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Elections May 2012

The Coalition’s Mid-Term ‘Wobble’

By Simon Benson, Associate Director, London

When Sky News’ Adam Boulton came to speak to guests at a recent Fleishman-Hillard Business Breakfast, he described current political events as a classic mid-term ‘wobble’. It is the cyclical nature of politics that after a couple of years in Government, Ministers will be punished in local elections and Opposition parties will reap the benefits.

For Labour Leader Ed Miliband, the results look a little better than the actuality because his Party is still coming from an extremely low base, despite some gains last year. However, it has been a good few weeks for a man who has been battling to gain the respect and confidence of his own party faithful, not just the electorate. He has landed well aimed punches at Cameron over high profile issues, such as the recession and the relentless fall-out from the Leveson inquiry, as well as the unravelling of the March Budget. Easy hits, perhaps, but even sitting ducks such as these can be missed if political leaders pitch their attacks in the wrong way. Google ‘Lord Kinnock’ for a few examples. Miliband is successfully making Cameron appear angry and not in full control, while gaining confidence in his own rhetoric. With both David Miliband and Tony Blair signalling returns to UK politics, Ed’s current renaissance would appear especially well-timed.

This time last year, Insight Special was noting how the Tories had held ground after a year of being in Government. After the loss of numerous councils and nearly 400 council seats, Cameron today said ‘these are difficult times’, though it is unclear whether he was referring to his party, the country or both. Only in London will Cameron get a reprieve with the predicted re-election of Boris Johnson. But this is partly because Johnson has (once again) managed to disassociate himself from the Tory brand (and by definition, Cameron). It also shows the extent of his personal popularity, especially in the traditionally considering left-leaning constituency of the capital. At a meeting last year, I asked him if he still intends to take the Tory crown and he bridged expertly, like a man who had been very well media trained. But the eyes are the window to the soul, and they twinkled like the night sky.

Last year, I rather uncharitably described the Liberal Democrat leader in Insight Special as ‘Calamity Clegg’. Since then, he has passed the two immediate tests that faced him at that time; having the resolve to carry on in Coalition, taking the rough with the smooth; and carrying the support of his parliamentary party.  That resolve has taken him through the resignation of one of his most high profile Ministers, Chris Huhne, while supporting Tory cuts and reforms to the NHS that many of his party faithful simply cannot stomach. The Liberal Democrats are nothing without their well-oiled local election machine and the generally rather well-healed activists that operate it. Clegg will be squeezed even further by these activists on the one side demanding more Lib Dem influence at the top and Tories such as Gary Streeter MP on the other.  Streeter today said the results were a clear message to Cameron that voters ‘don’t think our leadership is Tory enough’.

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Tax Choices

By Toby Fenwick

Axioms are funny things; they are often so obvious as to be invisible. There are few things more axiomatic than that the old maxim that “to govern is to choose”.

Within government these tradeoffs are rarely starker than in tax policy, where the choices in the 2012 Budget continue to cause controversy: we’ve had scandal du jour over “Granny Tax”, “Charity Tax”, “Heritage Tax”, and most memorably, “Pasty Tax“. The latter is perhaps most memorable as it showed Prime Ministerial amnesia on his pasty consumption, matched only by the awful photo op of Ed Balls ordering 8 sausage rolls with the consummate ease of one who does it daily, whilst Ed Milliband and Rachel Reeves looked as if they’d never been into a bakery before (above). Indeed, commercial bakers Greggs have been in the forefront of the opposing the “pasty tax”.

But for our Pre-Budget outlook here at F-H, we assessed that there was a reasonable chance that the Government would curtail or remove the upper-rate relief on pension contributions. Currently costing £7bn per annum, the relief allows higher rate taxpayers to claim 40p relief from the Government for every £1 saved up to a maximum of £50,000 in contributions per annum. With average UK full time salaries at £26,200 in 2011, the number of people who can contribute £50,000 per annum into their private pensions is necessarily very limited.

£7bn is a real money at a time when the UK’s public finances remain dire – it is fully 5.5% of the 2011-12 fiscal deficit – curtailing the relief seemed a proportionate way of demonstrating that “we’re all in this together.” In other words, the distributional benefit is skewed towards the highest earners, whereas adding VAT to hot snacks – lampooned as the “pasty tax” – will increase the cost of sausage rolls and pasties for all, including many on low to medium incomes.

Instead, upper rate relief was left in place, and “pasty tax” was announced.

The political saliency of this issue is in this perceived unfairness. Assume for a second that demand for sausage rolls is constant irrespective of the VAT. How many sausage rolls (with VAT) are required to pay for upper rate relief?

Cost of a Greggs sausage roll in Hadleigh, Suffolk three weeks ago: £0.88

Implied additional VAT @ 20%: £0.176

Cost of upper rate tax relief on pensions: £7bn

Number of sausage rolls with VAT to pay for Upper rate tax relief: 39.77 billion

UK population: 62.26 million

Number of sausage rolls per head to pay for Upper rate tax relief: 639 (per annum)

In other words, to pay for the wealthy to have pensions tax relief, everyone in the UK needs to eat two Gregg’s sausage rolls a day for 274 days per year, cutting back to one sausage roll a day for the other 91 (3 days on, 1 day off).

It is this political reality that underpins the theatre. And it is these perceptions of fundamental unfairness that have bedevilled the presentation of the 2012 Budget.

