Shocks & Stares » Friday Five http://blogs.hillandknowlton.com/shocksandstares H&K\'s Financial & Professional Services Team Blog Tue, 19 Mar 2013 08:00:56 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2013/03/friday-fiver-12/ http://blogs.hillandknowlton.com/shocksandstares/2013/03/friday-fiver-12/#comments Fri, 15 Mar 2013 15:24:57 +0000 Joey Ng http://blogs.hillandknowlton.com/shocksandstares/?p=855 1. Just deserts for Chris and Vicky

From the repeated lies of Chris Huhne and Vicky Pryce during trial, to the sub storyline of Huhne’s fractured relationship with his son, this car crash of a soap opera-like story has been played out in full fanfare under the media spotlight. No one likes to air their dirty laundry in public. Perhaps the eight months sentence the pair faces, will draw an end to this thoroughly modern-day Shakespearean saga. Alternatively perhaps they will use the publicity to secure book deals.

Image source: Flikr

2. Britain loses its fizz

The fizz has officially fallen flat as Champagne has been cut from the basket of goods, alongside Freeview boxes and round lettuces. According to Mintel figures, sales of the bubbly have fallen by more than 30% since the hey-days of 2007, from £1billion to an estimated £690million. Trading in bottles of Champagne, typically around £40, are bottles of white rum which can be bought for a fraction of the price.

3. Sterling stagnation is here to stay

This week the ever-struggling sterling hits a two and half year low. Good news for British investors, bad news for holidaying Brits (of which sadly, I will be one of them).

4. There’s no Pope without fire

On Wednesday, for the first time in 1,300 years, a non-European Pope was elected as head of the Roman Catholic Church. A sea of faces welcomed Argentinian Cardinal Jorge Bergoglio as he stepped onto the balcony to rapturous applause. Bergoglio will now live as Pope Francis and take up residence in the Vatican. A far cry from his one bedroom flat in Buenos Aires…

5. Can women have it all?

An interesting commentary piece in the New York Times written by former CFO of Lehman Brothers, Erin Callan on wanting to “have it all” and failing. This was in response to a heated debate sparked by the launch of Sheryl Sandberg’s new book, “Lean in” – and much of our conversations here in the team as well.

Can women strike the perfect work/life balance and really “have it all” or is it simply about “having enough” and being happy with it? What do you think? Leave us a comment below.

Thanks to @goldtorpedo for contributing to this week’s Friday Fiver

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Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2013/02/friday-fiver-9/ http://blogs.hillandknowlton.com/shocksandstares/2013/02/friday-fiver-9/#comments Fri, 22 Feb 2013 17:47:21 +0000 Edward Jones http://blogs.hillandknowlton.com/shocksandstares/?p=741  

Image source: STV

1. FRIDAY FIVER IS BACK!

After a brief winter hiatus, we are delighted to announce that Friday Fiver is back with a vengeance! We’re sorry we went away and we hope you’ll have us back!

2. Blimey… Tax evaders named and shamed by Revenue

This feels like a bold step from HMRC. Will ramp up pressure on the Govt to disclose big business’ tax evasion – as demonstrated by Margaret Hodge’s intervention.

3. Trial by media or trial by jury?

Judging by the number of online mentions of the tragic incident of Reeva Steenkamp’s death, which was close to 1,000,000 on the day of the shooting, it’s hard to detract from the two trials Oscar Pistorius is facing. One in front of the Magistrate’s court and the other in front of the world’s media and the court of public opinion. Nicely summarised in this piece by Daniel Howden and Ian Burrell at The Independent:

“…in many ways his trial began as soon as news of his lover’s death reached the media. The only difference here is that the facts of the case carry a much lower burden of proof. The slow grind of South Africa’s justice system, which barely recognises contempt of court, has been unable to keep pace in the era of social media and rolling TV news. As a consequence, the first disabled global sports superstar has found himself deluged with accusations and insinuations masquerading as facts.”

4. Harry Styles Backs Ed Miliband for PM

This is BIG NEWS! Really big, but begs the question ‘Who do the other members support?’ Perhaps they’re all lefties! Harry is the lead singer afterall. Ok. What about One Direction’s big rivals - The Wanted? They must be true blues. Mumford and Sons? Lib Dems. Definitely. Their love of string instruments, country folk and their urban upbringing must surely indicate a yellow streak.  

5. FPS FATTIES

And a lighter story to end this week’s Friday Fiver, especially for the snack-loving FPS team, and for the myth of the “H+K stone” to be confirmed by a story in the papers this week. Research by The Village Bakery found that office workers are amongst the worst offenders for piling on the pounds – over 6lbs in fact – with cakes and biscuits brought into work by colleagues. This week already, we’ve had homemade cupcakes brought in by the lovely Clare M and the week before, a deliciously moist lemon drizzle cake made lovingly by Liz, Syrian delights and Jersey fudge from the islands. Temptation is just too hard to resist. Pass the biscuit please.

Thanks to @liyywln for contributing to this week’s Friday Fiver

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FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2012/02/fps%e2%80%99-friday-fiver-3/ http://blogs.hillandknowlton.com/shocksandstares/2012/02/fps%e2%80%99-friday-fiver-3/#comments Fri, 10 Feb 2012 17:58:08 +0000 Joey Ng http://blogs.hillandknowlton.com/shocksandstares/?p=513 Another week, another Friday and that means another edition of our team’s Friday Fiver. This week, we have money-printing banks, Twitter-banning broadcasters, Newsnight-debriefing and Good week/Bad week. Thanks to our contributors DC, EJ, Hendog, and Josh-ua. Enjoy!

RUNNING OUT OF PAPER… It’s becoming increasingly hard for the Bank of England to convince people of the value of QE. As Fraser Nelson argued in the Telegraph, the Bank has gone a little quiet on their original reasons for launching QE which isn’t helping – nor is the fact that the links between QE and growth aren’t being articulated clearly, if it all. Yet at the same time, IHS’ Howard Archer is already predicting QE4 for May.

