• London is falling behind other European cities. Paris and Frankfurt enjoy 1,000 more annual flights to the three largest cities in China than Heathrow.

• Lack of access to emerging markets could already be costing the economy £1.2bn a year. In 1990, Heathrow’s route network reached 227 destinations. It is now down to 180, and is forecast to drop to 147.

• Demand is set to double over the coming decades, while our airports are already near capacity, with Heathrow 99% full and Gatwick 95% full. The economy cannot afford to wait the thirty years it would take to build a new airport.

• Expanding our current airports is the only viable option in the short to medium term. To deliver growth, airport operators should be enabled to build at least one more runway in South East England by 2020 – either Stansted, Gatwick or Heathrow.

• Government should expedite this by allowing compensation to be paid directly to affected residents for this critical infrastructure project. The industry needs a more flexible planning system. Decisions should be made by the price mechanism and free competition rather than special interests and political grandstanding.

• Government has a poor track record both at judging the future demands of consumers, and at estimating the costs of large infrastructure projects. This approach would leave the industry free to respond to market demand and to judge for itself the relative costs and benefits of the different options.

Commenting on the report, its author Kwasi Kwarteng MP said:

“Creating a system of compensation as part of the planning system will remove a major obstacle to growth in Britain. Governments aren’t good at working out the best options for large infrastructure projects, but the current system makes it hard for businesses to pursue these projects.

The need to expand our airports is now reaching crisis point. If consensus cannot be reached, and building does not commence in the next few years, London will inevitably fall further behind its European rivals.”

The report, “…and the Pursuit of Happiness: Wellbeing and the Role of Government”, examines the flaws in attempts to measure happiness. It suggests that:

• The government should not be trying to measure or maximise happiness as an explicit policy goal.

• There is no evidence that more equal societies lead to increases in happiness.

• Contrary to widespread belief, the evidence suggests that happiness is in fact related to income and economic growth. The so-called Easterlin paradox (the idea that wellbeing does not increase with income) is shown to be fake.

• Attempts to promote “wellbeing at work” through regulation are likely to be counter-productive in so far as increases in employment regulation increase unemployment. There is a strong link between unemployment and loss of wellbeing. In general, more intrusive and bigger government leads to a loss in wellbeing. One study finds that increasing government spending by one third would cause a reduction in happiness of 5%-6%.

• Smaller government tends to make people happier. Public spending cuts could actually be the key to making Britain a happier place.

Commenting on the report, Mark Littlewood, Director General at the Institute of Economic Affairs, said:

“Governments have shown how hopeless and inefficient they are at attempting to run the basics of our economy. They seem to find it nearly impossible, for example, to resist racking up colossal debts.  To trust them with something far more intimate, complicated and confusing as happiness would be inviting disaster. We need our government to do less, not more – and to stick to the very simple and straightforward tasks which they are just about capable of. All of us are better advised to pursue our own dreams, hopes and goals than to entrust such personal and intimate things to David Cameron.”

Commenting on the report, its editor, Prof Philip Booth, Editorial Director of the Institute of Economic Affairs, said:

“The government is spending money on collecting happiness statistics in order to promote government policies to try to increase aggregate national happiness. This is a flawed policy and based on a complete misconception that governments hitherto have focused only on increasing national income. The nation’s wellbeing will be improved if the government cuts back its activity and allows the economy, employment and families to flourish. The government should not be trying to increase aggregate happiness as a specific policy goal, nor should it be wasting money collecting data on the subject.”

The 12 months between Q2 in 2008 and the equivalent period a year later saw the country slip into recession for the first time since 1990 and as both the value and number of deals steadily slipped in tandem.

“Figures have not truly returned to pre-2008 averages and another dent in the economy could further knock that trend even further backwards,” Paul Francis-Grey, Head of Financial Services EMEA, said.

In the eight quarters proceeding the 2008 recession, the UK saw an average of 372.5 deals announced each quarter. This compared to only 219 in the eight quarters following the recovery. And for the four quarters the UK was officially in recession, an average of 236 deals were announced.

Deal size similarly dipped post-recession and has yet to fully recover to pre-2009 figures, according to mergermarket data. While 2008 and 2007 saw deal values reach GBP 143.9bn and GBP 169.1bn respectively, 2009 saw a total deal value touch GBP 81bn. Last year saw GBP 81.7bn worth of deals announced whereas this year has seen a value of GBP 69.8bn announced deals.

