The greatest British orchestral composer of the last fifty years was not someone of whom we have never heard, whose state subsidised music is played only by state subsidised musicians in state subsidised venues. He and his music are in fact very well known.

John Barry, who died last month, merits comparison with the great “classical” composers – and was able to combine artistic achievement with huge commercial success.

So why was this outstanding Briton, who was admired all over the world, never given a knighthood by his own country? After all, lots of the obscure state subsidised types were knighted. That is, of course, the point.

Like many of the most talented and successful Britons of his generation, Barry was a tax exile. He was forced to live abroad by British tax rates that were punitive in the most literal sense – they punished achievement.

As a result, instead of receiving a reasonable portion of his considerable earnings at the peak of his career, the British state got nothing from him. Withholding a knighthood was the state’s petty revenge for a situation created by its own short-sightedness.

Eventually, again like many of his contemporaries, he returned to Britain in the 1980s after Margaret Thatcher reduced higher rate tax. It is therefore no surprise that the total paid in taxes by higher rate taxpayers in Britain actually increased as a result of that tax cut.

So Boris Johnson, the Mayor of London, is right to call for similar tax cuts today. He is certainly speaking in the best interests of his own city. London has probably benefitted more than anywhere else from the relatively low tax rates that prevailed from Mrs Thatcher’s time until very recently. Not only did the capital become home to a disproportionate number of the returning exiles; it also attracted a large number of wealthy foreign entrepreneurs. These people have contributed to the local economy, and they have also enhanced London’s social and cultural life. It was after the tax cuts that London regained its Swinging Sixties reputation as one of the most exciting, vibrant, and “happening” places in the world.

Nor is it coincidence that many of the talented people who made the original Swinging London in the Sixties became, like Barry, tax exiles in the Seventies. Those who think them hypocrites for that should ask if the real hypocrites are not those who impose taxes on talent and then wonder where all the talented people have gone.

The United Kingdom is not as united as it once was. In 1999, Scotland and Wales were granted “responsible government” in the form of their own legislatures, and Northern Ireland has its own Assembly.

This “Devolution” has so far had little effect on business, either in the countries in question or in the UK as a whole. The new legislatures are dominated by local party hacks with little interest in, experience of, or sympathy for private enterprise.

Yet if they have done nothing good for business, at least they have done little harm ... aside from neglect. They have been content to set their local economies to cruise control, relying on subsidies from the UK taxpayer. As a result, the public sector represents a much larger percentage of the economies of the three “Celtic fringes” than it does in England, the fourth, largest, and most prosperous of the nations that make up the UK.

They may soon be forced to change. With the UK as a whole facing public spending cuts, it will not be long before the more enterprising English start complaining about subsidising dependant Scots, Welsh, and Northern Irish.

That consideration may have prompted the Scottish National Party, who are currently in power in Edinburgh, to come up with a package of proposals that would have a profound impact on business. The proposals themselves are a mixed bag – some good, some bad – but the fact that they are being discussed points the way to the future: for good or ill, private enterprise is now on the agenda of the devolved legislatures.

In theory, it could be very good for all concerned. The new legislatures have some excellent role models very close to home. Jersey, Guernsey, and the Isle of Man are “Crown Dependencies”, nominally independent states subject to the Queen as Queen but not part of the United Kingdom. In practice, this gives them considerable autonomy, which they have used wisely. Cutting tax rates and deregulating, they have attracted capital from the rest of Britain and abroad, and have prospered as a result.

Scotland, Wales, and Northern Ireland could prosper in the same way – if they were prepared to take the risk.

On the whole, British small businesses are unimpressed by the Confederation of British Industry (CBI), the organisation the media trots out when it wants someone to “represent business”. The CBI is actually the voice of big business, and it is dominated by people are too frightened of rocking the boat – lest it endanger their firms’ government contracts and their personal hopes for knighthoods or peerages – to speak out boldly.

So it is a pleasant surprise to read the outgoing President of the CBI, Sir Richard Lambert, telling the truth very bluntly indeed. It is perhaps significant that he is the outgoing president, that it was his last major speech in office, and that he is already a knight. Perhaps he felt he had nothing to lose. Clearly there will be no Lord Lambert.

Sir Richard, as he will remain, started by reaffirming that business supported the British government’s spending cuts. However, he went on to say it was “not enough just to slam on the spending brakes”.

If government wants the private sector to generate employment – not least to replace jobs lost in the public sector through cuts – then government should be “making it easier to employ people, not harder”.

The opposite is happening. Politically motivated initiatives are actually damaging the private sector, says Sir Richard. Although, typically, the government-owned and centre-left BBC report neglects to mention it, this is clearly a reference to the generally despised Equality Act, and to the proposal to extend paternity leave, among other things.

It seems that the current British government, like its predecessor, will pay lip service to the needs of private business, because it knows it needs it, but has no real sympathy for it. Given a choice between increasing the nation’s wealth and engaging in populist stunts, no matter how damaging, it chooses the latter every time.