There's more of this in the games room

Source: Creative Commons/mtsofan

What the bank faces then is a PR challenge (as well as the frankly odd problem that they may run out of govt bonds to buy). If they believe QE4 is needed, then they’ve got 3 months to convince a sceptical media and public why it’s needed – expect Mervyn King’s quarterly inflation report next week to begin that process.

In the meantime, hats off to Stephanie Flanders last night for managing to explain what QE actually is and does – that may well be a first

SKY’S SOCIAL MEDIA COMMANDMENTS…

Source: theindiepedant

Thou shalt not repost non-company tweets

Thou shalt not re-tweet rival journalist or people on Twitter

Thou shalt not tweet someone else’ beat other than your own

Thou shalt pass breaking news lines to the news desk before posting them on social media networks…

The Guardian reported that the greater powers at the broadcast station stamped down their feet, and banned journalists from reposting tweets not relating to the company. Contentious guidelines even include the warning to Sky News employees not to retweet rival reporters.

The latest development raises once again, the debate on ownership of Twitter accounts, corporate or otherwise and how a brand can be represented and equally, mis-represented on social media through its employees.

The interesting question here is whether the guidelines will be applied to other parts of News Corp’s network, and more importantly Murdoch’s own account.

NEWSNIGHT DE-BRIEF…On Wednesday, members of the FPS team attended a Gorkana event with Newsnight’s deputy editor Shaminder Nahal and planning producer Samantha McAlister to hear how the show is put together and what the team are looking for when it comes to content and guests.

For those of you with a Gorkana PR log-in, there’s a detailed summary of the event here.

Looking through our notes from the event, a number of points jump out:

  • The show has an average audience of 800,000 but this can jump significantly in a big news week. For example, at the height of the phone hacking scandal, 1.7 million people were tuning in
  • Those involved in the production of the show, are incredibly passionate about their work
  • Jeremy Paxman is apparently a joy to work with, although perhaps unsurprisingly, he is very challenging and demands a lot from those he works with

Source: Creative Commons/Ric_James

It’s a trend we have noted before, but was one that was reiterated at the event – business and economics news has become “sexy”. Newsnight’s producers are always on the lookout for people from the City who can explain the world of finance and its wider importance to the viewer.

The show’s producers left us with the thought that Newsnight is an opportunity to set the record straight or to put across a new or important view to the nation’s opinion formers. It’s not for everyone, but for those willing to take on a challenge, there are a few more prominent slots.

On the subject of setting the record straight and BBC flagships… The embattled chief executive of RBS, Stephen Hester, addressed his critics this week and the interview is a must listen.

GOOD WEEK/BAD WEEK…Credit where credit’s due, Ed Miliband has had a very good week. To be precise, Ed Miliband had an excellent PMQs. Yes, David Cameron had a very bad PMQs. His aggressive, impatient responses to Miliband’s patient line of questioning confirmed the accuracy of his likeness to Flashman ‘literature’s most famous bully’. Public bullies don’t tend to make popular Prime Minister’s. Just look at what happened to Gordon Brown:

Brown the Bully

Miliband on the other had a bit of an open goal when it came to the NHS. Even the influential ConHome has urged Cameron to #dropthebill, so to speak. The softly, softly approach worked well for Miliband though and importantly, his line of inquiry on the NHS was consistent. Cameron’s increasing frustration at having to give the same weak lines and limp backing to his struggling Health Secretary, amplified Miliband’s taunt of ‘calm down dear.’ It was typical of the bad luck Mili E has suffered with broadcasters that the news of Harry Redknapp’s court case emerged at the same time as PMQs, therefore minimising the impact of this little victory. Cameron’s an incredibly savvy dispatch box performer and will be increasingly wise to it, but if Miliband can continue to draw out Flashman Cameron he may enjoy more success in the opinion polls.

MORE BAD NEWS…Headlines have been dominated by the arrest and trial of ‘rogue’ trader Kweku Adoboli who is accused of unauthorised trading which cost his employer – Swiss bank UBS – about £1.5bn. However, a potentially more interesting story that has come to light in recent days is the sheer scale international investigation into manipulation of Libor – the interest rate used for inter-bank lending. Regulators in Japan, the UK, the US and Europe have been investigating the scheme since at least March 2011, and have now implicated employees at a number of major financial institutions. Analysts had long been suspicious that financial institutions were covering up the size of their borrowing costs during the depths of the financial crisis in 2008.

The American Securities and Exchange Commission has fined British medical equipment Smith & Nephew $22m for bribing Greek doctors to use its products over the course of a decade. The case follows a similar investigation into Johnson & Johnson last year which led to the company agreeing to pay $77m for bribes it had paid in Greece, Poland, and Romania.

The increase in intranational prosecutions and international regulatory collaboration has also highlighted differing standards about what constitutes corporate crime. Many American investors were surprised at the British Financial Service’s Authority decision to fine hedge fund manager David Einhorn for insider trading because his actions would not have been considered unlawful in the US. British authorities generally cast a much wider net when investigating white-collar crime but are perceived to have a miserable record when it comes to prosecutions. By contrast, their American counterparts have a narrower definition but pursue cases with vigour, even if that means crossing international boundaries to do so.

It seems likely that more cases of this nature will emerge in the coming months, especially if Eurozone crisis continues to destabilise international markets.

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FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/06/fps-friday-fiver-8/ http://blogs.hillandknowlton.com/shocksandstares/2011/06/fps-friday-fiver-8/#comments Fri, 24 Jun 2011 13:07:55 +0000 Edward Jones http://blogs.hillandknowlton.com/shocksandstares/?p=181 Welcome to our Friday Fiver. This week we look at Nick Clegg’s proposals for public ownership of bailed out banks, the ever growing tech bubble and cybercrime, whilst we shift effortlessly from speaking to ourselves in the first person to a collective, as our minds wonder what the weekend might hold. With a few nuggets of information at the very end – so worth reading all the way through!