“The prospects for an even quieter 2012 in terms of deals being undertaken would appear a stark possibility given the economic climate around the eurozone. But on the flipside, we could see the likes of Asia and the US pounce on its weakness,” Francis-Grey said.

About mergermarket
mergermarket, part of The Mergermarket Group, is an unparalleled, independent M&A intelligence tool used by the world’s foremost financial institutions to originate deals. It provides proprietary intelligence on potential deal flow, potential mandates and valuations via the world’s largest group of M&A journalists and analysts who have direct access to the most senior decision-makers and corporates.

Incorporated in December 1999 by founders Caspar Hobbs, Charlie Welsh and Gawn Rowan Hamilton, it has since become the fastest growing business in its sector. As well as expanding its coverage across Europe, Americas, Latin America and the Asia-Pacific region, the company continues to launch ground-breaking products and services.

According to the latest Business Failures figures from leading business information provider, Equifax, the number of businesses going bust has risen by 2.2% in Quarter 2 2011, compared to Quarter 1. In the North West business, failures have steadied, rising by just 0.2% compared to the same period last year, but compared to Q1 2011, failures dropped by 3.3%, offering further good news for the region. However, all regions need to proceed with caution, as companies across the UK struggle to survive.

The North East recorded the greatest year-on-year increase in failures in Quarter 2 at 21.7%, although when compared with Quarter 1 2011 there was a 4.3% drop in businesses going under which should be a positive sign for companies in this region.

According to the latest figures from Equifax, the East Midlands appears to be the most resilient region across the country, with a year-on-year drop in failures of 11.3%.  And this strong performance is also reflected when comparing failures in Q2 with Q1 2011, with a 10.3% fall. The South East, however, appears to be facing a greater struggle. Year-on-year there was an 11.8% rise in failures and the difficult conditions do not appear to have abated when compared to Quarter 1, with a 14.9% increase.

Key Numbers

• •3.4% increase in businesses failing in Quarter 2 2011 compared to the same period in 2010
• 2.2% increase in failures for Quarter 2 2011 compared to Quarter 1 2011
• The North East sees the biggest year on year increase in companies failing
• Quarter on Quarter, the South East shows the biggest rise in failures
• The Retail sector records a 15.9% increase in failures Year on Year, although the Transport & Communications sector has highest Year on Year increase

“This new Report is disappointing given that the trend for more than a year has been a reduction in companies failing,” says Mark Nuttall, Director, Equifax Commercial & SME Services. “Despite failures levelling off slightly in the North West, it’s clear that some businesses have just found it impossible to continue to keep their heads above water as the economy fails to pick-up to any great extent. The failures in the Retail sector in particular would indicate the lack of consumer confidence that has been reported recently.

“However, it is also important to realise that we are now comparing figures to a steady fall in failures for the last 12-18 months, and the actual numbers of failures are still not as heavy as they were in early 2009.”

The latest report from Equifax mirrors a recent British Chambers of Commerce report, suggesting that the UK economy is recovering too slowly, with the BCC saying that more support is needed for private sector firms. Coming a few weeks after a number of high profile failures, including Jane Norman, Moben Kitchens, Dolphin Bathrooms and T J Hughes, it also reinforces that whatever the size of an organisation, focus on credit management is an absolutely crucial component for survival.

“When we took a snapshot of business failures for April/May we could see the early signs of an increase in companies failing – with a 1.5% rise year-on –year,” continues Mark Nuttall.

“Our figures support other reports showing that the UK economy continues to remain fragile, so it’s not surprising that some businesses have just found it too difficult to survive.  That’s why those businesses that have survived so far need to continue operating best practice, no matter which region they are in. Now is the time to harness the power of the latest risk management solutions to minimise the threat of bad debt and secure the future of their business.

“The importance of monitoring existing customer performance cannot be over-stated to ensure businesses weather the unpredictable conditions that exist at the moment.”

The research shows how the government could reduce public spending by an additional £215bn. This would mean the government would be spending around 30% of GDP instead of the government’s proposal of around 40%. The IEA’s proposals would deliver average tax reductions equivalent to around £7,500 per household each year.

