What is wrong with the Olympics?

And so the McGames are almost upon us. They are beset with problems because the entire event now has very little to do with sport and everything to do with the worst kind of sponsorship infused with quite a few vested interests and topped off with some very poor management. So many people who believe their own hype, it is worrying.

There has been no end of publicity about the various issues afflicting the McGames, however, we do keep being told how the event is under budget.  It has officially cost £9.3 billion.  Something like £163 for every man, woman and child in the UK.  It was supposed to cost the public purse £1.1bn, so it is manifestly over budget, but let's not worry. Lloyds Bank says that there will be a happiness dividend worth £165 for each and every one of us - we are even in profit, just. But hang on a moment. Aren't Lloyds one of the sponsors? Didn't they lose £3.5bn last year and don't they belong to the tax payer anyway? 

It has been said that the actual cost of the McGames is more like £24bn - more than £400 each. But surely we are getting current and long term benefits from the event. Says David Cameron, says Lloyds Bank and says Cadburys. Politicians and sponsors. One is a sponsor recycling taxpayers money - and that is probably all the recycling that will be going on as we shall see. 

Ask the Bank of England and they will say there is little or no benefit to the economy and Moodys claim no long term benefit at all. What is more, when LOCOG, the London Organising Committee of the Olympic and Paralympic games, has finished its work, the Government will have to pay up for any overspend on their part and this could be substantial.  

LOCOG claimed that it would offer a robust, fair and transparent approach to procuring". I'm not sure if they did or didn't but it certainly seems they make some terrible errors of judgement. 

We submitted a PQQ, a Pre Qualification Questionnaire, for a relatively small contract. The product was something we have a significant market share of and anyone serious about buying such a product would be well served to at least speak to us. We were told that our services were not required. However, believing that the the process would be covered by the European Public Contracts Regulations we thought we would be able to understand why we were excluded and then possibly challenge the decision. Not so. Because private money supplied by sponsors was being spent, there was no such protection for any supplier and LOCOG made up its own rules. 

I happened to speak to another supplier who was actually shortlisted for this contract. They were a small business that we had never come across before and are certainly not a key player in the market. That company was made to jump through hoops by LOGOC only to be dumped towards the end of the process. A middle man buying goods from overseas was given the work and some of the high environmental standards which were promised were ditched. The other supplier agreed with us that we were both probably better off without the headache. 

None of this should be any surprise. 91% of all official souvenirs were not made in the UK.  The seating is from Australia when a UK manufacturer is based only a couple of miles from the Olympic Park. Even the bell is coming from The Netherlands when there is a manufacturer here in the UK who is perfectly able to do the job.

Now back to the recycling. LOCOG set out ambitious environmental targets. A recent report  Towards a One Planet Olympics states that the legacy targets will are unlikely to be met in time for the games or even once they have finished. Oh dear. 

The brands which will dominate the games are about food and drink which at best is not especially good for you. At worst, young people will associate chocolate, sugary drinks, fatty fast food and (Dutch) beer with athletic performance. There has been much criticism and rightly so but the suggestion that this money is make or break for the event is not true. Sponsorship covers 10% of the cost. As for the nine of every ten pounds not covered by sponsors, you and I pay for it. Yet we get nothing in return. 

At the end of the day, the events over the coming few weeks may be viewed as a great success or possibly a disaster depending on what unfolds. For all of these criticisms there are undoubtedly good points but at the end of the day there is one simple reason why we should not be allowing this circus to take place. We cannot afford it. We cannot afford the cost, we cannot afford the disruption or the legacy which will continue to cost us and our children for years to come. If we are not able to educate our young, to treat our sick and to house our homeless it is frankly immoral to burn so many billions on an orgy of navel gazing like this.

From the Summit : Does anyone care about the environment?

Once again I have returned from The Times CEO Summit in London having spent a day with some of the UK's leading business leaders. Together we heard presentations, we debated the issues of the moment and we asked questions of politicians and entrepreneurs. The Times did an amazing job once again.

At the same event last year Rupert Murdoch sat at the next table with his son James on one side and Rebekah Brooks on the other. None of them were there this year, Brooks was in the dock and the Murdochs elsewhere. Last year David Cameron visited - this year we had to settle for Vince Cable and George Osborne. A lot can change in a year. The agenda was similar though - through the morning talk about picking winners and how to champion and finance new talent.

Whilst listening to a very distinguished panel of Ana Botin (CEO Santander ), Charles Dunstone (Chairman Carphone Warehouse), Brent Hoberman (Co-founder PROfounders Capital), Luke Jonhson (Chairman Risk Capital Partners) and Geoff Watts (CEO EDITD) the issue of green taxes was mentioned by Johnson. He said that it was no good if green taxes made us one of the less competitive places in the world.

Other than this, there was little other mention of the environment by anyone aside from Lord Mandelson briefly talking about his previous work on carbon reduction. It seemed that the environment was no longer on anyone's agenda. 