Thanks to Ben, Dave and Jo for contributions.

The People’s Bank…

It’s not often that ‘I agree with Nick’. But despite the naysayers who say that it’s pie in the sky, the administration of such a project would be impossible, or that Nick Clegg is only mentioning it now to get himself some press attention while he travels in Brazil, I have to say I like the idea of those who bailed out the banks getting something back. I also like the idea of reintroducing share ownership to the public at large because it goes some way to bridging the gap between what people perceive of financial services and equity ownership and reality.

It also helps with the financial education theme which is so popular amongst politicians and financial services companies, but rarely actually really delivers change because at the end of the day it is a one way message. Repeated surveys show the public never really engage or feel comfortable with finance, however well intentioned the various programmes are that exist. If they owned shares, they would pay attention, they would engage, they would also probably make some money in this instance, and get something back for the tax revenue they provided to the banks.

Surely that is worth further investigation?

The bubble keeps growing…

We’ve written before about the soaring valuations of tech companies, and in particular, social media companies. The likes of Facebook, Twitter, Groupon and Foursquare have seen their potential values skyrocket as investors queue up to get a piece of any potential IPO. We (or to be blunt, Dave) have been somewhat sceptical about the value being placed on these businesses, chiefly because the profits most of them are making are barely correlated to the huge valuations put on them.

Over the past week, we’ve had two more cases in point. The first is Pandora, an online music and radio service based in the USA. It floated for $2.6bn mid last week, and its value briefly soared above $4bn according to an in-depth article about this issue in Tuesday’s FT. The second is Shazam, which secured $32m in new funding from venture capitalists on Wednesday. This means a float is unlikely for a while, but it didn’t stop ‘sources’ claiming the company “was now worth hundreds of millions of dollars” according to an FT blog.

The missing element here? Profits. Shazam is making them, but only just, whilst Pandora hasn’t made one yet, and its current revenues of $110m are a tiny fraction of its valuation.

This sceptic remains unconvinced I’m afraid….

Cyber crime

The threat of ‘cybercrime’ loomed large this week after news of the arrest of a 19 year-old hacker suspected of carrying out attacks on the C.I.A and the UK’s serious organised crime agency. After the WikiLeaks saga and arrest of NASA hacker Gary McKinnon it would seem that security agencies are struggling to keep a handle on…well, security. But this isn’t just any security, the issue of ‘cyberspace’ is a particularly tricky one as currently there is no transnational law to define what happens next.

This is an issue policy makers have been keen to address since the National Security Strategy identified cybercrime as a tier one priority risk.

But the question remains, how do we control this vast and intangible area? In the FT this week former British cabinet minister John Reid says innovation is the key to cracking the cyber crisis. What is needed, says Reid, is an ‘elite cadre of innovators able to lead a workforce with a different, entrepreneurial ethos’. We’d like to think they might look like this.

Anyone up for the job..?

Summer Solstice

June 21 saw the longest day and shortest night of the year and despite this marking the official beginning of the summer season it also means that from now on our days will be getting shorter and our nights longer and we might as well all be starting to get ready for Christmas.

But for those of us who haven’t yet embraced the summer months you might want to have a look at Visa Europe’s (client) Third Annual Travel Report which revealed that holidaymaking Britons are increasingly venturing out of the eurozone. Visa Europe analysed international spend trends of 105 million UK cardholders to reveal the countries with the highest annual increase in consumer spend in 2010. While Zimbabwe tops the list, fellow African countries, Gambia (4th), Nigeria (5th) and Morocco (10th) all featured in the top ten.

Definitely food for thought if you haven’t yet planned your summer getaway, but if you would like to keep your feet on home turf, you might want to try and find some at Glastonbury this weekend, which despite its muddy start, festival goers are expected to enjoy the hottest day of the year on Sunday! Excellent.

On the theme of live music…

And fitting for a Friday afternoon, we’ve noticed recently an upward trend in people singing out loud on trains along to their ipods, regardless of the fact that their fellow commuters are either staring at them and tutting, or sniggering quietly behind their copy of the Evening Standard. It’s not surprising given the tendency of City workers to drown their sorrows before boarding the train back to the home counties and with more mobile music, it was bound to happen.

Last night’s performance was a classic though, not only the odd word being sung, but the full nine yards. Eyes shut, belting out a rambling drunken version of what sounds something like a combination between Blur, The Streets and Bob Dylan but with one of the most awful voices ever heard. The whole carriage falling about laughing, the commuter/singer totally oblivious, eyes still shut, finger pointing in the air and occasionally tapping on the table in front of him. Never mind karaoke, this is surely a new national sport. Is this is continuing influence of reality TV? Dave, we think you might know the answer, but can anyone think of a name for it?

The best of the rest…

If you haven’t read a transcript of this week’s treasury questions, never mind, but for *the record* this summary from Paul Waugh comes highly recommended.

H&K’s very own Candace Kuss has written an excellent article for CNN on her experience at this year’s Cannes Lions advertising festival.

And BIS published a consultation on consumer empowerment this week, which we think you might like to know about.

Have a good weekend.

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FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/06/fps-friday-fiver-7/ http://blogs.hillandknowlton.com/shocksandstares/2011/06/fps-friday-fiver-7/#comments Fri, 17 Jun 2011 17:16:28 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=172 Hello again all. It’s been a frantically busy week here in the Financial & Professional Services team, but as ever we bring you the Friday Fiver which rounds up this week’s events. Thanks to contributors Mel, Nick, Jo and Jonathan this week.

Freedommmmmm…Braveheart bonds, kilt edged bonds, Connery bonds and Jonathan’s own personal suggestion of shortbread bond are just some of the names being used to describe new powers that will allow Scotland’s government to issue debt.