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Sky News’ Adam Boulton at Fleishman-Hillard

Today’s Business Breakfast with one of the biggest names in British political journalism, Adam Boulton, attracted a capacity crowd from businesses such as Huawei, BAE Systems, Virgin Media, Aviva and Arup and charities such as the Francis Crick Institute, Oxfam and Cancer Research UK – as well as corp comms chiefs from the BBC and ITV.

Guests heard the Political Editor of Sky News talk about the future prospects of Cameron, Clegg and Miliband in a wide ranging on the record discussion on politics and broadcasting.   In a Q&A chaired by London’s Head of Public Affairs, Nick Williams, Boulton spoke about the next reshuffle, the rising stars at Ministerial level (David Gauke, Mark Hoban and Clare Perry were among those named), a talent drain in the Liberal Democrats and the change in campaigning techniques from ‘battle buses’ to TV debates. On broadcasting, he said the job of TV was to inform, not change voters’ political views.  Boulton passed comment on Education Secretary Michael Gove’s chances of promotion and speculated on Westminster gossip regarding a future swap of the top jobs at the FCO and Treasury. On the current political situation, Boulton said that the Tories were having a ‘wobble’ but that Boris Johnson will win the contest for them at the London elections in May.

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An American Intern in London

Since January we’ve had a wonderful intern in the technology team called Sarah. We wanted to share with you how she found her time with us. Here are her thoughts: 

I have to admit that when I was first offered a placement with Fleishman-Hillard last autumn, I wasn’t quite sure what to expect. I’m from Los Angeles, where I’ve had meetings with CEOs wearing Chuck Taylors and sweats, and I had been living in South Africa for most of the last year. Needless to say, my world has been far removed from the financial world headquarters that is London, with its suits and smart attire.

However, when I showed up on that first day (a few minutes late, as I hadn’t quite got to grips with the Tube), I was greeted with warm smiles and lots of encouragement. The last 14 weeks have been a wonderful experience working with the technology team and digging my hands into everything from media tracking and regional reporting to digital communications for brands.

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Would Like to Meet: Well-Rounded Candidates

Having read a number of pieces in national and trade media recently about the poor quality of current graduates applying to our industry (these pieces in The Guardian and PR Moment are a couple of fairly typical examples) I have to say I was approaching my role as assessor in Fleishman-Hillard’s Graduate Selection Day with some trepidation….. That was until I read the entry forms and CVs submitted by the candidates.

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Stay In or Go Out?

It’s that time of year again – the unashamed hyperbole; the backstabbing; the mixed, and often slightly bewildering, metaphors; the seemingly endless ineptitude and, my personal favourite, the need to announce that someone is ‘going to make a decision now’. That’s right, The Apprentice is back. Gracing our screens for the eighth year in a row the show remains, if nothing else, a great way to learn how not to behave in the workplace.

Last night’s episode didn’t fail to disappoint on that front – from Team Sterling talking all over each other in indignation in the boardroom, to Team Phoenix reinventing a solution to a problem that really didn’t exist to begin with – the usual elements were all there. What struck me most though, was the common disregard both teams seemed to apply to the process of finding out what their target audience might actually want. Focus groups were conducted but results were largely ignored on both sides; product ideas seemed to be considered valuable because one or two individuals thought they might like to have one of those and anything or anyone that indicated there might be flaws in this process was firmly bundled away into the ‘too difficult’ or ‘not a team player’ boxes.

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24 Hours Unplugged: The Lessons

Last week marked ‘The National Day of Unplugging’ in the US. Based on the Jewish Sabbath, the unplug challenge was a simple one: survive 24 hours, from sunset on Friday to sunset on Saturday with ‘no connection’. No internet, no mobile. A seemingly simple task for a ‘Digital Native’ like myself, surely?

One of the consequences of being a ‘Digital Native’ is that I have lived more years with computers, mobile phones and the Internet than without. Sending a press release via fax machine? This is an office joke I can only chuckle at but never fully understand and so I took it upon myself to disconnect for a full day.

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3D Printing: Coming Soon to a Kitchen Near You

3D printing is a concept which has been getting more and more column inches this year; but the general consensus amongst those I’ve discussed this with, is that they don’t quite know what the advancements in 3D printing will really mean in our day-day lives.

As with a lot of tech trends, we hear the hype, but we don’t immediately feel the impact. So what does 3D printing involve? And is it really going to become a process which we use in all areas of life?

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Event: Fleishman-Hillard Business Breakfast With Sky News’ Adam Boulton

We’re really excited to have one of the UK’s top broadcasters, Sky News’ Political Editor Adam Boulton, come to Fleishman-Hillard for a Business Breakfast on 18th April 2012. It starts at 08:15 at Browns, 82-84 St Martin’s Lane, London, WC2N 4AG.

RSVP to events@fleishmaneurope.com – places are strictly limited.

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Budget 2012: Becoming Europe’s Technology Centre

George Osborne’s 2012 Budget announcement is pushing for growth in Britain through investment, innovation, and tax incentives. Here’s a look at how this year’s financial plan will help turn Britain into Europe’s technology centre:

 Helping small businesses

Working to fight the rising levels of youth unemployment the Budget’s capital allowances, tax breaks, and the National Loan Guarantee scheme will provide support for tech start-ups by expanding credit availability and investment opportunities. This reduction of risk for investors and costs for small businesses hopes to foster growth in the Silicon Roundabout and to encourage other business hubs in the UK.

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