I like Johnson, or at least I liked him. His weekly column in the FT is insightful and compelling and his public speaking is interesting and engaging. But in the 1990s I used to read a magazine called BusinessAge. Johnson was always in it being quoted using the most foul language and portraying himself as a laddish hero. I felt that perhaps he should grow up. Years on it seemed he had.

Given the opportunity to ask a question I picked up on the point of green taxes to Johnson and also to the rest of the panel. I pointed out the recent report stating that if everyone on earth lived as we do in the UK, we would need three planets. In light of this, I wondered if the panel felt that economic growth should be pursued at any cost or if being environmentally responsible could actually be the opportunity for growth that we are all looking for.

I was bowled over by Johnson's response. He has no interest in the environment dismissing talk of "armageddon" and "paranoia" and stating that mankind would find a solution and that there would be rational solutions coming forward [for global warming]. To think otherwise would be to embrace decline and would lead to unemployment. 

None of the other panelists wanted to comment. It seems that as long as the UK is competitive and we have economic growth then the planet does not matter.

This is fundamentally wrong. The key to sustainable growth has to be respect for the environment. Rather than making us uncompetitive we should be embracing the circular economy and rebuilding our own manufacturing sector in a new and forward thinking way. 

If Luke Johnson has an open mind I would welcome the opportunity to show him how our factory at Straight plc has been transformed by pursuing a low carbon agenda. How almost all the raw material we use is now recycled and how our energy will come from the wind. How this has transformed not only our thinking but our profitability too. 

Camilla Cavendish who is Associate Editor of The Times told me afterwards that she used to cover a lot of environmental stories but it seemed this had fallen by the wayside. But talking about these issues in a "we can't afford it" kind of way misses the point. It is not just about global warming but about having a business that can survive long term by making more with less. 

Like me, Luke Johnson has young children. It is time we all worked to make the world a better place for them without stealing their future from them. Time to grow up. 

Mayor for Leeds?

In a couple of days time, the people of Leeds will be able to vote on whether they want a directly elected mayor. To be honest, until quite recently I was not even aware that a referendum was happening. It has not been widely publicised and is not even mentioned on the polling cards. These just refer to changes in the way that Leeds City Council is run.

I was asked a couple of weeks ago if I was in favour of a direcly elected mayor and I thought that for a city like Leeds this would be a good thing. I posted a couple of tweets about this and as a result the Yes Campaign in Leeds got in touch.

Next thing I was on the BBC1 Sunday Politics Show debating the issue and speaking passionately in favour of a mayor for Leeds.

Whilst I cannot speak for any other city where a referendum is taking place, I do believe that a directly elected mayor for Leeds will be a great move forward. Leeds is in the top 100 on the world stage by GDP, is is the 24th most populous city in the European Union and it is classed as a gamma city, in other words a key node in the global economic system. As a result, Leeds needs to hold its own on the world stage, it needs a strategy for growth and investment and it needs to punch above its weight. A directly elected mayor could achieve all of this and more.

Whilst all of the three major national political parties are in favour of elected mayors, all of the local parties are against this. Is this because their cosy coterie of power might be under threat? Is this why they are all keeping so quiet about the issue?

Councillor Jack Scott from Sheffield, with whom I appeared on the Sunday Politics Show, says that a directly elected mayor would be an "elected dictator" and would cost a lot of money. This is the level of the no campaign. Oxymoron and scare mongoring. They have nothing positive to say, they are concerned with maintaining the power base of the elected few who then choose their own leader. They seek to deny the people of a great city like Leeds the say on who runs their affairs.

Other "no" arguments are that one person would have too much power. But the mayor would have to have 40% of the council vote with him and don't we now have a prime minister for as set term? This brings stability and rises above party lines.

Other scare tactics being used are the suggestion that the mayor could appoint "cronies". Again, not true. All members of the mayoral cabinet would have to be elected councillors.

Were anyone in any doubt as to why the old guard should be voted out and a new era of leadership ushered in, then they should look at the behaviour of the leader of Leeds City Council, Keith Wakefield (pictured).

Mr Wakefield (who thinks he is Mr Leeds) is against a directly elected mayor. He is calling for a no vote. He has stated that a mayor would be "undemocratic" and "utter madness". Yet he has also said that is there is a yes vote in Leeds, then he would stand himself.

The people of Leeds should treat this outrageous and duplicitous statement with the contempt it deserves and fight back by coming out of their homes this week in droves to vote yes for a mayor for Leeds.

Fuelled by ignorance

With much of the media this morning seeking to blame the Government for causing a fuel crisis where there wasn't one previously, once again it looks like the Great British Public are unable or unwilling to take any responsibility for themselves. The flames are then fanned by our irresponsible media.

It is true that Downing Street has handled this issue with appalling ignorance and in a blundering and uncoordinated manner. However, it is also clear that a potential strike is at least 11 days off and there is no risk of industrial action over the Easter weekend.

Can we really blame government of whom people take little notice of anyway? Are people so stupid that they blindly follow the media-induced panic propagated by the tabloids? No. There is only one thing that has caused this crisis and that is selfish and ignorant behaviour on the part of individuals.