Mel's adopted country is about to issue its' own bonds

The Scotland Bill makes provision for the country to raise up to £2.2bn from markets to fund infrastructure projects. There had been calls to permit up to £5bn of borrowing but this idea has been dismissed and Treasury ministers are at pains to emphasise that this does not amount to writing a blank cheque. It remains to be seen what ratings agencies will make of Scotland’s credit worthiness.

However, this week also saw riots on the streets of Athens as the Greek government seeks to implement austerity measure s to cut spending and meet the nation’s debt commitments. The dangers of small economies borrowing big sums of money should be front of mind for Scottish ministers.

We hear all about the Economist…This week,we were lucky enough to meet Daniel Franklin at the FPS Big Bite. The well respeceted Business Affairs Editor has been at the Economist for a staggering 28 years and gave us an insight into the passion that journalists have for this successful newspaper. With a circulation of over 1.5million around the world and 200,000 in the UK you can imagine that the publication only attracts the best of the very best of journalists!

We learnt all about the 'weekly newspaper' this week

After making us promise that we wouldn’t bombard him with emails following our lunch (sorry in advance Daniel!!) he went on to explain the thinking and routine behind The Economist giving the team a useful inside look into the ‘fiercely independent’ newspaper.

A regulatory phoenix …On Thursday the Government published its financial regulation White Paper and draft Bill which will see the creation of the new Financial Conduct Authority and Prudential Conduct Authority, and split of regulatory supervision now been offered up to replace the FSA.

Those readers who are equally wizened as this writer (Mel) might have a sense of déjà vue, having witnessed at first hand – working as a fresh faced, hopeful graduate at the Bank of England when the BCCI crisis erupted in the 1980s setting off – the chain of events which ultimately culminated in Gordon Brown forcing the old lady to relinquish her jealously guarded control of the banks.

Fast forward to 2011 and, here we are again!, the previously lauded and internationally revered one-stop financial regulatory juggernaut of the FSA and the ambiguous tripartite structure between HMT, the Bank of England and FSA both now found failing in the aftermath of the latest – and let’s acknowledge – near Armageddon financial crisis.

So another brave new phoenix emerges from the ashes with strengthened and expanded statutory objectives around responsibilities for the insurance sector, an enhanced competition regime and a strengthened role for FOS.

Otto Thoresen, Director General, ABI endorsed these measures but pointed to unanswered questions about how the links between the different regulatory bodies – PRA and FCA – will work in practice and how exactly FOS will work with FCA. Indeed, yes it is important to avoid overlap and confusion. Sound familiar?

The battle for pension reform is about to begin…The pressure has slowly been building on this one, with strikes being pencilled in across the week. But Treasury Secretary Danny Alexander lit the touch paper this morning with an article in the Daily Telegraph outlining the government’s intention to force public sector workers to work longer and pay more for their retirement pots.

Saving for old age is a very hot political potato

Is it fair? Many in the private sector would say so. Will it happen? That’s still in the balance – Alexander certainly came in for a tough time at an IPPR event this afternoon where he outlined the government’s thinking. The key date is 27th June, when negotiations are likely to conclude.

Brand promises & customer experiences…It’s fair to say that financial institutions have endured something of a reputational rocky patch amongst consumers. Many customers have been disappointed with the service they’ve received, coupled with poor products and several miss-selling scandals – a fact highlighted by this week’s episode of Panorama.

Thankfully it seems the industry is finally beginning to wake up and adopt a much more consumer oriented approach. Nick was lucky enough to be able to attend an event at the Financial Services Forum examining the relationship between brand promises and customer experiences. One of the central themes that emerged from the discussion was that a brand is not represented by a new logo or slogan but by the 1000’s of gestures made by the business to its customers across the world every day.

Every interaction is a chance to reinforce the business’ brand values and this needs to be recognised throughout the entire customer journey. Managing expectations coupled with the odd piece of exceptional customer service can go a long way! It was refreshing to see such a detailed deep dive into the lives of the consumer and what struck me was the extent to which experiential brands such as Alton Towers, Emirates and Walt Disney are streets ahead.

Their whole proposition is built around the consumer experience and they understand the importance of recognising this at every level. With regulatory bodies also placing unprecedented levels of scrutiny on consumers rights, perhaps many of the UK’s biggest banks should take a leaf out of the books of Mickey Mouse and Pluto. A smile and a genuine belief in the brand you represent seem key.

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FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/06/166/ http://blogs.hillandknowlton.com/shocksandstares/2011/06/166/#comments Fri, 10 Jun 2011 17:34:24 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=166 Hello All, and apologies for a slightly late Financial & Professional Services Friday Fiver this week, but we’ve all been a little hectic. To round out the week we bring you banking, more banking, an Archbishop and Blackpool football club. Happy weekend all!

The Big Four Banks feel the heat….The big four revealed deep divisions on restructuring at Wednesday’s treasury select committee appearance as their CEOs jockeyed for position with the powers that be. Stark divisions were revealed on the Independent Banking Commission proposed scope for ring fencing core retail banking functions. RBS’ Stephen Hester alluded to the “moral hazard” problem if government effectively insulated the market, which could perversely encourage excessive risk taking, a view supported by Barclays.

In contrast, HSBC and Lloyds support a broader separation and more diverse mix to encourage the much needed supply of credit to the market – note the Q1 figures which reveal banks failed to stay on track with “Project Merlin” pledges.

Vince Cable - back on the banker bashing trail this week (image from Telegraph.co.uk)

Finally, Vince Cable rattled the sabre again, unveiling a not so “veiled threat” to link bank bonuses to SME lending! Will this create the required traction on this fragile detente between the City and the Government? Watch this space, but maybe don’t hold your breath.

