Uncle Audley considers Mr Brown’s first year in office

I telephoned Uncle Audley the other afternoon to see if had been enjoying Wimbledon only to find him in an uncompromising mood. “First Anniversary this week”, he barked. Startled I wondered which card I had forgotten to buy before he continued.

 

“Brown. Mr Modesty, the chap who always told us as Chancellor what a brain box he was and went missing when trouble was afoot. He hasn’t been able to escape the floodlights in the last 12 months has he now and he hasn’t fared well. Mind you it’s not all his fault. Oil and Energy prices are a problem – as they were for Heath. Got him too when they went through the roof. You won’t remember them though my boy”  (Oh I don’t know I thought remembering primary school without heat and being taught to dance with the girls to keep up our warmth. I woke up to hear Audley still talking) Sorry, Audley what were you saying?

 

“Three day weeks, living by candlelight – I’d get out tomorrow and get a box before they go up as well if I were you. Mind you Heath won more votes than Wilson but lost the 1974 election – I doubt Brown will have the same luck. Fifth in Henley – I ask you. We knew he wouldn’t win but fifth.”

 

I appreciate you’ve never been keen on Mr Brown”

 

“How could I be – he’s never done anything worth praising. Any measure he introduced he removed at a later date, he robbed the utility companies and we have nothing to show for it and he gave the Bank of England independence and they messed up the Northern Rock thing when their first chance to shine appeared. The problem comes from Blair allowing them to be presented as a dream ticket, head and shoulders above the rest of the party, Gordon the only potential successor so that when the time came there was no room for manoeuvre. I reckon most senior Labour figures knew this would happen but were powerless to do anything about it. If they really want to lose the next election they should call it now before too much more damage has been done. The economy is slowing, house prices are falling it looks like it could be grim ahead. That calls for a strong leader. Trouble is – are there any out there?”

 

And with that he was gone, no mention of the tennis at all. I thought about what Audley had said and picked a Dire Straits CD off the rack and put on the title track,

 

You walk out on the high wire 
You're a dancer on thin ice 
You pay no heed to the danger 
And less to advice
Your footsteps are forbidden
But with a knowledge of your sin
You throw your love to all the strangers
And caution to the wind


And you go dancing through doorways
Just to see what you will find
Leaving nothing to interfere
With the crazy balance of your mind
And when you finally reappear
At the place where you came in
You've thrown your love to all the strangers
And caution to the wind

It takes love over gold
And mind over matter
To do what you do that you must
When the things that you hold
Can fall and be shattered
Or run through your fingers like dust

 

It’s not going away: the 10p debacle that is!

The debate over the 10p rate debacle rumbles on following the publishing of a Cross-Party Treasury Committee report on the subject. The report suggests that 1.1 million households still remain £112 worse off under the emergency measures that Alistair Darling announced in May and that this announcement must not be a “one off” measure to appease those affected by Gordon Brown’s infamous final announcement as Chancellor in his final budget.

 

There was small praise for Mr Darling in that the measure he introduced was “the least bad option” but comment that it had been “poorly targeted” and concern over how this will be funded into the future as the Institute of Fiscal Studies have warned that Gordon Brown’s sustainable investment rule could be broken by this measure in future years.

 

Poor Mr Darling. He must feel like John Major did having won the 1992 election. Having taken on the Chancellorship he inherited the final publicity stunt Mr Brown thrust upon us in his last budget. So how does he get out of this mess?

 

Two options exist. Firstly resign and make a powerful Geoffrey Howe like statement to the House referring to my “learned plank from who I took over the job”, or secondly do the honourable thing and do a complete U-Turn and reintroduce the 10p rate band and increase the basic rate of tax back to 22%. The first option might help shift Gordon from Number 10 back to Dunfermline but might signal the end of his political career, the second might get him the sack in a pre budget reshuffle in a desperate attempt by the Cabinet trying to avoid seats in the Shadow Cabinet.

 

But if the second option is not done how do the Government ever hope to fulfil the needs of those requiring reimbursement and satisfy the cross-party treasury committee’s recommendations, whilst maintaining financial stability and satisfying prudence?

 

Climbing down is always seen as weakness and offers the opportunity of attack from opposition parties. But in this case would it not shut them up? Granted they will claim that “you don’t know what you’re doing” but having had 10 years of prudence with Mr Brown at the helm surely we don’t forget her altogether and embark on a financial suicide course that satisfies what purpose?

