Lawslot

Jim Pickard’s post yesterday in Westminster Blog anticipated a speech to the CBI Entrepreneurs Conference by John Hutton,

“The business secretary will tell a CBI audience that business people should not lose their nerve despite the well-publicised difficulties facing lenders and borrowers”, [and that although] he will concede that fears over liquidity have spread from the stock market to “workplaces and homes” around the world, . . . banks remain “ready and willing to lend to small and medium businesses”.

I sometimes wonder whether politicians live in the same world as the rest of us, and what it is they are being told. Banks will undoubtedly continue to lend to good businesses (whatever that they may mean) but the support they offer is, at least at the moment, qualified. In the last quarter I know of three high street clearing banks that have pulled loans to prospective borrowers, causing transactions to fail. For a corrective view see Luke Johnson in today’s FT,

“Many of the main clearing banks appear to be downsizing their loan books and shrinking their balance sheets, although they are pretending the opposite. I have heard of dozens of cases in recent months where lenders have used flimsy excuses to refuse facilities to corporate borrowers – for acquisitions, capital expenditure or fresh undertakings. Fees have risen, spreads have widened, covenants have tightened and demands for added security have risen substantially. Inevitably, Robert Frost’s definition is once again proving correct: “A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.”

It is not April 1, so it must be true. According to a report in today’s Telegraph, talking to yourself is actually good for the brain and mental well being. According to Julie Henry, the Telegraph’s Education Correspondent,

Studies have found that “self-talking” can aid concentration, help solve problems and lift depressive moods.

I suppose it may depend upon what you say to yourself. Working in an open-plan office, I cannot but hear one of my partners, who is forever exhorting himself to “Get a grip” and “Come on, get on with it”. Talking to yourself may, as the psychiatrist Paul Horton is reported as having found when carrying out his survey, help to raise glum spirits. I just reckon that my next door neighbour is barking.

I am not sure which I find more disturbing, the Embryology Bill or the behaviour of Gordon Brown, in indicating that he is prepared to allow his MPs almost (but not quite) a free vote, but only if the mathematics show that the government will win (see the report on BBC News).

Just when you thought that the Church of England was slipping into managerial mediocrity, a surprisingly splenetic rant in the Telegraph this morning from Peter Mullen, the Rector of St Michael’s, Cornhill and Chaplain to the Stock Exchange. He is not a follower of the Rowan Williams’ school of muddled thinking. Read the entire column, but here is a taster:

“We might have expected the Church to resist the decay, but instead it has connived with the destructive sexual and social revolution begun in the 1960s. Back then, I voted for homosexuality to be decriminalised. But this meant “between consenting adults in private” – where “between” meant two, “adults” meant men over 21 and “private” meant behind locked doors. I did not foresee the obscene and coercive “Gay Pride” pantomimes that now disfigure our high streets.

Who would have thought we would live to see the Bishop of Hereford fined £47,000 and made to attend a re-education course because he refused to employ a practising homosexual in his diocese’s youth services? How long before I am carted from the pulpit to the nick for preaching that sodomy is not morally equivalent to Christian marriage?”

Further to my post earlier in the week, Matching pension liabilities, the story that led the front page of the FT today, Companies face bigger pensions risk levy, points up the problem and choices that employers with defined benefits schemes face. One further thought. Norma Cohen suggests that the effect of proposals signposted by Partha Dasgupta, the chief executive of the PPF could

“prompt schemes to pare the billions they have invested in equities and would likely lead to demands the government do much more of its borrowing in long-term index-linked gilts that mirror the movements in pension liabilities more closely than any other asset class.”

And that will, in time, radically change the investor profile of many of our leading companies.

Although it may still be premature to announce the death of defined benefit pension schemes, their days are numbered. As reported this morning in the FT, another pensions consultancy, Aon Pensions Consultants, has warned that

Final salary pension schemes face their worst ever deficits if plans go ahead for new accounting standards and more generous assumptions about life expectancy.

To the pensions industry this is old news (and the defined benefit scheme has in truth been an inordinately long time in dying: I was advising on changing schemes more than 15 years ago), but there is another and equally important aspect. Most public sector schemes are salary and service related, and the cost of these schemes is already far higher than many people realise. Changing the assumptions for life expectancy will only make things worse. The government recognised that action needed to be taken in relation to the state pension, and whether or not Personal Accounts are the right anwer (I am not convinced), the nettle was grasped. Unfortunately this has not been the case with public sector pensions. It will have to be, because the burgeoning costs of these pensions is a millstone around the neck of the public purse: and the quid pro quo (of receiving below private sector pay but enjoying a full pension promise) is not as persuasive an argument as hitherto. But don’t hold your breath for this government to do anything about it.

Very much cheered this evening by reading Lucy Kellaway’s latest FT column, Happiness is finding your inner receptionist.  She writes:

“A couple of weeks ago another cheering piece of work was published by scientists at the University of Warwick showing that happiness over a lifetime is U-shaped. It looked at thousands of workers in 80 different countries and found that most people start off happy, and then slide towards misery, reaching a trough at 44. By our early 50s we start to get happy again and by our 60s and 70s happier still.

It isn’t altogether clear why we get cheerier as death draws closer. I suspect it is mainly because the burden of ambition and expectation slips away. We no longer hanker after what we are never going to have. I’m not quite there yet and neither are most of my contemporaries. Ambition still rages, and prospects are intolerably uncertain. But if we hold tight, the upward curve of the U will carry us along soon. We don’t need career coaching. We just need time.”

I read this to my youngest (a confirmed pessimist at 18) and his response was the title to this post. I am next going to email the link to my eldest!

I missed the latest example of law firm meanness just before Christmas. HBJ Gately Wareing, according to Legal Week, asked its legal staff to contribute towards (I take it this means pay for) presents for the support staff. I love the idea that the firm stressed that the scheme was voluntary: aren’t they always! Must be the Scottish influence. Not surprisingly, the scheme was well received by secretaries and support teams.