City AM Notebook

Patrick Spencer’s City AM Notebook can be found here.

Economic news, jobs, jobs, and more jobs

Waking up yesterday, the big news is from the US as former president Donald Trump was charged with intentionally interfering with the US election result in 2020. Grim news indeed but the more immediate and important story for us over here was the release of economic data which shows UK wages in the last quarter grew at their fastest pace in over two decades. Surely good news?

Not necessarily.

Senior economists suggested it almost certainly means the Bank of England will raise interest rates again. And factor in the latest ONS employment figures – unemployment is up, people out of work because of ill health continues to be a huge problem, and the number of job vacancies fell for the 13th consecutive period – it’s fair to say the British economy is not out of the woods yet.

It’s one of the reasons I have joined the team at a new charity called the Jobs Foundation. After almost three years working as an adviser at the Department for Education, arguing with the Treasury to invest more money in children and families, I decided to leave government and argue for Treasury to do more for the business community.

The Jobs Foundation was set up to help tackle poverty in the UK. But, somewhat uniquely, we believe that businesses are the heart of the solution. Businesses create the vast majority of jobs in Britain, and a job can be the difference for someone really struggling. Time and again during my career in government and the wider policy world, you would come across disadvantaged people in disadvantaged communities that had good schools, a strong local NHS offer and council initiatives to tackle gangs and anti-social behaviour but no good local jobs locally.

Are business people really villains?

We’ve been doing some research at the Jobs Foundation on the perception of business in Britain. Frustratingly it’s not a straightforward picture.

The British public react positively to words like ‘entrepreneur’ or ‘small business’, but less positively towards ‘CEOs’, ‘shareholders’, and ‘corporates’. Most won’t find that surprising, but its concerning when you consider that one in five people in Britain think all businesses are ‘greedy’ and one in six think businesses ‘don’t care about people like me’.

I do not want to mention the two C’s – the CBI or Coutts – but businesses in Britain need to think about how they project their social and economic purpose. Because whatever they are doing now, it is not working.

Of course my answer is simple, stick to your core purpose – providing great products and services, at affordable prices, and creating jobs in the process. Human society has benefitted hugely from businesses that create incredible products and services that genuinely change our lives.

Not everyone is Mr Burns

It’s worth noting that we can be culturally quite down on businesses and businesspeople. We asked ourselves the other day, how often the ‘villain’ in a film is a suited-and-booted business type.

The answer is more often than you realise – Lexcorp in Superman, Skynet in the Terminator, Erin Brockovich takes on super-polluter PG&E, You’ve Got Mail is actually the story of a big corporation taking over an independent bookstore, and of course the Simpsons, where the pantomime villain is Mr Burns.

What I’ve been doing recently

I have two small children under the age of three so it’s been a while since I have been blessed with time to read or watch what I want when I want. But I would recommend reading US economist Noah Smith’s Substack (Noahpinion) or listening to his podcast (Econ 102).

I did enjoy Paul Johnson’s book Follow the Money (although I accept a non-fiction about fiscal policy is an acquired taste), and the wife and I loved Blue Lights on BBC iPlayer.

The kids are in to PAW Patrol at the moment, so I watch a lot of that too.