 

It has been a tough year for Mr Brown. Politically probably the worst of his working life. This report following 5^th place in the Henley by election must certainly reignite the “time to go” notes being passed in the House before Summer recess.

 

It doesn’t look good for Frank Field either. Having not noticed for over 12 months how the withdrawal of the 10p rate band was going to affect the tax paying public, he then makes a big fuss. He then backs down when the changes are announced only to then realise he might have been sold another pup, and now says; “We will be looking, when we debate this in the Commons, and when the government promises it will come back in November, for a proper settlement for everyone who lost out on 10p.”  

 

Come on Frank, if you asked the right questions before backing down you could have settled this by now and given us the General Election most people seem to want. But maybe you, like most Members of Parliament, are not as principled as you say you are!

How to choose an Accountant

Choosing an Accountant. How should one go about it? For my first blog I’ve set out 20 points below which may be of help.

 

1.      1. Take advice from any member or friend who is in business about whom they use or have used.  They may have had a bad experience with a particular accountant which you can avoid because of their experience.

 

2.      If you have a professional adviser such as a solicitor or banker, find out whom they rate and recommend.

 

3.      Make sure the accountant has the resources and the structure to deal with your size of business and the issues which will confront you.  An accountant working from home in the evenings may be  inexpensive but may not be the right choice for you.  Equally, one of the multi-national firms may not be appropriate either. 

 

4.      Consider the geographical convenience.  It may suit you to have an accountant in the same town, because you will need to drop in records frequently.  If face to face contact may not be that frequent then you can choose from further afield.  Modern technology does have a significant impact here.  For some people considerations such as ease of access and car parking facilities, can be an important factor.

 

5.      If you are in a specific sector check and make sure the firm has the expertise in this area to be able to advise you.  If you are a dentist, for example, you might want to choose an accountant who deals with a number of dentists and is well versed in the peculiarities of your profession.

 

6.       If your business has a national or international flavour, you might want to check that your accountant has the nationwide and international connections to advise your business.  Many accountancy firms will be members of a national grouping and quite possibly an international group and able to enhance their corporate strength.

 

7.      Indeed, you need to check that the accountant can provide the range of skills which you might need.  Your company might be sufficiently large to require an audit.  An audit is no longer mandatory and with the decline in audit work, many accountants no longer provide this service.  You will need to check to see that the firm are registered auditors.

 

8.      You will want to see that the firm has the range of tax expertise in corporation tax, VAT and other areas such as IHT.  You may need a payroll bureau service, corporate finance skills to raise funds.  You may, importantly, want help with IT and setting up your accounting systems.  Make sure the accountant and his team tick the boxes you need them to. 

   

9.       Every firm worth their salt should have an informative web site for you to get background information on the movers and shakers.  Many of the above points can be largely covered by a detailed review of the web site.  Assess the web site and its ease of navigation.  Does it suggest a dynamic and innovative firm who will provide a pro-active “can do” service for you?

 

10.  Telephone the accountant and assess the response.  Does the receptionist sound clued in and efficient?  When you are put through to someone, do they sound knowledgeable and genuinely interested?  Did you feel they were keen to act for you or was your telephone conversation an imposition and a distraction for them?

 

11.  Always visit the premises.  Assess whether it looks professional?  Assess the waiting area.  Were any reading materials such as papers and magazines up to date?  If the reading material is out of date, then this may say something about the firm.  Look out for publications produced by the firm.  Were brochures or business cards on display?  These can also say something about the firm. 

 

12.  Look for evidence that the firm harnesses technology.

 

13.  If you are taken into a room, what is your impression of the room?  Is it someone’s room?  If so, are there client files lying around?  That may not be a glowing testimony to client confidentiality.  Does the desk look ordered and the product of an organised individual?  If there is a bookcase, check to see whether there are out of date text books there.

 

14.  Assess the individual talking to you.  Does he or she give you confidence and impress you with the technical knowledge and grasp of your business?

 

15.  Has the individual clearly researched you and your business beforehand so that they are informed and can cut to the quick or do they seem ill prepared for you and your business issues?

 

16.  Check out the business qualifications.  Get a business card to see what is on there.  Make sure you recognise the qualifications and that they are from properly accredited accountancy bodies.  Make sure that the person handling your business’s accounting and tax affairs is appropriately qualified.  All too often people presume they are dealing with a qualified accountant when they are not.  I have also come across a situation when someone thought they had appointed a qualified accountant.  In fact, the letters after the name related to a statistical qualification.