Anthony Hilton digs in his heel as well…At the same time as surviving a tough session in Westminster, Barclays came under fire from the Evening Standard’s Tony Hilton. While CEO Bob Diamond was claiming to Parliament that his bank had been a “stabilising force” in the crisis (though some might argue the Middle East was the real ‘stabiliser’), Hilton was taking aim at his finance director for something called ‘Project Protium’.

Barclays and the Cayman Islands - source of Anthony Hilton's wrath this week

This essentially involved hiving off some of the bank’s toxic assets to a Cayman Islands registered company in a neat little trick to reduce losses on the company’s profit and loss account when the assets turned sour. It’s fair to say Hilton really went for the jugular on this one. The moral of the story? If he writes something once and you don’t like it, be prepared to read it all again two days later if you complain about it.

The Archbishop caused a stir too…Rowan Williams stole Prince Phillip’s thunder whilst acting as guest editor of New Statesman this week, using an article to heavily criticise the Coalition and its policies. He argued that ‘we are being committed to radical, long-term policies for which no one voted’ thereby questioning the Government’s mandate to govern.

Was he right? Probably not. As Defence Secretary Liam Fox pointed out, ‘the Government has legitimacy because it has a majority in the House of Commons.’ Whilst some policies have undoubtedly been rushed, a Government is elected to make decisions and lead a country, and it’s fair to say the Coalition is certainly doing that – despite clamours for the Chancellor to adopt a plan B, he presses on resolutely.

As businesses need strong leadership and clear direction, we need our politicians to show equal virtues. Questioning the Coalition’s mandate is much like Donald Trump and others questioning Barack Obama’s place of birth place and therefore his right to be President; an unnecessary distraction from a much more important job at hand.

Boom, Bust or Blackpool…Is it us or is the world of football slowly going mad? We say this having recently read an article on Deloitte’s annual Football Money League. We’re no experts on the ins and outs of running a football club, but GCSE maths and a pinch of common sense tells us that paying your staff more than 70% of your total revenue in any industry is a bit iffy – as our colleague Nick puts it, the desire for a couple of extra places up the league table “seems to me a bit like financial Russian roulette”.

Blackpool gambled and won promotion - others have been less fortunate

We’ve already seen Portsmouth fall spectacularly from FA Cup winning glory to administrative collapse. With wages still increasing it may not be long before other Premiership clubs follow suit. One could argue Uefa’s Financial Fair Play Initiative is a step in the right direction but for us the danger lies in clubs trying to establish themselves as a prominent Premiership force.

Football governance should improve and a lot of lessons can be learned from the world of business. Just as CEO’s have a responsibility to their shareholders; boards, managers and players have a responsibility to fans. I’m sure if you ask most Bolton fans whether they’d rather finish 10th and risk financial meltdown or 14th and still be here in twenty years most would take the latter. We know Nick would!

Demystifying Digital…Finally, H&K this week held one of our regular ‘D2′ events aimed at tackling and understanding the digital world. Our very own Nick Woods presented on how financial services brands can engage in this sphere, highlighting the work we do with HSBC International Bank. We’ll have more on this next week for you, as will the main HanK blog but in the meantime congrats to Nick on a cracking presentation.

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FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps-friday-fiver-5/ http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps-friday-fiver-5/#comments Fri, 27 May 2011 19:49:23 +0000 Edward Jones http://blogs.hillandknowlton.com/shocksandstares/?p=145 In case you missed it, President Obama was in the UK this week to talk essential relationships, cyber crime and have a barbeque in the Number 10 Rose Garden. In honour, of his visit this weeks’ fiver looks at the visit and the UK’s special essential relationship with the US.  Thanks to Dave, Clare, Rachel and Melanie for contributions.

Essentially …

Whilst Foreign Policy and the six point plan, were the main items on the agenda, surely the most interesting aspect of Obama’s visit was the upgrading of the UK’s ‘Special Relationship’ with America to an ‘Essential Relationship.’ Essential. Never mind our credit rating, we have an essential relationship with America! As Matthew D’Ancona pointed out earlier this week, it has a certain ring of indispensability to it. I’m less sure Obama’s deficit reduction plan can be described as Osbornian, as D’Ancona suggested, but you have to hand it to Cameron he pulled the rabbit out of the hat with that one.

Deficit indifference

Governments should “live within their means” but also sustain growth by investing in education, and the pace of deficit reduction “may end up being different”. Uncritical certainly from the President, but hardly the ringing endorsement David Cameron and George Osborne were hoping for with regards to their economic strategy.

They were probably also hoping for better revised Q1 GDP figures from the ONS than the ones that materialised this week at roughly the same time as the meat was cooking on the barbie. Traditionally, the revised figures show an increase in GDP for the quarter over the first, partial set of figures released. That didn’t happen this time, with growth remaining at 0.5%. More worryingly, household spending contracted 0.6% and business investment practically hid in the corner shivering, as it shrank 7.1%.

The Government remains committed to cutting hard and fast in order to shrink the deficit and get the country back on track without a large credit card bill hanging over it. Judging by the economic data and reaction to it, the jury is still out on whether this will work or not – which is perhaps why the President hedged his words to such effect.

Inspiring relationships

Michelle Obama re-affirmed her own ‘essential relationship’ with old friends during the visit when she was re-acquainted with girls from Elizabeth Garrett Anderson School. The EGA girls were visiting Oxford University as part of a programme to encourage them to aim high. Mrs Obama, herself a graduate of Princeton and Harvard, encouraged them to not “be afraid to take risks, ask questions, ask stupid questions, don’t be afraid to trip, fall and don’t be afraid to get back up.”

Wise words indeed from the First Lady and something all of us can take heart from. Media coverage of the meeting praised her as an inspiring role model for these young girls. But do our young people need to wait for a visit from a foreign leader’s wife to feel inspired? It strikes me that inspiration comes in all sorts of guises from dignitaries to teachers, to a school system and society that encourages successes achieved on merit. I cannot help thinking that more of our young girls would be inspired if the education system were fairer and society willed them on.

