So David Cameron wants everyone to be given a pay rise. That’s about as sensible a comment as Marie Antoinette’s suggestion that the peasantry rioting about bread shortages be fed with cake instead. Does our Prime Minister have any idea how commerce works?
The overwhelming majority of employment in this country comes from firms with fewer than 500 employees and of that the majority are in firms with fewer than 20 on the payroll. With few exceptions these companies are privately owned, usually by the management. As they struggle with the cash flow problems endemic in a country in which credit terms are routinely abused and often run to over 100 days the last thing they are able to do is add to their working capital problems by increasing their payroll costs.
Profit margins are tight anyway and as most markets are highly competitive the opportunity for squeezing more out of the customer are limited. If additional pay costs cannot be recovered through increased prices profit margins will fall unless productivity increases. Increasing productivity often requires investment, which has ultimately to be paid for from profit. It is clear that Cameron knows as little about how a company works as Marie Antoinette did about baking. This is basic stuff. Cameron’s ignorance of it, in spite of his first class honours degree in PPE, supports the theory that economics is accounting for the numerically challenged.
To be fair to Cameron, he’s not the only political leader in this country whose understanding of commerce is extremely week and whose experience is weaker. Milliband also has a degree in PPE from Oxford (although he dropped the philosophy element) and a masters in economics from the LSE. Since then he worked as a TV researcher and then moved into politics. His commercial experience is even weaker than Cameron’s (Cameron’s father is a stockbroker, Milliband’s a Marxist lecturer). Clegg’s career is slightly better; his degree is in Social Anthropology and he did some work with the European Union. However he has never run a company, or done anything commercial.
So who in the upper tiers of the United Kingdom actually knows anything about commerce? Well the obvious answer is Nigel Farage, who eschewed university for trading on the London Metal Exchange for over 20 years. However there are some others who should be considered, The Royal Family. While they do not have to earn a crust in the traditional sense many of them are involved in commerce. Prince Philip spent 21 years with the World Wildlife Fund and founded the Duke of Edinburgh’s award scheme. Prince Charles runs the Duchy of Cornwall and the Princes Trust. Prince Edward ran a TV Company. Prince Andrew has lobbied hard to support British Exports, Prince Harry crated the Invictus Games and The Duchess of Cambridge grew up in a family that built a company worth £30 million from scratch. Not all of their ventures have been successful but that is not the point. The simple fact is that the most privileged family in the land has a better understanding of and greater experience in commerce than at least 75% of the leaders of main UK political parties.
Clearly in a world where economic policy dominates political activity it is ludicrous that so few or our political elite have relevant experience. The size of the national debt (£23,000 per head and climbing) surely shows the folly of having a leadership whose only commercial knowledge comes from one third of a degree in economics. How we change this is not yet even being debated.
David, Ed and Nick should look perhaps recall the fate of Marie Antoinette, who met her demise at the guillotine. Perhaps they should work for a living. In the interim we should vote UKIP and hope that the ensuing chaos persuades the Queen to dissolve Parliament and run the country directly until politics is cleaned out. At least her family has the experience for the job.