 

17.  Ask for a detailed fee quotation so that you know what you are paying for and what you are getting for that.  If you are comparing quotes, do make sure you are comparing like with like.  As in everything else, you tend to get what you pay for.  The cheapest quote may not necessarily be the best.  A good accountant may well save you far more than the fee.  The quotation may not allow for any meeting time with you.  I often take on cases where the business person has had accounts simply posted through to them to sign without any commentary or explanation or any invitation for a meeting to discuss them.  Many firms will support the accounts production with brochures and statistics, often presented in a graphic format, to enhance the figures.

 

18.  Assess the post meeting follow up.  If information is sent, is it professionally presented and detailed?  Does it look as though some time and effort has been spent on preparing the proposition for you?  In other words, do they want you?

 

19.  It is important that you feel that you can get on with and be comfortable with the accountant you choose.  Do you feel that he would be on your side and would be sitting on the same side of the table as you, as you drive you business forward.  You also want someone who will be prepared to give you tough advice, if that is what is needed.

 

20.  Finally, expect them to ask for the work. So give me a ring on 01376 326266 or email me on paul.short@lambert-chapman.co.uk. so that we can discuss it further!

Let’s hear it for Gordon (of H. T. Burt not Brown!)

I’ve just watched episode 3 of Mary, Queen of Shops in which Mary Portas gave the kiss of life to H T Burt a family clothes shop based in Chorlton Manchester and founded in 1895.  It was a tense watch as Family Forsyth waited with baited breath to see if Mary could reinvent the business which was somewhat stale to say the least and had taken £19 on the previous Monday.

 

It reminded me of when I had taken Lisa to a similar Gents outfitter in Braintree in the mid 1990’s to buy her Grandad a hat for his birthday. They were delighted to see us, made the sale and wrote it down on their till roll in pencil. The previous sale was the week before! The hat was presented some days later, tried on, was the wrong size so having not got the same hat in correct size a refund was offered. No sales had been made in between! They did not have the benefit of Mary’s power in making a TV programme to take them to a busy Gap store and allow them to work on the shop floor, nor get them a meeting with the editor of GQ or a buying opportunity with Hackett. So how did they do? Well in the end Adrian, the third generation of Burt to run the shop, turned from zero to hero and won the Hackett supplier account. But it was hard work on Mary’s part and I got the feeling that his wife had covered for him for many years previously. The meeting Mary held with them in the shop reduced him to tears but it did prove that taking someone to the brink can work if they can face their demons and pull through.

 

His colleague and head buyer Mike fared less well but did lose his comb over by the programs end, but it was Gordon who was the real star. A veteran of 33 years service with the shop he proved a revelation on the shop floor in Gap, asked relevant questions without being intimidated of the GQ editor and took the money when Burts reopened with a classy new range of well known names.

 

I liked Gordon from the start. He appeared comfortable in front of the camera and was proud of who he worked for. His only wobble was when it came to dumping old stock at a bowls club at bargain basement prices but at his age who could blame him. The fact that he was able to face up to change so readily and then grasp it was proof that the ageism legislation was correct. Had it not been for his age he probably would have ended up the buyer because he had the most idea of what was right intuitively rather than Adrian who had to be forced to do it.

 

Whether the BBC fixed it to get a lot of locals into the shop on reopening night in an effort to give the shop a chance is another thing altogether but the tills were ringing and the shop ended up taking considerably more than the previous year that week. We never found out whether a rack was left for the previous customers, who whilst being a dying breed still needed somewhere to shop on the odd occasions that they ventured out, but we did see that everyone had got back a bit of vigour for the journey on the road ahead. And that’s what they’ll need. It won’t be enough for them to slip back to their ways over time, they have to keep their youthful attitude and that will probably be difficult for Mike so Gordon needs to keep working for as long as possible to support Adrian and his wife keep the family business alive. I’d love to see a fly on the wall in 12 months to tell us if it happens.

 

If you missed Mary, Queen of Shops it is available on the BBC iPlayer until 30^th June so do take a look it was a great business turnaround program.        

Have we been missed at Euro 2008?

There have been some exciting finishes in the knockout stages of Euro 2008 and some good games in the group stages. But have England been missed? We can see from the Portugal, Croatia and Holland eliminations that it is not only England who suffer such a fate at this stage of the competition and now the Germans and Italians look stronger than we felt after one game.