“Reducing and controlling spending has to contribute more to deficit reduction. So far tax rises have been taking most of the strain, making growth more difficult to achieve. I welcome this source book for making more progress in getting spending to a level taxpayers can afford, and hope the government will take up at least the best ideas from the list.” – The Rt Hon John Redwood MP

The reforms proposed in ‘Sharper Axes, Lower Taxes: Big Steps to a Smaller State‘ could also increase economic growth by 0.75% a year leading to dramatic improvements in long-run living standards.

Delivering a comprehensive spending review by going through government spending area-by-area this report sets out how the government could reform spending and tax policy. It shows that the government’s aspirations – such as ensuring that all have access to decent health care, and providing a welfare system for the less well-off – could be achieved much more effectively with lower government spending.

Some of the biggest spending cuts include: £44bn from health reforms, £46.5bn from reforms to the welfare state and pensions; £17bn from defence; and £12bn from foreign aid. £40bn per annum will also be raised from asset sales. (For a full list of reductions in expenditure, please see the notes to editors).

Opinion poll research conducted for the IEA by ComRes shows overwhelming public support for a much deeper programme of spending cuts.

By the time of the next election, the government is intending to spend around 40% of national income, but 55% of the public who expressed an opinion believe that public spending should be 35% or lower and only 16% want public spending to be measurably more than the coalition is intending to spend (45% of national income or more). 29% believe the coalition has got it about right, favouring the state spending between 35% and 45% of national income.

A much more radical reduction in state spending is particularly popular amongst the young (67% of under 25s and 69% of 25-34 year olds support government spending being reduced to below 35% of national income). There is a broadly equal level of support from voters irrespective of their party political affiliation.

Given a straight choice between the coalition’s plans of government spending of 40% of national income and the IEA’s more radical plan of reducing spending to about 30% of GDP and implementing average tax cuts of £7,500 per household, the overwhelming majority (70%) favour the IEA’s proposal and only 30% favour the coalition plan.

Commenting on the report, Mark Littlewood, Director General at the Institute of Economic Affairs, said:

“The coalition government should listen more to the British people in general and less to organised special interest groups that push for more government spending. Lobbying from interest groups can push tax and government spending well beyond optimal levels.

“This poll makes clear that the public favour a dramatic reduction in the size of government and the right to keep more of their own money rather than surrender it in tax.

“The government needs to adopt a Plan A+. Embracing the sort of proposals in this report would stimulate economic growth, which has remained disappointingly sluggish in the wake of the coalition’s unambitious plans so far.”

Commenting on the report, Prof. Philip Booth, editor of the report and Editorial Director at the Institute of Economic Affairs, said:

“Even under these plans, the government would be spending nearly one third of national income. If the government were limited to such a budget it could still perform the tasks it needs to perform much more effectively. There would be access to good healthcare for all and the poor would still have their incomes topped up but the government would become the servant and not the master of the people again. We would, once again, be able to have a welfare system that did lock people in poverty.

“If the government wants to achieve genuine public service and welfare reform and ensure that health, education and other services are responsive to the people they are intended to serve it must take a long, hard look at these proposals.”

Government spending is currently around 50% of national income. At these levels it is seriously damaging economic growth. Even if the coalition achieves its objectives, there will be only modest reductions in government spending. Nominal spending will rise, real spending will be cut by less than 1% per annum and spending as a proportion of national income will fall back only to 2007 levels – around 40%.

A complete review of government functions could, using the government’s definitions of government spending and national income, lead to further cuts of £215 billion to around 30% of national income.

Under these proposals, the government would also be making fewer unfunded health and pensions promises to future generations, thus putting the public finances on a sound long-term footing.

Government spending – even in areas such as research and development, investment and education – has little or no beneficial effect on economic growth. The taxation necessary to fund government spending, however, seriously and adversely affects economic growth. A reduction in government spending of the order suggested by our authors would lead to economic growth increasing by more than 0.75% per annum: this would mean that national income would grow by an extra 20% every 25 years.

To finance government spending of around 30% of GDP, taxation could be reduced and simplified.

Although it is difficult to estimate precisely, it would seem feasible that tax could be set at:

• A single flat-rate income tax of about 15% on income above the tax threshold, which would be determined by household size.
• A single person’s allowance could be around £12,000. Larger households would have much higher tax allowances so that a four-person household on median earnings would pay little income tax.
• Corporation tax of 15%.
• National insurance rates of about 10% split between employer and employee above a lower threshold than the income tax threshold so that all workers made some contribution.
• A value added tax of about 10% across a broad base of spending.

