Takeovers, Takedowns and Meltdowns.

Takeovers, Takedowns and Meltdowns.

I woke up this morning with my mind on an old customer whose story I would like to share.  I don’t wish to name names, so, as it amuses me, I will call them Dave, Ed & Nick LLP.   They were a customer for the best part of a decade.  I personally looked after their account and every other day would be talking to their excellent general manager John who ran the show for the owners, taking his orders, sorting out his problems, make sure his supplies and equipment arrived when he wanted them where he wanted them, keeping him happy.  A wonderful chap, an expert (yes, I know expertise is so last year), keeping his employer’s ship on a steady course for many years.  John knew what he was doing.   Sometimes he dropped a clanger or would make totally unreasonable demands and I would be swearing and muttering to myself around the office as I tried to figure out a solution that would get him out of a fix.  I always did and often it cost us money and he wasn’t always as grateful as I would have liked, but he always paid the bills and gave a fair price. Our working relationship was both excellent and mutually beneficial.

Then out of the blue the Dave, Ed & Nick LLP partners all wanted to retire and sell up.  John decided to go to pastures new and his assistant, Ben was put in his place.  We were assured there would be no change, we would have the exact same benefits and relationship with the new permutation of the company.  Of course, the inevitable unravelling started quickly.  The calls from Ben were full of unspoken anxiety and stress, you could almost feel him shrinking in the middle of the circle of wagons as he came under siege.   Their accounts department dragged their feet, Ben’s budget was squeezed, customers started to leave them in droves.  I would have to stop supplies until invoices were paid, never happened before.   It turned out that the new owners were not interested in job creation, or investing for growth, they were not interested in the existing staff or the long history of the company.  They had used lies to keep staff on board.  The prize in their sights was the prime property the company owned which was right in the middle of an area of intense redevelopment for buy to let luxury apartments.    They were running the company down for the cashflow whilst they got a developer on board, which they did.  Within a year the company which had operated for 30 years was dead, redundancy notices handed out.  The plaque on the swish new apartments should read RIP Dave, Ed & Nick LLP you served us well but well, we couldn't be bothered with all that work malarkey and besides we made more money this way.

Why do I tell you this story you ask?  An everyday story of business surely.  Well I am no politician or historian, so I see the world through the lens of everyday life.  I see a parallel in the current body politic. Like my customer it has been broken and taken over by asset strippers and opportunists, people who have leveraged populism to take control.  I am shocked by what has happened in the last 8 years.  The electorate sold its votes to the highest bidders, fed up with stagnant wage growth and self-serving over familiar plastic politicians.  Conservatives under David Cameron bowed to pressure from the extremes within and sold their Tory souls to the UKIP agenda of division and blaming the Other to deflect from the fact that their own policies were woefully inadequate in addressing the post 2008 climate of poor growth and financial crisis.  Now under the cosh of a referendum result which she knows is damaging and makes no sense, May is caught in the death grip of the ERG who are pushing us steadily towards a disastrous Brexit.  The Tory back benchers, mostly remain realists originally, are invested so heavily in the folly of the great Willerthepeople Project that they are refusing to acknowledge we are all at the mercy of a small number of Billionaire disaster capitalists who are pushing their Brexit agenda for personal benefits, the acquisition of money and power, at the expense of millions of people around the country.  These people count their pounds, euros and dollars, whilst most of us will count the cost in pounds, in tax burden, in family lives, in jobs, in closed businesses, in lost family and friends from the EU27 community who are fed up of being depicted by press and politicians alike as a problem rather than a part of our community.  Look at Jacob Rees Mogg talking about the Northern Ireland Border.  He cares not a jot for the ordinary people of the United Kingdom.   Nor does Boris Johnson who has dodged and wavered and lied and twisted direction.  Who would trust him? These people are not our friends, yet they hover malevolently in the background threatening May’s leadership to get their way. 

But what of the HM opposition you ask?  They got a shiny new management too and the launch party was indeed super exciting and remarkable.  People were swept up in the fever of enthusiasm of a new (to them) face who appeared to be speaking so plainly and selling his politics of hope and simple solutions.