However, today’s announcement that under radical changes to admissions, some secondary schools will be able to select pupils on the basis of family income fills me with dread. If we want to inspire our young people, there has to be a better way than judging them on their parents’ finances.

Right all along?

Photo: Jacob Whittaker

There was a time when being British was all about keeping a stiff upper lip through adversity.  We were a bit stuffy, grumpy, and proud of it (with the exception of Ken Dodd). But if this week’s stats from the OECD are to be believed the old stereotype has been blown out of the water – we’re actually much happier than most of our European neighbours, including those where the weather is supposedly much nicer.

Of course our BFFs across the pond are way ahead, with the ‘pursuit of happiness’ in their constitution, but recent events have given them a run for their money (Will & Kate, less than a year to go to the Olympics, plus some cracking Aviva (client) sponsored ITV dramas on the telly).  Even Obama seemed to be using his visit to the UK to give a PR boost to the start of his election campaign, after all the yanks did seem to love the Royal Wedding more than we did.

Cheeriness is starting to look like part of a new national character, even a driver of government policy with the government launch of a new way of measuring it earlier this year.  Yet whilst the OECD’s figures do seem to suggest that money doesn’t necessarily make you happy, it will be interesting to see whether the next GDP figures show it can work the other way around.

Obama and the ostrich generation

When all the fanfare and noise from the military 41 gun salute to welcome Obama’s visit abates, we hope that the two leading western premiers might spare a thought for the lot of their respective domestic pensioners. They don’t need to look hard or delve deeply to find incontrovertible evidence of the pensions malaise and bleak future that faces many prospective pensioners in the UK and US and indeed across most Western economies.

The worrying statistics roll in on an almost daily basis. According to an international survey released by HSBC this week six in ten Britons have no financial plan for their retirement – due to a “cycle of dependency” and suffer from an equally self-deluded belief that they will enjoy a comfortable retirement.

Across the Atlantic, prospects are equally stark in the US. New findings from the American Association of Retired Persons (AARP) latest public policy institute report reveals that many older Americans, employed and unemployed, may never recover financially from this latest recession, although here, half of them do actually realise that they won’t have enough money to live on in retirement.

This dearth of planning contrasts with upcoming economies in the East, where a class of “prosperous pensioners” is merging. The respective expectations on annual growth showing  further downward revision for the UK economy (now a paltry 1.4%, with the US at only 2.6), is in stark contrast to buoyant growth rates in Asia’s flagship economies – China 9.2%, India 8.5%.

Worrying indeed.

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FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps-friday-fiver-4/ http://blogs.hillandknowlton.com/shocksandstares/2011/05/fps-friday-fiver-4/#comments Fri, 06 May 2011 13:22:55 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=104 Yes, it’s back. After a break for the Easter holiday, some glorious weather and that dress, we return with the Financial and Professional Services team’s Friday Fiver. We also have a fresh contributor this week, our new regulatory and government expert, Melanie Worthy. Other pieces this week come from regulars Ed Jones, Ross G, Karen and myself.

Crunch time for RBS and the FSA…The Treasury Select Committee and the FSA announced this week that they’ve asked City heavyweight Sir David Walker and lawyer Bill Knight to conduct an independent review of the report the FSA is producing into the failure of RBS. They will examine whether the report fairly reflects the findings of the FSA’s investigation of RBS, as well as analysis of its own regulatory activities.

Sir David Walker - charged with reviewing the demise of RBS (image from guardian.co.uk)

Walker’s unique attributes of being both a credible City figure plus a trusted Government adviser make him an obvious choice for the role. His track record helps too – he has headed Government enquiries, such as in 2009 when he examined governance at the big UK banks.

Just as well then, as he’s going to have his work cut out. However “complex” the issues were, as the FSA cites somewhat reluctantly, there will be strong media interest and expectation for answers as to the causes of RBS’ demise; the excessive cost to the public purse from bailout; and the wider malaise that played out across the banking sector as the financial crisis ensued.  Whilst Walker and Knight tread through a minefield to avoid the legal conflicts to RBS employees, they’ll be mindful of the need to show teeth and forensic review on both sides of the regulatory fence.

Nick Clegg – Stick or Bust…Most observers of the Westminster Village Ed’s spoken to in recent months have agreed on one thing: May 5th and the outcome of the AV referendum will determine the fate of the Coalition Government. As we’ve said previously, the fates of Nick Clegg and Ed Miliband appear eerily interlinked, with success for one leading to failure for the other. It seems neither will come out of this episode particularly favourably though.

It's not been a vintage week for Nick Clegg

Judging by Chris Huhne’s recent outbursts, it would seem to look more terminal for Nick Clegg, and Ben Brogan was on to something this week when he said Nick Clegg’s body language in PMQs was ominous.

Cameron, demonstrating his exceptional political judgement, was keen to move the story on and talk up the other important work the Coalition has set out. But where can it realistically go from here? If Lords reform is offered as a carrot to the Lib Dems to carry on, it’s highly likely a similar demoralising defeat will occur on it. On the flip side, Lord Knight’s suggestion that an early election to deliver the Conservative’s a majority is intriguing, but given the barriers against this, difficulties over NHS reform and the current state of the economy, this would appear wide of the mark.

Where else can the Lib Dems look?…Given the loss of 300 council seats and a probable resounding no to AV, what will be telling in the coming days is how the Lib Dem rank and file respond to defeat. Paddy Ashdown has already launched an attack at David Cameron, and Clegg may well be hoping that this and other attacks distract party members from aiming their wrath at him.