The supporters of these nations have also been colourful and possibly a little more sober than our own fans might have been. With the exception of the reported fighting after the Germany Poland game it also appears to have been a relatively trouble free tournament.

So who do you think will win it from here and who has been the player of the tournament so far? Luca Modrich has a few votes to take back to his new club at this end….   

 

Can interest rates increase?

The retail figures for May 2008 indicate record levels of spending and a 3.5% increase over the previous month which is the largest rise since January 1986. As a consequence it offers the Bank of England the chance to increase interest rates in an effort to curb inflation which has been increasing over recent months.

 

So are we happy that the figures are right and comfortable with the possibility of interest rates increasing?

 

When announced they were a surprise to say the very least. As a result we asked a couple of clients involved in retail for their impressions. They agreed that retail sales were stronger than last year, and that currently they were either on or ahead of target. But this was only part of the picture. They still felt that at best they were only breaking even. We are currently finalising accounts for these periods and they support this claim.

 

And this is the problem. Statistics don’t tell the whole story and tracking turnover on its own doesn’t provide enough of a picture to tell the Bank of England what to do. Retailers talk of peaks and troughs. For some May is a strong month and it is these sectors that are contributing to the present stats. As an example clothes sales rose by a whopping 9.2% as customers kitted themselves out for the summer. Yet for others, May can be one of the worst months as people turn their attention away from the products they sell.

 

Staffing is a major concern in the sector. To remain profitable it is a cost that has to be monitored carefully, yet  overdone there is the risk that customers won’t wait, about turn and take their custom elsewhere. This is a particular issue to the small independent retailers that we act for and who often work horrendous hours to keep the business viable.

 

Margins too represent a current problem. Customers want low prices and often the larger retailers add to the independents burden by selling products for less than they can buy them for.  China has presented an opportunity to keep prices low but with increasing raw material costs hitting the World at the present time and the Chinese Government closing down more factories each week, for labour related issues, than the United Kingdom loses pubs costs from China are increasing – and rapidly. As a consequence prices in the shops will continue to rise as price lists are reviewed in an effort to keep margin alive and well.

 

Unfortunately in a weakening economy businesses have difficulty in winning the margin battle, not necessarily from customer pressure but in a competition with other businesses to win as many sales as possible whatever the profit or loss implication.

 

We see an interest rate increase as a bridge too far for our local economy. Many businesses are still trading well and we all need to drink from a half full rather than half empty cup. But the fact remains that the High Street is showing a large number of “To Let” boards and trading for many is weak. A rate increase could easily put the brake on and from there who knows what could happen. Therefore holding nerve and remaining positive is the key to managing the slowdown.

The fuel crisis – what can be done?

The fuel problem is a pressing issue as it threatens to stay with us for a considerable period. Had oil prices not rocketed to $135 a barrel the extra tax burden would have caused mild annoyance; it now threatens pandemonium. The Government are doing what they can to encourage increases in production to bring down the price, but is this likely to be successful?

We all know that we need to do more in terms of green issues whether it be use less energy or more recycling to reduce our carbon footprint; but 21st century life makes that difficult. Greener vehicles exist but little is done to push them by either Governments or manufacturer. Surely the long term answer rests in better tax incentives across the world to provide more efficient like for like vehicles not using petrol or diesel. If the G8 grasped this nettle then commodity speculation would eventually subside and oil would return to being a vanilla product forcing producers to drop their prices. It may not happen in the next few
years but will whatever pressure Gordon Brown brings to bear have an immediate impact?

The Apprentice – winner or loser?

We’ve followed The Apprentice since the first series with the same enthusiasm we held for Sir John Harvey-Jones in The Troubleshooter. However, in some quarters this enthusiasm is waning! We’re no longer sure there is any value to the show. Last week put the feather in the cap.

Lee lied on his CV – yet survived when three were supposed to be fired. Alex chose his moment to pounce and Helene jumped upon the bandwagon in carving up Lucinda to convince Sir Alan to fire her. As business folk are we supposed to cheer at these moments or shake our heads? The message it sends to those entering the job market are clear and a worry to those of us who try to act as honest brokers and in good faith. If these candidates are the best we can produce is the educational system still failing us or are these the best of a bad bunch trying an unusual method of getting themselves into the media. Who knows?

So who will be our winner? We have a strong consensus that it will be Clare but one wag suggested that it will be Sir Alan Sugar!

What do you think?