“In this swash-buckling report, the IEA points to the bureaucratic waste holding the economy back, and the tax cuts that would fire jobs growth and promote the three vital economic virtues – enterprise, hard-work and saving.” – Dominic Raab MP

Area of expenditure & Proposed cut (£bn)

Health 44
Education, training and childcare 15.5
Pensions and the elderly 15.5
Defence 17
Foreign aid 12
Income transfers 31
Transport (including first year of road privatisation programme) 30
Privatisation 40
Energy and climate change measures 10

Total ‘headline’ spending cuts £215.5bn

The £215bn is based on the calendar year 2015 and is in addition to the cuts the government has already announced.  An additional £27bn cuts in government spending are proposed that the government does not include in its own definition of spending.

Methodology of ComRes poll – ComRes conducted an online survey of 2,050 GB adults between the 8th and 10th July. Data were weighted to be demographically representative of all GB adults. ComRes is a member of the British Polling Council and abide by its rules.

“As George Osborne struggles manfully to save Britain from the disastrous inheritance of a Labour Government which for 13 years spent like a drunken sailor on shore leave, the IEA has ridden to his aid by itemizing billions in potential savings for the ravaged, ill-used taxpayer. This is the British equivalent of the Republicans’ inspiring Ryan Plan in America; a manifesto of genuine hope in the future, rather than the tinsel variety offered by Barack Obama. Sadly, not all the IEA’s ideas are immediately deliverable because of the exigencies of coalition politics at Westminster, but by merely putting these radical, innovative, far-sighted, brave and overdue options in the frame, the IEA has refreshingly reminded us that conviction politics did not die when Margaret Thatcher was overthrown a generation ago.” – Andrew Roberts, historian

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.

“The IMF’s analysis makes it plain that George Osborne doesn’t need a Plan B. He should not be diverted from a strategy to get the deficit under control.

“But he does need Plan A+. He needs a plan that actually includes a serious strategy for growth. Since he became Chancellor, the regulatory burden on British business has actually increased. Banking and financial services – the backbone of our economy – are increasingly used as a political football. And his budget this year merely tinkered with a few minor details.

“Economic growth will not be boosted by splurging more money in an inefficient and absurdly overgrown public sector. The government needs to slash red tape, simplify employment law and provide a more benign environment for British business.”

He concluded:

“If the government does have any room for fiscal manoeuvre, tax cuts should be the priority.”

Prof. Philip Booth, Editorial Director of the Institute of Economic Affairs, said:

“The IMF is very much taking the same line as the coalition and the Bank of England. However, the IMF is arguably too sanguine about inflation and its argument that the coalition’s tax rises have been necessary is implicitly based on the assumption that public spending should not be cut further. By 2015, the state will still be spending at least 40% of national income: greater spending cuts and a reversal of recent tax rises would improve the prospects for economic growth.”

Lest we forget, here are the main arguments:  John Maynard Keynes is the economist responsible for the currently popular belief in the western world that we should intervene to find our way out of economic recessions and depressions.  His thinking has been at the centre of banking bail outs and the use of quantitative easing as a mechanism for recovery.

The Austrian, Friedrich August Hayek argued for classical liberalism and free market capitalism. In other words, markets should be freed to find their own level, using the price mechanism as a means of spontaneous organisation.  Keynes was not keen on Hayek’s idea that self organisation and a more organic approach could replace an interventionist outlook with strong planning.

Joseph Schumpeter argued that Keynes’s ideas expressed “the attitude of a decaying civilisation”.  He saw Keynes’s approach as short-termist and unable to consider the economic problems of other nations.   In a global village, it is certainly true that we are at the mercy of other economies’ troubles.  Does that however mean we should lay down and pretend to be dead when boom turns to bust?

So, who can we trust to lead us into a new world economy?  If seems that, if you laid all the economists in the world end to end, they would not reach a conclusion.  More of the same is likely to lead us into a debt fuelled prison.  Is it time to mix macro-economics with a bit of sociology, courtesy of the rappers and systemic mappers?

Peter Cook is the Rock’n’Roll Business Guru, delivering exceptional corporate events and keynote speeches that blend business and music.

The awards, now in their second year, are presented to individuals who have made an outstanding contribution to the creative industries across ten sectors.