Clearly, Clegg is going to have to secure some tangible wins for the Lib Dems in order to quell the growing frustration. With this in mind, he may seek to increase the fight for a greater say on health reforms. The Health and Social Care Bill should allow for greater private provider provision of health care, but the extent to which the Tories have wanted to pursue this has caused unease amongst many Lib Dems.

The current pause in the process of passing the Bill and now the increased chance of Lib Dems demanding changes means that private equity firms are going to be increasingly turned off due to the levels of uncertainty around private provision. If the Lib Dems decide to really dig their heels in, private equity firms could lose out on what previously looked like a sure investment.

Exchange-Traded Funds – the current big thing?…Earlier this week, we enjoyed a fantastic training session with David Yates from Finance Talking. One of things he focused on was the growth of ETFs in recent years. Financial News picked up on this point earlier this week as well, noting the recenty outflow of money from four of the five largest asset managers and into ETFs – the magazine claimed $41.4bn of new money was poured into ETFs in Q1 2011 according to Blackrock.

Not everyone seems convinced though. In today’s FT, Gillian Tett examined the boom in this market, and argued that concerns are building amongst regulators about it. While not as inherently dangerous as the pre-2007 fad for ‘CDOs’, she did note that there are some striking parallels here. Clearly, others are still a big fan of them though, as FT Alchemy notes today.

This week's Big Bite was all about the future

Learning about the future…The exciting guest for this week’s FPS Big Bite was Patrick Harris from The Futures Company. He gave us some great insights into the world of futures and left us with an interesting and thought provoking debate.  As Patrick pointed out ‘the future is all around us, it’s just not evenly distributed’. We hope that gets you all thinking as much as it did our team!

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FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/04/fps-friday-fiver-3/ http://blogs.hillandknowlton.com/shocksandstares/2011/04/fps-friday-fiver-3/#comments Fri, 15 Apr 2011 17:24:07 +0000 Edward Jones http://blogs.hillandknowlton.com/shocksandstares/?p=79 Nearly the weekend. First, here is this week’s Friday Fiver…

Thanks to DC, Daisy, Rachel and Nick for contributions.

Is the economy looking up?…

Economic figures this week were better than predicted, but is this just a pause for breath before the storm?

Here’s a question for you. If GDP growth is so flat (or even in reverse as it was last winter), then how can it be that unemployment fell according to the latest figures? Wednesday’s announcement from the ONS stated that total unemployment was down from 8% to 7.8%. Here’s another question for you as well. If global commodity price rises (particularly food and oil) are showing no sign of slowing down, then how can it be that inflation fell against most predictions according to the latest figures? The ONS’ figures on Tuesday recorded a drop in the Consumer Price Index from 4.4% in February to just 4.0% in March.

So what’s going on? Well, the fall in unemployment was definitely welcome, but it may be shortlived. The reason for this is the continued fear that new jobs created in the private sector may not be able to keep up with the large redundancies likely being made in the public sector as the government trims spending – it’s a bit like pouring water into a bucket at the top, and it flowing out through holes in the bottom; the problem is, we can’t pour water in fast enough.

And on inflation? Well, it turns out that we can thank retailers, and especially supermarkets, for the slight fall in inflation. According to the ONS, the level of discounting by shops is at an all time high as they try to maintain the flow of customers in through their doors (this might explain why my local Co-op has been running a 50% off wine promotion almost non-stop since Christmas). The question is, how long will these promotions continue to entice consumers? Especially when growth in wages continues to lag behind inflation, reducing the amount of disposable income we have to spend on the high street.

AV your say…

It’s not been a good week for the No to AV campaign with a survey revealing nearly half of the electorate supports the alternative voting system.  The controversial ad campaign warning us that if we vote Yes soldiers and babies will die or, according to Baroness Warsi, make us complicit in the rise of British nationalism, hasn’t deterred 45% from saying they would vote Yes.

Perhaps they should have opted for the slightly cuddlier celeb approach like the Yes campaign whose leaflet proudly lists off celeb supporters including Tony Robinson, Joanna Lumley, Eddie Izzard, Colin Firth and Stephen Fry. Their involvement in politics may be limited, but something they did has worked if 2,199 voters now put the Yes campaign 12 points ahead of the No camp.

Of course if you are in the No camp you won’t believe these results anyway and will view any survey produced by the Yes supporting think tank the Institute of Public Policy Research (IPPR) with immense suspicion. Or you could use the comically Blytonesque phrase ‘dodgy shenanigans’ to sully the Yes campaigns’ reputation as Mr Osborne did this week- accusing them of receiving more than £15m in contracts from the public purse.  And so the mudslinging continues in what has already been an acrimonious debate (sigh) only three weeks to go!

Journalists follow journalists on twitter. But What do they say?…

Two great infographics. Both covered by the Guardian’s datablog. The first was developed by Tony Hirst showing journalists’ following habits on twitter. The infographic indicates journalists tend to prioritise following their colleagues within the same news outlets.

And secondly, Tweetminster have teamed up with the Guardian to produce this infographic on what the UK Media tends to talk about. All fairly intuitive, but it’s interesting to see it broken down.

Above all else we think they both look great.

What price £ducation?…

In those halcyon days pre 1998, going to Uni seemed so much simpler. No tuition fees, plus those lovely maintenance grants you could blow, unwisely, in the union bar. Fast forward to this week and government adviser Professor Theresa Rees labelled as ‘barking’, the system where what you have to pay for your university degree will depend not only on where you study but also which part of the UK you’re from due to differences in devolved funding decisions.

The Department for Business, Innovation & Skills stepped into the fray on Thursday announcing that higher education students attending 83 of their approved ‘alternative providers’ can now borrow up to £6,000 toward the cost of their tuition fees, in an attempt to boost competition.  This is unlikely to leave the mainstream unis quaking in their boots however, with many willing and able to charge the maximum of £27,000 for a three year undergraduate course (bursaries for the under-privileged aside). Given the overwhelming demand for places at these universities, it will take much bigger market forces to make them more self-conscious about their pricing.