Beware though, they are gambling with the Politics of Catastrophe as much as the government is.  They have consistently failed to point out to their constituents what a damaging thing Brexit is.  Most of their supporters know and can see that but these are politically engaged individuals.  The average constituent has no idea and barely an interest in what is in store. The correct responsible response to the referendum result would have been to press for a thorough review of what the result meant, what would be the consequences and if necessary some consensus as to what a desired realistic endpoint to aim towards if it was decided by parliament to trigger the A50. Yet the shadow front bench sat back and let it all happen.  Totally blind, totally clueless they supported the government in triggering the A50.    When challenged they wring their hands.  What can we do?  We have 6 tests.  Will of the People.  Honour the referendum.  We have no say.  Well the six tests have already failed under any kind of Brexit so what now?   What are they doing?  Are they waiting for government to fail and pick up an election win and possibly an opportunity to bring in their own Corbynomics agenda?   

Lib Dems, Greens, SNP, all fully anti Brexit but unless we live in Scotland it’s difficult to feel our remaining options will get us very far, especially given the continuing hostility shown towards the Lib Dems by Labour and their refusal to work together with them effectively against the government on Brexit.  Perhaps we should all move to Scotland.

Young people have been shafted so much by Tories  they will not be joining any time soon in big numbers.  Labour membership Is at healthy levels, but the writing was on the wall for me personally during the 2015 leadership election.  I saw long and frequent threads on Twitter and Facebook filled with vitriolic diatribes towards Yvette Cooper and Liz Kendall and a little to Andy Burnham.  Liz got the worst of the abuse.  This was from so called labour members and supporters.  I see some of the same twitter accounts to this day in nasty aggressive threads about anti-Semitism or Brexit telling people to go away and vote tory and how they are responsible for people dying at the hands of Tories by being critical of labour strategies.  I left Labour because of Brexit, but to be honest I heaved a big sigh of relief that I no longer have to be embroiled in these kinds of internal discussions.  They started the tone with this level of aggression towards dissenters and are surprised that it has now come back to bite them in a very public meltdown being covered in the news.  The internal language of labour is now toxic to its core.  I don’t think I am the only one who has been totally turned off by this nonsense.

The Body Politic is broken.  All parliamentarians have contributed to this either by their actions or inaction and it is parliamentarians who must fix it.  New alliances between sensible minded MPs and Peers and MEPs REGARDLESS OF PARTY who believe in doing the right thing need to be forged using their agreement on the Brexit issue to try and defeat these extremes who between them are driving us to the disastrous consequences outside the EU as a third country.  But it’s not just about Brexit, these alliances must push back against the wider implications of these extremes which are creating a political landscape of intolerance, where debate has been replaced by gaslighting and dog whistles and the abdication of personal responsibility.

All I can do is raise my one voice to MPs and potential MPs and say very clearly whoever wants my vote in the future will have to prove to me they have earned it by showing the courage and good sense in standing up right now against this disastrous attempted takeover of UK Plc by ideologues, fools and Wreckers.

I hope you will all use your voices too.

@redalphababe

Painting Brexit By Numbers

A Handy Guide
Zero, cero, zéro, null, nada, zip, zilch.  This is the number of plans that the Brexit designers and implementors had before the referendum, after and even now with only 229 days to Brexit day at the time of writing.  40 years of thinking and they came up with … ONE BIG FAT ZERO.  There was and is no plan.  Chequers agreement was the “almost” plan, a dead hatchling – it was a plan they all agreed to but none of them wanted and was full of things they knew the EU can’t actually agree to.

ONE hour is the amount of time MPs are allowed to view the secret Brexit Impact assessment document entitled EU Exit Analysis — Cross Whitehall Briefing, dated January 2018 which sets out the cost of Brexit under different scenarios. There is great security around the document, MPs are not allowed to take any electronic devices in.  Part of it was leaked early this year and here are the much-publicised numbers for the regional assessments.  