Sir Richard sums up the problem by saying that the British government lacks a broader vision of what the economy should be.

This is a fair criticism – but it applies to more than just the current British government. The same can be said of its predecessor, and of the American government, and of most of Western governments of the last twenty years.

To find governments that really cared about productivity, we have to go back to the Cold War period. It cannot be denied that the socialist regimes of the East had a vision of their economic ideal, albeit a nightmare vision. What the West needs are governments that share the obsession of totalitarian states with increasing production figures, but which realise that liberal free-market policies are the best way to attain them.

The early Christians knew a thing or two about marketing.

The Gospels do not give the actual date of Jesus’ birth. However, anyone living in an economy dominated by pastoral agriculture would take Luke’s mention of shepherds watching their flocks by night as a definite reference to spring or summer, when sheep were out in the pasture. Most of the astronomical theories about the Star of Bethlehem point in the same direction.

However, the primitive Church used the absence of a specific date as a pretext to rebrand pagan mid-winter festivals as Jesus’ “official birthday”, so that converts would not have to give up a popular holiday.

So complaints about the “commercialisation” of Christmas rather miss the point.

Those who seek a purely Christian festival have usually valued Easter and Pentecost more than Christmas, which has always been more about conspicuous consumption to cheer everyone up during the very darkest days of winter. This was followed soon enough by a period of fasting – Lent making a virtue of necessity as winter food stocks ran out.

The modern equivalent is the splurge on the credit card in December followed by belt-tightening in the New Year. Scientists have shown how a decrease in sunlight causes depression, but consumption releases chemicals that can counter that depression – so Christmas may be part of our biology.

The precise pattern may be changing. Many in the UK are worried that the devastation of the retail sector by snow in the week before Christmas may have a disproportionate effect on national economic growth for the whole year. This effect may be magnified by a rise in sales tax, called Value Added Tax in Britain, coming into force just in time to negate the usual post-Christmas discount sales.

These worries are probably overstated. While overall economic conditions mean this year is unlikely to be outstanding, the probability is that Christmas has been postponed rather than cancelled. That biological cycle is still at work, and a little snow and a small tax rise are unlikely to make that much difference.

So it will probably be a Merry Christmas after all – eventually.

One of the more amusing snippets to be found on WikiLeaks is a memo from a rather humourless American career diplomat describing a jolly-sounding lunch with Prince Andrew, the Duke of York, who was in Kyrgyzstan to promote British business interests.

The media tell us that the Prince has been “criticised” – for his remarks

...not by the business community! On the contrary, it is a pleasant change to see our business interests being represented by someone who sympathises with us and understands some of our problems. The American diplomat also refers to the Prince’s “unmitigated patriotic fervour” – which is just what any country would like to see in someone selling it abroad, and which one rarely sees in career diplomats. The Prince’s main points are summarised below in italics, followed by our comments.

1   “Doing business in Kyrgyzstan involves dealing with corruption.” Did anyone think any differently?

2   “...Just like France.” A bit unfair ... perhaps. France may not be quite that bad – but French officials certainly know how to make your life Hell if you do not play ball with them.

3   “Outsiders cannot change the culture of a country any more than they can cure someone of anorexia.” If only Western governments grasped this simple truth, a lot of unnecessary suffering could be avoided.

4   “Russia is playing the Great Game in Central Asia again and this time Western governments should win.” A brilliant analysis, putting current problems in their proper strategic and historical context, which has so far escaped the Western governments themselves.

5   “The media are not helpful when business deals are being negotiated.” You only have to look at England’s 2018 World Cup bid for proof.

6   “The British anti-corruption investigation of the Al-Yamama deal with Saudi Arabia was idiotic.” Self-evidently true.

7   “British and American governments plan for 10 years where people in Central Asia think in terms of centuries.” Another brilliantly perceptive observation.

8   “The British are better than the Americans at geography.” A generalisation to which there are numerous exceptions on both sides. However, British businessmen are generally pro-American and go to great lengths to find out about America, and are often shocked to find how little many American decision-makers know about the rest of the world. Our humourless American career diplomat seems to be a case in point.

German business confidence is high. The country that gave us the Wirtschaftswunder, the original post-War “economic miracle”, may be Europe’s best hope for the future.

Perhaps the real miracle is that the Germans are so optimistic, given Germany’s underlying problems. The labour market is still over-regulated and Germany’s welfare state ensures that salaries are a relatively small proportion of the costs of employing people there. Germany is also the cornerstone of the ailing single European currency, and will almost certainly be presented with the bills for bailing out a succession of less disciplined countries in the near future.

Nevertheless, Germany has definitely retaken her traditional position as Europe’s most competitive economy – after losing it, briefly, to the UK in the mid-1990s. Other nations would do well to study the reasons for this...