When football club owners go offside…


Sometimes you have to feel a little bit sorry for football managers. Whilst the financial rewards are undoubtedly pretty big, so too are the egos of many of your players, the pressures from unrealistic expectant fans and the chances of stress related heart disease. It’s a tough job at the best of times but in an era of billionaire owners is it becoming even more difficult?

Carlo Ancelotti cut a pretty lonely figure on the touchline during Chelsea’s disappointing performance at Old Trafford this week. You’d think he’d be happy given the fantasy football transfer strategy of Roman Abramovich but it seems that increasingly top managers are having to deal as much with boardroom tactics as they are the opposition’s. Like any group of businessmen, this merry band of football club owners is driven by return on investment and throughout many of their careers they’ve a history of calling the shots and generating success.

However investing in sport is arguably a little bit different. Firstly owners, except in the rarest of circumstances, don’t have the underlying knowledge or experience of their respective team managers. Success is to some extent out of their hands and as a result there must be implicit trust in the owner/manager relationship. Each must understand their role and when boundaries get crossed performance is likely to be compromised.

As in many situations, too many cooks can spoil a broth and when owners start interfering in team selection and tactics even the seemingly most appealing of jobs can slowly begin to look like a poisoned chalice.

I’d imagine the majority of football club owners would be less than receptive to allowing their manager to advise them on what stocks or shares to buy or which emerging market might be best suited to their latest investment strategy. Knowing the strengths and weaknesses of both yourself and your workforce is a fundamental in business and the Roman Abramovich’s of this world could do with a bit of reminder.

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FPS’ Friday Fiver http://blogs.hillandknowlton.com/shocksandstares/2011/04/fps-friday-fiver-2/ http://blogs.hillandknowlton.com/shocksandstares/2011/04/fps-friday-fiver-2/#comments Fri, 08 Apr 2011 14:49:27 +0000 David Chambers http://blogs.hillandknowlton.com/shocksandstares/?p=26 Hello All and welcome to a very sunny Friday afternoon. Before you all rush out of the door to enjoy a much earned drink, here’s our recap of five of the top financial and political stories of the week. Thanks to Jonathan, Ed, Daisy and Ross for their contributions this week.

National destiny…Two weeks ago, Portugal’s outgoing prime minister ruled out the possibility of asking the European Union for financial assistance. On Wednesday, under mounting pressure, a bailout of €80 billion was however requested. What is telling about the run of events is that to a large extent it is not governments that have the ultimate say over their financial destiny but international debt markets, a feeling reflected by Portuguese media, with the newspaper Jornal de Noticias declaring “Yesterday our country succumbed not only to the pressure of the hated markets but to itself”.

Europe's tangled web - a snapshot by the NY Times

For an indication of just how grim things are, note that the sale of short term Portuguese debt issued on April first required a yield of almost six per cent compared to just over four per cent a month earlier. Also on the continent this week, the ECB increased interest rates by 0.25% to 1.25%. Fiscal tightening has begun and the Bank of England will need to consider whether the UK needs to take similar measures in the coming months.

A weak week in Westminster…Earlier in the week Ed opined:

Probably a fair summation of what was going on, and indeed, after Tuesday it only got worse. Nick Clegg, it transpired, had a former intern who was eager to but the boot in. Oliver Letwin, the Cabinet Office Minister no less, hot on the heels of saying he didn’t “want families from Sheffield flying away on cheap holidays” went one better by apparently confirming that the Government would “run out of ideas by 2012“.

Andrew Lansley meanwhile, diligently trying to regain momentum for NHS reform (which has undertaken a “natural pause“) was helped out in the shooting yourself (or colleague) in the foot stakes by Work and Pensions Secretary, Iain Duncan Smith, who admitted that NHS waiting times have soared under his Government.

Unable to keep the lid on IDS or use the brolly on Olly, SamCam appeared to have the blues…

Cheer up Cams - it can't possibly be as bad next week

The savings industry can breathe again…And so it’s over for another 12 months. The great savings rush ahead of the end of year tax deadline has now passed, which means financial advisers, accountants and business owners can afford to breathe a little easier. Many in the personal finance media will probably be looking forward to writing something a little different as well, after four weeks of ISA coverage.

The ISA rush is over for another year

The big issue on the table for savers remains though – the high rate of inflation, which erodes the value of money stored away. It’s proving a real problem, as the Standard argued on Tuesday, though as the Mail notes, there are still good products out there, being driven in part by the desire to retain as well as recruit savers according to some. One other problem remains however – take-up of ISAs remains low amongst the population; something that the newly relaunched Money Advice Service could help address.

What next for Andrew Lansley?…As we mentioned above, the government has taken a pause on NHS reform while it considers its next move. In a statement to the House of Commons, Health Secretary Andrew Lansley promised to “pause, listen and engage” rather than force through the health and social care bill at breakneck speed.

What this week’s climbdown demonstrates is that whenever an organisation tries to redefine, reorganise or change itself, it invariably encounters resistance. That resistance only dissipates when it can be proven beyond doubt that change will benefit those who protest. As Machiavelli said in The Prince “there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.”

The NHS is regularly praised, but also regularly damned, often in the same newspaper article. The challenge for Lansley and co will be to convince people how these changes will benefit them. Otherwise the result could be “pause, listen and disengage”.

The new state pension…Finally, a quick look at the plans unveiled this week by Pensions Minister Steve Webb. Even for those of us who work in this area, the state pension is a fiendishly complicated beast with different levels of benefit paid depending on your work history, level of other retirement income and marital status. In an effort to simplify things, the government has proposed a new, flat-rate pension of £155.

Or have they? Despite a lot of media coverage and hype in the build-up to the announcement, the government’s green paper actually lays out several potential options, only one of which would take this course. The proposal is now open to consultation – expect it to be feisty.

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