	DROP IN GDP
REGION	EEA MEMBERSHIP	FREE TRADE AGREEMENT	WTO (NO DEAL)
London	<1%	5.0%	8.0%
South West	1.0%	2.0%	5.0%
Yorkshire/Humber	1.5%	4.5%	7.0%
South East	1.5%	5.0%	7.0%
East of England	1.5%	5.0%	8.0%
East Midlands	1.5%	5.0%	8.0%
Scotland	2.5%	6.0%	9.0%
Wales	1.5%	5.0%	9.0%
North West	2.5%	8.0%	12.0%
Northern Ireland	2.5%	8.0%	12.0%
West Midlands	2.5%	8.0%	13.0%
North East	3.5%	11.0%	16.0%

As the sharp-eyed without Brexit Beer Goggles amongst us can see, the regions which voted most heavily to leave are amongst the ones with most to lose under all scenarios, the regions in fact who have had the greatest benefit from EU funding and EU membership.  I wonder will those regions be helped in our glorious new isolated world?  Well Tory track record on helping regions is not great as any of us who lived through the 80s will attest.  I will just leave that thought dangling. 

TWO.  That's the number of days it took for Leave promises to start melting away, like an ill thought out unicorn shaped ice sculpture at a fancy Mediterranean wedding that doesn’t even make it to the speeches in one piece. For many of us, its continuous dribbles and drips of absurdity have created a kind of hideous Chinese Water Torture we wake to every morning.  It’s also the number of years it has taken for the “sunny uplands” to have been abandoned and instead an enticing era of “adequate food” has been conjured up for our delectation.  Even Leave proponents now admit Brexit will cause us damage.  A certain Mr Rees Mogg even surmised in an interview it could take 50 years of pain to get to his great vision of nirvana.

FIVE WAS Britain’s rank in the list of the world’s largest economies.    Phillip Hammond confirmed a slide to 6 in his budget speech November 2017.  As confirmed recently by Mark Carney of the bank of England we have moved from being the fastest growing economy pre referendum in the G7 to the slowest.  The best estimate is that the prospect of Brexit especially the version of it favoured by the ERG fanatics has knocked 2% off what our growth rate would have been without Brexit.

Our recovery after the 2008 banking crisis was painfully slow thanks to a government strategy that concentrated too much on cutting costs, encouragement of investment in property which does not create jobs and not enough on growth strategies and investing in job creating industries.  Brexit knocked us back just at the point we in the business community had painstakingly pushed that elusive ball of growth back up to the top of the hill - and we haven’t even left yet.

TWENTY TWO is the number of months since Mr Fox tried to emulate his animal namesakes and cunningly declared we would use our EU27 citizens as negotiating fodder.  There are many more questions than there are answers.  Some have already voted with their feet to end uncertainty and taken up opportunities in the EU27.  A German friend who has now decided to take UK naturalisation to secure emotional and actual investment here, told me he was very angry.  He could have looked to America or Canada for bigger opportunities in his field but FOM fortunately brought him to us. By voting leave you told these talented young Europeans we don’t want them and we don’t like them. Spare me your cries of “but I didn’t mean those kinds of immigrants”.  One day they are our equals the next day they will have to ask permission to remain in their homes.  No wonder the NHS reports chronic unprecedented staff shortages and difficulty in replacing those leaving. 

The British in the EU have even less information.  What will happen with their access to healthcare, pensions, voting rights, the right to move back to the UK with non-British or non-EU spouses or children or parents? What about the right to move to another EU country in the 27, will they be landlocked?  Will their UK qualifications in their respective fields be valid in the country they are in? Will being outside the single market for services and the digital single market have consequences on their cross EU work?  Tell me how people can make significant plans for their family lives if there is a big dark wall of mystery surrounding their rights and status? Answers on a postcard please.

FIFTY EIGHT is the number of Sector Analysis reports that David Davies claimed had been prepared.  I just couldn’t resist reminding you all of this bizarre and mendacious display from our prominent politicians.  At first, it was a big secret, for Brexit Department eyes only.  After some pressure in December 2017 Mr. Davies finally admitted they were a figment of his department’s imagination.  Mr Davies stopped short of blaming the dog for shredding his homework.  In these bizarre times, it seems that just ignoring being caught out in a whopping big lie is effective in getting away with it.  But why should I be surprised? Are these not the same people who came up with the genius scheme of painting lies and false promises on the side of a bus?

