The Irish finance minister Brian Lenihan may (or may not, depending which report you read) have been jeered by international investors and bond traders on a conference call last week, but he is
widely admired by his own business community, both for his determination to steer a straight course through the banking crisis and property crash that have overwhelmed the former ‘Celtic
Tiger’, and for his personal battle with pancreatic cancer.
The Irish finance minister Brian Lenihan may (or may not, depending which report you read) have been jeered by international investors and bond traders on a conference call last week, but he is
widely admired by his own business community, both for his determination to steer a straight course through the banking crisis and property crash that have overwhelmed the former ‘Celtic
Tiger’, and for his personal battle with pancreatic cancer. I rang two friends in Dublin this week and garnered matching sets of compliments for Lenihan — but very different
perspectives on his strategy. Conor O’Kelly, a bond market veteran who runs the NCB securities group, told me Lenihan’s statement that the cost of bailing out Irish banks could rise to
a breathtaking €45 billion was a ‘very high-risk exercise in brinkmanship’: a head-on challenge to the bond market, which has so far given Lenihan the benefit of the doubt in the
form of a slight narrowing (from 4.6 per cent to 4.2 per cent) of the premium for Irish paper over the German benchmark for euro-sovereign debt. But it’s early days, O’Kelly says, and
Lenihan’s four-year plan, to be announced in November, could hit serious domestic political turbulence. If it does, those jeering investors could still throw Ireland in the basket with
Iceland and Greece.
My second call was to David McRedmond, who runs the television channel TV3. He too is a Lenihan fan, but he told me that the most significant speech in Dublin last week was not the finance
minister’s, but Bill Clinton’s at a gala dinner the same evening. ‘I believe you’ll get out of this, but not fast,’ the former US president told a hall packed with the
Irish elite. ‘Tell people the truth, do what has to be done.’ Maybe it was all in the delivery, but McRedmond felt Clinton had precisely caught the public mood. ‘We’re
beyond emoting about the crash. Now we’re thinking about how to get through it. Lenihan’s statement was cathartic; we’re actually hoping for another tough budget in November. In
the private sector, we’ve already got better businesses than we had a couple of years ago. We’ve taken big pay cuts while our eurozone competitors have been giving themselves rises, so
there’s a productivity swing in our favour.’ Is the mood there anything like the way the British media has reported it? I asked. ‘Not really, and it’s pretty rich reading
all this “Is Britain the next Ireland?” stuff in the London papers when you’re all still arguing about who’s to blame and whether cuts should happen or not. In Ireland,
we’ve moved on. There’s a long way to go, but as Bill said, we’ll be fine.’
A worthy successor?
Sir John Rose, who will step down next March after almost 15 years as chief executive of Rolls-Royce, is the outstanding British industrialist of his generation even though he was the first
non-engineer to run the great aero-engine maker. A model of tenacity, strategic clarity and the avoidance of anything resembling a personal cult — compare and contrast with his near
contemporary Lord Browne, the fallen idol of BP, for example — Rose has presided over a tripling of Rolls-Royce revenues, driven chiefly by orders from Asia and the Middle East. The secret of
his longevity in office, I’m told, is his capacity to relax and to recover instantly from the long flights and big nights of client schmoozing that are the lot of the export salesman; it
probably also helped that he rarely spoke to journalists (in my case, only at parties).
But his pungent views on Britain’s competitive disadvantages, particularly in terms of human capital, can be found in ‘Creating a High-Value Economy’, a lecture he gave to the
Royal Society of Arts last year. In it he implied that Rolls-Royce maintains high skill levels at its home factory in Derby despite rather than because of the quality and focus of British schools
and colleges. When it comes to new investments, he said, ‘we are increasingly attracted to countries with high educational standards and strong vocational training such as the US, Germany,
Scandinavia and Singapore. In Britain, we must recreate technology colleges or their equivalent… In the context of the current debate about university fees, we should certainly consider a
system of differential fees that encourage the study of engineering and the sciences.’
George Osborne spoke in Birmingham on Monday about encouraging innovation so that Britain would once more be the ‘ideas factory for the world’ that his party conference’s host
city had once been. If he’s serious, he should enlist the help of the departing Rolls-Royce chief as soon as possible. In fact, given the ideological unsuitability and increasing
disgruntlement of Vince Cable, there will surely be a key Cabinet vacancy by next March: who better than a newly ennobled Lord Rose of Derby to take charge of ‘business, innovation and
skills’?
Attila’s agenda
Another old friend, the radical punk poet Attila the Stockbroker, passed through Helmsley at the weekend on his 30th anniversary tour. He has to watch his blood pressure these days but age
hasn’t otherwise mellowed in his rage and it would be fair to say that he’s no fan of the coalition: ‘knobhead Clegg’ came into the act, though I can’t remember what
it rhymed with. Nor is he enamoured of ‘Red Ed’ Miliband, who he regards as ‘paler pink than Miss Piggy’. As for the bankers, the reforms proposed by Attila (real name John,
his revolutionary ardour having been fuelled by an unhappy stint as a stockbroker’s clerk in his youth) are a good deal more bracing than George Osborne’s vague threat to curb bonuses,
and more entertaining than Billy Bragg’s predictable rant on the Today programme ahead of the Chancellor’s speech. ‘No more speculate, no more accumulate/ This is a lifestyle
we’re going to eradicate/ Bollocks to the dealer, the broker, the lender/ Social justice back on the agenda/ For the poor no fear, for the rich no pity/ When Attila the Stockbroker cleans up
the City!’ Catch him next week in Warrington, Norwich and Watford.
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