I wish our great nation would just get a grip and stop blaming everyone else for its problems. Here is some simple advice. If you don't need fuel, don't buy any.

Budget sense on share options

There really are some truly amazing photographs of George Osborne on the web. This one is nearly as good as the one I used when I spotted a hole in the sole if his shoe in Manchester last September.

When the last Government raised the rate of Capital Gains Tax to 28% I was a very vocal critic. The minmimal Entrepreneurs' Relief that followed was a bit of a joke and I remember the Daily Telegraph quoting me at the time as saying, "Thank you Alastair, you've really made my day!".

Fortunately, the Coalition Government saw sense and have raised the limit to a much more meaningful £10m threshold for the lower 10% band to apply, but to me there has always been a problem with this. It is not just the owner of a business who makes it successful and the tax regime has to date only favoured business owners.

I felt that my dedicated staff who have share options should also be able to benefit from this reduced tax rate, but as things stood they would pay 28% and I would only pay 10%. Given that the amounts the high rate would apply to would be generally relatively smaller, this seemed very unfair.

Just after David Cameron came to power, he visited Leeds and I asked him about this issue. He didn't get it and just answered that he thought it was right people should pay tax. I agree with him here, but what I don't agree with is the imbalance and injustice of the two tax rates.

I had another crack at George Osborne in Manchester last September. I am pleased to say that I got a bit further here with George acknowledging the problem and understanding it.

It looks like George has now done something about this, announcing in the Budget that all holders of EMI share options will qualify for Entrepreneurs' Relief.

So George, thank you for listening!

PS. I think the cap on income tax reliefs is going to impact badly on charities, so George, if you are reading this, please exempt gifts to good causes.

Yorkshire Banks

Attending the Yorkshire Mafia Conference in Leeds today was an inspiration. There was a real energy around the event and this combined with some good news for businesses in the Budget led to a general feeling of positivity.

I was part of the Billion Pound Panel. This included a number of key local business leaders: Paul Caplan the owner of Go Outdoors; James Lambert, CEO and Executive Chairman of R&R Ice Cream; Lawrence Tomlinson, Founding Chairman of the LNT Group and Colin Graves, Chairman of Costcutter Supermarkets. According to the Yorkshire Mafia we have combined revenues of more than £1bn. 

We were there to take questions from the audience about their interests and concerns. These ranged from the use of social media to rates of taxation to environmental initiatives. Inevitably the discussion also turned to funding for business and one of the panel had expressed his disbelief at how the banks are currently behaving.

Chairman of the session, the very talented and entertaining Gary Verity, CEO of Welcome to Yorkshire, asked the audience how many of them were happy with the service they received from their bank. Just three people put up their hand. 

I counted over 200 people in the audience. All stakeholders in the local economy and many running local SMEs. 98.5% of them not happy with the service they receive from their bank. 

I would imagine that any other industry with such dire customer satisfaction would be devastated at such a result. Is it possible that banks don't know that there is such a level of dissatisfaction? Are customers too scared to express their real feelings? 

Or is it that they know full well and frankly they are not too bothered about the situation because there is limited competition and for every customer they lose they probably gain another one?

I was shocked by the almost universal extent of this problem but I was not surprised. I could not help thinking that this potentially creates an incredible opportunity for someone to come in and change the game. It can't happen soon enough. 

Are we lacking ambition?

Eurostat, the statistical office of the European Union has just advised that the UK recycled 24.8% of its municipal waste during 2010. Allowing for waste which was composted the rate increases to 38.8%.

The rest was either incinerated (12.2%) or landfilled. The amount of municipal waste being landfilled was a shocking 49% of the total - or in other words more than we recycled and composted.

The EU Directive target is a 50% recycling rate by 2020 and whilst the Coalition Government thinks that individual councils should not have to comply with this target, overall the UK still has to reach it. The Environmental Services Association believes it will cost £10bn to £20bn to upgrade the UK's waste infrastructure to achieve this. Yet we could do far more with much less using simple systems, common sense and a bit of ambition.

There are already 75 councils in the UK meeting or beating the 50% target. Many of these are using simple kerbside sort methods to achieve their results. Without an investment in MRFs or expensive and energy hungry processing plants high recycling rates are perfectly possible and the proof is there for everyone to see.

Delivering a kerbside sort model with separate food waste collection, home composting and chargable garden waste collection will result is less residual waste. Put in a bit of educational resource and it gets even better. This will not cost billions, most can be achieved using the existing infrastructure.

The material collected in this way will be of a much higher quality and as a consequence will be worth more money. Keeping everything in the UK instead of shipping to India and China will create jobs and opportunities and will keep increasingly scarce raw materials within our shores.

With the recent Defra consulation on recycling targets, the Campaign for Real Recycling victory over Defra's extrapolation of the EU rules and the forthcoming MRF Code of Practice we have a real opportunity to build a better future with more and higher quality recycling in the UK. Alternatively, we can stick at 50%, burn the rest and burn billions in the process. The right way forward requires clarity of vision and a bit more ambition from our politicians.