ONE HUNDRED is the number of constituencies who voted Leave and have now switched their support to Remain in a recent comprehensive analysis of polling data by Focaldata.   Most other leave voting areas have now narrowed the gap. 

ONE HUNDRED THOUSAND are the minimum estimates of the crowd at the March for the People’s Vote in June.  It is thought the numbers were much greater than that but regardless,  I was proud to be there in the sea of blue and gold stars, a swell of people determined to bring common sense back to our lives and put an end to this bizarre act of national self harm. 

FOUR HUNDRED AND FORTY NINE THOUSAND AND SEVENTY NINE POUNDS was the overspend found by the Electoral Commission to have been committed by Vote Leave.  Vote Leave broke the Law and has been fined and BeLeave also broke the law and Darren Grimes has been fined accordingly for his part.  The overspend would have bought a lot of clicks on Facebook in the last two weeks of their campaign which is when they spent a large amount of budget.  The DCMS Select Committee published the Facebook ads placed on Facebook by the Leave campaigns through AIQ in the EU referendum. 45% of them were spreading an anti immigration message.   The ads are a mix of scurrilous dog whistles, lies and distortions.  Some of them do not even have the campaign’s branding so people wouldn’t have known who was serving the ad or indeed that it was an ad.  

Most of us remainers didn’t see the majority of those ads because they were carefully targeted to get a certain portion of the vote out or to collect accounts who would be good targets for such propaganda.  Additionally, it turns out the campaigning by Vote Leave continued during the days after the murder of Jo Cox by a far right supporting man, when all campaigning was supposed to be suspended as a mark of respect.

This whole murky world surrounding Vote Leave, Be Leave and other campaigns, relationships with Cambridge Analytica, links to Russia etc calls into question the validity of the final result given the slim margin.  The excellent and heroic Carole Cadwalladr has chipped away at this illegal activity for 2 years bringing us the truth little by little.  I would recommend a review of her extensive writing on this complex subject.

SIX HUNDRED AND SEVEN THOUSAND AND NINETY TWO is the number of people who have signed the Independent petition for a final say as of writing.  You can watch the new signatures ticking in. The petition was only started on the 24^th July. 

THREE MILLION & ONE POINT THREE MILLION.  These people all come at the top of my list of Brexit concerns having  people close to my heart in both situations.  None of the 3 million EU27 citizens were given a vote and many Brits living in the EU were also disenfranchised.  If you voted leave YOU have affected the lives of these people. They have been left in limbo for 2 years with little idea of how their lives will be affected.  Worse still they have been unashamedly used as leverage in negotiations by British politicians. Dehumanisation of foreign born people has been a strong feature of the last few years.  Scandalous Vote Leave facebook ads were targeted at people most likely to respond to anti foreign sentiment.  Politicians have spoken about FOM and immigrants as if foreigners a problem and never an asset.  Tabloid headlines smeared  and sneered at fellow EU citizens for years.  An incredibly shocking extension to this is the apparent abandonment of any feeling for the plight of British citizens stuck in a state of uncertainty.  “Why should we care, they moved abroad.   It’s nothing to do with us” I hear.  It seems along with voting leave, people voted to banish empathy from their hearts.

SIXTEEN MILLION ONE HUNDRED AND FORTY ONE THOUSAND, TWO HUNDRED AND FORTY TWO  people voted to Remain
SEVENTEEN MILLION FOUR HUNDRED AND TEN SEVEN HUNDRED AND FORTY TWO  people voted to Leave
THIRTEEN MILLION registered voters did not vote at all

