Nelson’Newss column
Time for politicians to talk business
In my last column of 2009 I wrote about growth in the service
the difficulties that our industry has sector also provide a
faced. Last year was a turbulent one, glimmer of progress.
and 2010 will undoubtedly bring fresh Increasing volumes
challenges. Yet, through the gloom I of new business, as
could also detect some early positive noted in January by
signs, and as this year begins I believe the Chartered Institute
that we have good reason for cautious of Purchasing and
optimism. Supply, may herald
While many of the newspaper wider economic
headlines have been gloomy, according growth in 2010.
to the ONS the UK is now officially out Yet converting
of recession. Of course, the UK’s budget these early signs into
deficit continues to figure prominently in concrete outputs
the discussion and worries over the UK’s requires confidence
gas reserves are doing nothing to warm within the markets
the spirits in this cold winter. and the business
However, a closer look at the stories community: confidence
reveals some potential indicators of is still fragile. ACE
better times to come. recently proposed
The announcement that the £1.5 specific “infrastructure
billion London Gateway port project is to gilts” as a means of
go ahead is very welcome news indeed. driving investment into
That DP World is prepared to go ahead an area that can deliver
may represent an increase in confidence real economic results.
among major global clients. The viability of such
ACE member companies in the ideas depends on the
property market have, by and large, goodwill of investors.
endured some difficult times recently. Concerns over the
Yet the completion of the Burj Khalifa soundness of sovereign
in Dubai – now the world’s tallest debt – i.e. bonds and
building – has raised hopes that other gilts – may be a crucial
major developments will follow suit and factor in deciding whether or not to invest. return £2.50 to the economy for every
continue. Dubai required an injection of money from £1 invested is to be realised, then the
London is currently home to a its neighbours, while concerns linger over debate must focus on how to make the
number of landmark projects. Perhaps Japan, Greece, Spain and parts of Latin necessary investment possible.
the most famous of these – the Shard at America. What is required from the current
London Bridge – is well underway and The risks of not addressing the political debate, therefore, are workable
due to be completed in 2012. Heron sovereign debt issue are potentially very ideas to tackle the deficit. Business
Tower, Bishopsgate, also remains on serious. When Argentina defaulted on and the markets need to hear concrete
programme and on budget. its debt in 2002, the capital flow into the proposals from national leaders – and
The energy sector seems set for a country virtually ceased, much foreign would-be leaders.
busy year, particularly since new nuclear investment disappeared and a run on the Even in an election year, markets
power is still firmly on the agenda. There banks ensued. While the UK’s problems continue to trade and businesses
are also signs that serious progress on may not be nearly as damaging, the continue to operate. It is crucial that the
offshore wind may be made, although potential to miss out on significant political community focuses on the real
there are still significant challenges in amounts of inward investment at a time issues of the economy and gives a clear
meeting targets for renewable energy when the country is aiming to grow its lead to business. Party political rhetoric
deployment. way out of recession is not a welcome is only of limited value. It will not provide
Transport, too, provides signs prospect. the required boost in confidence. Now
of hope. Plans for large-scale rail This makes tackling the UK’s own is the time for all sides to start talking
electrification will provide a much- budget deficit even more crucial if we are business.
needed boost to railway engineering; to engineer our way back to prosperity. The response to the Workington
even the aviation market may ease Some commentators noted that the floods demonstrated the resilience and
slightly, if the sale of Gatwick Airport recent Pre Budget Report failed to inspire ability of engineering to respond to a
marks the end of the long-running BAA confidence in the gilt markets or allay crisis. The same could be done for the
competition saga. fears over risks to the UK’s AAA rating. wider economy. Our political leaders now
More generally, recent signs of strong Clearly, if the potential of construction to need to follow suit.
4 | Impact • February/March 2010
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