Feel our pain, say the nation's employers; see how we're suffering. The Confederation of British Industry, gathered in Manchester, claimed that business is being unfairly targeted by the government. Employers, it says, have coughed up £47bn in extra taxes since Labour came to power in 1997. This is a bogus statistic.
For a start, it includes £18bn of tax not yet paid. The CBI - presumably in order to come up with a suitably big number - has counted three tax years into the future as well as five tax years already gone. Peer deeper into the methodology and the claim is even more suspect. Of the £47bn of extra tax, £39bn is down to just one reform: Gordon Brown's decision in 1997 to tax dividends paid into pension funds.
The restriction on dividend tax credits is indeed a voracious grab by the Exchequer. But, increasingly, it is not employers but employees who pay for it. The dumping of final-salary pension schemes in favour of cheaper money-purchase schemes has transferred the pain from employer to employee.
For employers to claim the injury as their own when most of them have rushed to pass on the pain to their staff really is a bit rich. The CBI's own final-salary pension scheme is still going and open to new recruits, I'm pleased to hear.
Conglomerates are a thing of the past, aren't they? The sprawling empires of unrelated businesses built up by Lord Hanson and Sir Owen Green of BTR fame are as unfashionable as a ra-ra skirt. Focus and specialisation, and that hideous phrase "core competence", are on every business leader's lips. Well, not quite. Conglomerates do exist; they are just better camouflaged. Jon Moulton, head of Alchemy Partners, the private equity
group that almost bought Rover two years
ago, revealed at the CBI conference that a
conglomerate is precisely what Alchemy is.
It owns controlling stakes in 33 different businesses. From opencast coal mining to information technology, Alchemy will try anything. It is also the biggest operator of nursing homes in Britain. It employs 30,000 people and sells as much as Unilever UK.
But as a private business, the disclosure rules are less onerous than for quoted companies. Alchemy has no problem about closing down loss-making businesses and walking away from debts; it is protected by limited liability. As Moulton said, "We can bury the dead. It's accepted in our trade." The unspoken contrast was with better-known businesses, which would be expected to meet more obligations to creditors and to employees put out of work.
Oh, and there was one other advantage. "We don't have the wall of corporate governance crap that most of you have to put up with," Moulton told the audience of quoted company directors. You could almost hear the sighs of envy susurrating around the hall.
In the Sunday Telegraph last weekend, Luke Johnson, the former Pizza Express chief, was berating the so-called liberal elite for rejoicing at the misery in the City and gloating at each corporate collapse and every boss's sacking. Under the headline "Don't sneer at the risk-takers", the entrepreneur-cum-columnist urged readers to encourage risk-takers and fully embrace capitalism.
Is this risk-taker the same Luke Johnson who was revealed the same day in the Sunday Times to have made an instant £30,000 profit from the flotation of the stockbrokers Collins Stewart, thanks to receiving a preferential allocation of shares in the company? The earmarking of shares to favoured clients is the antithesis of risk-taking. It virtually guarantees profits for friends of the floating company. Ordinary investors miss out. The Financial Services Authority is investigating the practice, known as "spinning".
The drawback of capitalism is that too often the risk-takers turn out to be ordinary people who can ill afford it, while a different elite (financial rather than liberal) punts on dead-cert winners. As I write, the big investment banks at the heart of western business are facing fines of $1.1bn for their unethical practices. Just for a few days, please, all that is required from the cheerleaders of unfettered capitalism is a contrite, introspective silence.
The latest fat-cat boil appears to have been lanced. The drugs group GlaxoSmithKline is backtracking on its proposal to give its chief executive, Jean-Pierre Garnier, an £11m-plus pay packet. The retreat reflects not just growing shareholder intolerance with executive excess, but also the declining standing of Sir Christopher Hogg, the Glaxo chairman. For years, Hogg, who turned round Courtaulds, could do no wrong. But his influence has shrunk alongside the share price of Reuters, which he also chairs and which now languishes at one-fifth of its value of three years ago.
Patrick Hosking is deputy City editor of the London Evening Standard