I know how you feel my friends,  but we can’t avoid these numbers, we have to look at them squarely in the face.  Leavers, you are right, you won we lost.  So why are you still so angry and confused?  If it makes you happy then why are you so mad?  Why do you hurl abuse at those who would hold you to account for your referendum promises and the law of the land and why do you tell judges and parliamentarians they are traitors?  Is it because you know how intrinsically weak the numbers are, how fragile the margin is?    Only 37.4% of registered voters voted to leave the EU.  What did they vote for?  It’s all so mysterious like an Agatha Christie novel – so many motives for bringing a disaster to the door of the UK.  Some say they want to crash out without the single market or the customs union, some want the EEA, EEA plus or minus or Canada whatever, some just wanted to give Cameron and London a good old-fashioned kick in the nuts.  Some believed that £350 million more pounds would be sent to the NHS every week because a big red bus said so.  Many wanted rid of foreigners.  Yes, they did, don’t argue, in bigger numbers than we would like.  Leavers, that is something you have to face up to and look squarely in the eye.  That’s on you, not us. 

Numbers are essential for our everyday decision making in our little business so I am used to following them.   It's clear to me the Leave margin is fragile and that the British public opinion is moving towards the view we should take the time to think again.  Is leaving the EU really such a good idea given what we have now learned?  

Really?  Here is a handy checklist of questions. 
You want to be poorer?
You want to make your neighbours poorer? 
You want to send all your EU doctors and nurses away because they feel unwanted? 
You want to get rid of the consumer and market protections that EU membership brings just as they battle against price fixing and cartels on our behalf and focus on finding cooperative solutions for aggressive tax management by global companies. 
You want your children to miss out on the fantastic opportunities FOM gives them for their lives, their education, their jobs? 
You want to limit your own chances for a little travel or a spell living abroad later in life in one of 28 countries where you can access healthcare and your pension and all the other reciprocal benefits we enjoy as EU citizens? 
You want your region to lose its EU regional funding? 

Is this what you want?

If your answer is yes, I don’t believe you.  

Democracy is not a snapshot of the will of the people in a particular moment.  It's not a single answer to a simple question about a  complex 40 year relationship with our trading partners and friends to be interpreted as a decision cast in stone when the evidence shows what a bad decision it is.   If that were true women would not have the vote.  Hell, if that were true, not even working class middle aged white men would have the vote.

@redalphababe  #brexit #peoplesvote #stopbrexit #finalsayforall #eureferendum

A Life in Business, Tomb Raider and Brexit

I sometimes think a life in business is like playing Tomb Raider.  It’s a strange analogy, I know.  Having spent more hours than I should have sneaking onto my son’s computer in the noughties there are some similarities so bear with me whilst I try to explain my logic.

When you start, the first couple of levels seem easy.  You are well signposted, there are plenty of instructions, there’s lots of information available to guide you and give you some clues about which direction to explore in.  You can, if you have been cautious, afford a few false starts before you have fully committed yourself heart and soul into the game ahead.  Most importantly, you get a huge buzz out of every problem you solve and feel happy as you work your way up, around and through and over all the obstacles towards your goal.

It’s not long before you get on to the harder levels.  There are fewer pointers here. You have an idea of where you want to go but in the words of Oasis, “all the roads we have to walk are winding, and all the lights that lead us there are blinding “.   Every new level brings with it unfamiliar territory. The problems are harder to solve, the obstacles trickier. There are sabre toothed tigers and baddies with pistols around the corner threatening to end your game. Along the way you acquire new skills and weapons.  You make mistakes you lose a life you try again having learned from your mistakes.  But here is where the analogy departs for a while because suddenly your business is your life, it has become  almost your entire life and now you are immersed the consequences of the decisions you must make are very real.   

I am not an academic or an expert or an economist.  All I can offer are my personal thoughts having been a co-director of a small business for 20 years.  In fact, I have been involved in small businesses since I left university in the late 80s.  During all those years we have seen many things. I have experienced dealing with bailiffs at the door and conversely been in the fortunate position of being able to help when others were at a similar low point. There have been times when we had to sell everything we could to help us through cash flow squeezes or borrowed heavily on credit cards to make month end and times when making money was easy and we have been able to happily reinvest in the business to expand and move it forward.  We have had the privilege of building a team of people who do their best for us every day. We have been able to borrow to invest and taken many risks and chances, always calculated but sometimes dicey even so.  Some paid off some did not.  This is life. We make decisions, some are right, some are wrong, some work out, some not so much.  Just as in a computer game though, we only have so many business lives.  Unlike Lara, we can’t reboot and replay the game once all our chances have gone. 

