.
Yet that’s what Cameron and his hapless chancellor George Osborne are doing. Quite how Liberal Democrat business secretary Vince Cable (who must know this is barmy) and his clueless leader deputy prime minister Nick Clegg (Nick probably suspects it’s barmy but economics aren’t his strong point) justify staying in the government is a mystery. Yes, the ministerial cars are nice..
The FT’s veteran columnist Martin Wolf puts the case against the coalition’s toxic combination of slashing investment and masterly inactivity well here. Among other things Wolf says that, with government borrowing costs essentially at zero, there’s nothing to be lost and much to be gained by borrowing to fund infrastructure projects and building a few new houses, schools and hospitals.
Yet that’s anathema to Cameron and Osborne. Part of the trouble is that Osborne has painted himself into a corner by saying that deficit reduction is the only way (actually the deficit’s going up as tax receipts go down) and that the alternative would be a Greece-style exit by foreign investors. Yet foreign investors are falling over themselves to buy British government bonds (gilts) precisely because we’re not Greece or Spain or even France.
In the good old days a PM who knew his onions would turf George out of the Treasury (thanks George, you’ve done your deficit bit, let someone else have a go) but that was before the era of Tony Blair and Gordon Brown, when the second most powerful politician in the party was given the Treasury for as long as he liked, regardless of the dire consequences for the rest of us. Cameron and Osborne’s relationship is similar in the sense that shifting his chancellor to another job (exactly what prime ministers have done through the ages) would be interpreted as a possibly terminal fracture in the Government.
So what’s to be done? Cue the UK’s over-mighty media, currently squirming in the dock at the Leveson Inquiry into media ethics. Cowed, to a degree, they may be but a combination of the Sun and Daily Mail clamouring for a credible UK growth plan (there are some signs that the Mail is finally moving in that direction) would put the wind up Cameron and Osborne.
And others, like WPP’s Sir Martin Sorrell, might add their voice too. At the start of the coalition government just over two years ago Sorrell was a keen advocate of its slash and burn policies, which did seem rather like a turkey voting for Christmas. There have been some signs recently that he, too, is beginning to change his mind.
We may deplore, in general terms, these various ‘bully pulpits.’ But where are they when the country clearly needs them?