Incredibly the UK creative industries sector has overtaken food and drink in terms of its contribution to the UK economy. The sector – which includes advertising, fashion, film, music and video games – generates £59.1 billion in economic value compared with the £54 billion generated by food and drink.

The creative industries employ 2,280,000 people according to the latest estimates by the Department for Culture Media and Sport. One in every twelve British firms is a creative business.

The nominees for this year’s awards are:

Film: Danny Boyle, Tom Hooper, Paul Greengrass

Television: Syco Productions, Lord Michael Grade, Sir David Attenborough

Music: Lucian Grange, David Arnold, Brian Eno

Fashion: Dame Vivienne Westwood, Alexandra Shulman, Natalie Massenet

Design: Zaha Hadid, Jonathon Ive CBE, Ian Callum

Innovation, Enterprise and Industry: Sir Richard Branson, Jamie Oliver MBE, Nick Robertson

Science and Technology: Prof Brian Cox, Matt McGrath, Heston Blumenthal OBE

Digital Media (IT & S/W): Sage, Arm Technology, Founders of Rockstar North

Arts: Banksy, Gilbert & George, Charles Saatchi

Media: Cilla Snowball, Jonny Geller, Dame Gail Rebuck

A ‘Special Recognition’ award was also presented on the day.

But today, the need for professional indemnity cover goes much wider than that and covers many sections of the public and not-for-profit sectors as well as the private sector. Social enterprise groups and community organisations are also affected.

With increasing sections of our society needing care and support – whether it’s the vulnerable child or the old person living alone – more and more organisations in the public and not-for-profit sectors are realising that they are going to need specialist and wide-ranging help with their professional indemnity cover.

This article was presented by Markel UK. For more information visit their website today

Whether you like it or not, we’re increasingly living in a ‘blame and claim’ culture – and that doesn’t just mean answering “yes” when the TV ads ask if you’ve fallen over on a wet floor. Today, many sections of the public and not-for-profit sectors have a duty of care to the vulnerable in society. But it’s becoming increasingly evident that even the most vulnerable members of society (or their relatives) are prepared to make a claim if they believe they have a case.

The number of groups who may be at risk from a claim is surprisingly high – it’s not just the local authority with responsibility for a care home, or the charity looking after clients with a learning disability.

Any organisation running an after school club or a nursery; charities offering help with rehabilitation, or any sort of children’s organisation – all of them will be at risk from claims and will need to seek expert help with their professional indemnity insurance. As the law becomes ever more complex, and opportunities for claims increase, even the small local charity will need to move away from the local insurance broker to companies who specialise in professional indemnity for the public and not-for-profit sectors.

Of course, for the directors and management of the organisations affected, the buck doesn’t stop with public liability insurance – they also have to worry about the vagaries of employment law, the duty of care they owe to staff… The list goes on, but the most likely source of a potentially devastating claim is their professional indemnity. Expert help from a specialist broker is an absolute essential: without it, they might not be able to carry on helping their vulnerable clients.

FirstGroup UK buses

The announcement of a £160m order for more than 955 buses over 2 years, comes as fuel prices across the UK hit an all time high and the British public begin to look to alternative modes of transport in order to keep costs down.

Research released today by FirstGroup will reveal whether rising fuel prices will force people out of their cars and on to public transport. With the average tank of petrol now costing £2, and continuing instability in Libya and the wider Middle East, public transport may become increasingly viable for more people as rocketing fuel prices make people think twice about using their cars.

The order includes an additional 200 buses for the London 2012 Olympics which will help transport the thousands of visitors expected to converge on the UK throughout the Games.

FirstGroup’s order includes 40 hybrid buses which have been funded with the help of the Government’s ‘Green Bus Fund’. These hybrid vehicles will be operating in Leeds, Manchester and Glasgow from 2012. Powered by a combination of batteries and conventional diesel, the new hybrid buses produce around 40% less carbon emissions. As well as being kinder to the environment the new state of the art buses are quieter than other vehicles and also more comfortable – with leather seating.

FirstGroup plc is the leading transport operator in the UK and North America with revenues of over £6 billion a year. It employs more than 130,000 staff and transports some 2.5 billion passengers a year. The Group is Britain’s largest bus operator running more than one in five of all local bus services. A fleet of some 8,500 buses carries approximately 3 million passengers a day in more than 40 major towns and cities. It also operates Greyhound UK providing regular services between London and the south coast and between Cardiff and Swansea.