 

Summary of stats on business numbers from Briefing paper number 06152,
28 December 2017 Business Statistics, House of Commons Library

Here is the thing I have learned.  However stable a business is, nearly all companies are really only 3 to 6 months away from annihilation.  From time to time paperwork will cross my desk from a liquidator winding up a customer or supplier and I always notice the same thing.  The implosion after the crisis point is pretty dramatic and rapid.  

There are several reasons why a crisis can occur.  Bang - a change in government policy.  Slap - a loss of an important contract. Biff  - the most profitable product is now out of fashion.  Punch - a miscalculation of stock.  Crash - a sudden dramatic move in currency exchange rates. Kick - a rise in interest rates when over-borrowed.  Zap - a stupid misjudgement on an expansion plan.  

This is not an exhaustive list but any of these things can happen to any SME with fatal consequences for their business.  The liquidators move in.  Suppliers switch to self-protect mode.  All the value everyone thought was there ebbs away and dissipates like Lara’s energy bar, as the customer base drifts off to competitors, stock is marked down, customers find reasons not to pay their outstanding bills and the accountants and bankers who make their living out of the dead bones of SMEs take their cut.  Long standing contacts distance themselves uncomfortably, embarrassed to admit a superstitious fear that failure could be catching.   I look at the updates from these liquidators and I shake my head with sorrow as it could be any of us.  I doubt I am the only one who sees it this way. 

So you see, the life of a small business is  fragile.  We plan, we build reserves, we look at the prevailing conditions, the things out of our control, and we try to make sensible decisions, we hedge against our vulnerabilities where we can, we look for opportunities to get ahead and hope they pay off.  Here is where I come around in a roundabout way to Brexit.  The fragility of SMEs means we are heading for some extremely difficult times with Brexit looming. Remember my list of potential obstacles?  Well for a proportion of the 5.7million SMEs and even some of the large businesses, Brexit, any flavour of Brexit on the menu, will mete out a number of those blows simultaneously.  The companies affected won’t so much be rolling with the punches as knocked unconscious before they have had a chance to even buy gloves.  We could do some contingency planning, we are doing what we can, but when there is a finite amount of time and resource and personnel we need to know roughly what we are planning for otherwise we may as well just buy a lottery ticket.  

If you voted Leave, you - yes I do mean each and every one of you -  have helped to put my business in harm’s way, but not just mine.  A great many SMEs will face existential challenges because of a direct effect on their EU sales, disruption in the supply chain, an increase in their input costs or less directly because of a downturn, which will most definitely come, leading to cuts in their customers spending in the short to medium term.  2 years on and I still have not seen a convincing reason which explains why we are voluntarily following this insane path.  There is no benefit to me and mine, my staff or my business and after asking the question multiple times, nobody credible has ever been able to cite a specific example of a benefit to my business or my life.

My partner and I are both from working class backgrounds, we started out with no contacts and no capital but lots of bravado.  Over the years we have adapted, diversified  and changed our business model to suit changing business environments.  We have battled and fought and sought the tenacity we needed to keep ourselves in the game.  We have reinvested our profits, taken chances, learned from our errors, some of them bad ones.  Some days I look at the uncertainties ahead and the idea of giving up, selling what we can and going away somewhere regardless of the consequences crosses my mind for a moment.  But I know we are not quitters and we will fight on, one problem at a time, one obstacle at a time.  

For many in business however, Brexit might just become like one of the nightmarish corridors in Tomb Raider Level 20 with the jets of fire, a sword of Damocles and a giant boulder rolling behind.   There will be too many obstacles coming together in too short a time to negotiate successfully and no amount of stockpiled medi-packs will get us through to the next level.  Don't be surprised if some players decide to just quietly turn the computer off and take up yoga.  

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