1              Fiscal Discipline. Two years ago, German politicians from both sides of the political spectrum were united in their contempt for British and American plans to spend their way out of recession. Instead, they followed their own strict austerity programme. The result: Germany was out of recession before the UK and the USA, and is now two years ahead on the road to recovery.

2              Technology. Germany defies the decline of European industrial competitiveness thanks to a national obsession with constant technical innovation and precision. The Germans accept they cannot compete with the developing world on price and instead dedicate their whole economy to competing on quality. In Germany engineers have more status than lawyers – if only America could say the same!

3              Education. German Universities may not be as trendy as the American Ivy League or British Russell Group, but the German secondary education system is one of the best in the world, and their commitment to technical education is, predictably, given the national obsession, unsurpassed. A general population who are literate, numerate, comfortable in foreign languages, and technically skilled provides a better pool of potential entrepreneurs and key workers than a surplus of academic degrees.

4              Reputation. The emphasis on technical quality pays off. The German brand name is as strong as ever. Success builds success.

Britain’s new economic strategy is sound: cut the wealth-consuming public sector and expand the wealth-producing private sector.

This is no more than simple common sense. Yet the UK’s public sector has been expanding for years while the private sector has not been growing as it ought. The laws of mathematics tell us that the inevitable consequence of increased expenditure and insufficient income is debt. It is a shame that it took a recession to force Britain to face that reality and try, at last, to reverse both trends.

The problem is that, in adopting this laudable strategic objective, Britain’s new Coalition government has no idea how to achieve it.

Here is how to do it. Do not try. Just let business get on with it. If the politicians and bureaucrats would leave us alone – and by that we mean take away all their meddling, interfering regulations, rules and compliance burdens – the private sector would not only achieve their objective of taking up the slack of the reduced public sector but would go on to expand far more than their narrow little minds could ever imagine. History proves this.

However, the politicians do not really have faith in this. Unless they are prepared to act on their words, business will not be able to take up the slack. The strategy will then be perceived to be failing, then blamed, then abandoned – without really having been tried.

If they rely on business, they must trust it. They must take us seriously when we say that legislative interference like the “Equality Act” in the UK, the maternity proposals of the EU, and the poorly drafted healthcare reforms in the USA, will prevent us from completing the tasks they have assigned us, to generate income and employment.

They must also understand that no government schemes or spending programmes designed to “help” business can make up for that interference. For President Obama to tout a “Small Business Bill” after approving the pork barrel of the stimulus package and federal healthcare is like shooting a man in the guts and then offering him a Band Aid.

Similarly, the language of the new British government is suspiciously reminiscent of its unlamented predecessor, which thought a few handouts to selected businesses – its friends – could compensate for increased tax and regulation that drove businesses and jobs abroad.

Message from Business to Government: Yes, we can take up your slack for you – but only so long as you do not try to “help” us – just get out of our way.

What are we to make of the UK’s higher than expected 1.1% growth in the last quarter?

Not too much. It is a one-off combination of a slight rise in confidence as a result of having a new government and the economic effects of the high spending policies of the previous government.

Neither will last. The high spending was always going to end after the General Election, irrespective of who won, and the novelty of having a new government will soon wear out when the spending ends and the cuts begin. There is no doubt that those cuts are necessary – indeed, long overdue – but they are going to hurt, and they are going to hurt business more than most. Many businesses rely on government contracts, and civil servants will cut outside contract before they cut their own numbers or salaries. Even businesses with no government contracts will see their overall markets contract.

Added to this is the weakness of the EU as a whole identified in a recent IMF report. This is the culmination of problems that have been building up for years – over-regulation of business, pension obligations, structural deficits, and all the other “usual suspects”. Some have been warning about these for years, but those in power have laughed at them and simply borrowed more money. Now the bill collectors are at the door.

Although the UK is guilty of some of the same economic crimes, Britain is not as badly exposed as some other EU states – at least not yet. The more immediate danger for British businesses is that their European markets may be contracting at the same time as their domestic markets.

However, we should not be too gloomy. The dreaded “double dip” recession still seems unlikely. Yet the fact that the Bank of England predicts that interest rates will remain low for some time is hardly a sign of confidence.

Things are never as bad as they seem – but they are never as good as they seem either.

We had no sooner posted our last blog entry than we read official confirmation of everything we said about governments not listening to people.

Britain’s new Coalition Government made a great show of asking for public “input” on a range of issues. Almost ten thousand people took the time and trouble to send in their thoughts, but there have been no substantial changes to government policy as a result of them.

The whole thing was a public relations exercise.

We should not pretend to be outraged or even surprised by this. In any organisation, from a government to a small business, power belongs to those who control policy. No one in their right mind is going to give up that control or their own power.

Even ideas can be instruments of power. An idea has no value unless it is owned by someone with authority within the organisation. If he can call it “his” idea, then it increases his own power and he will promote it. If he cannot call it “his”, then it is in his personal interest to block it in favour of some idea of his own. Whether the idea in question is good or bad is of secondary importance.

In the case of the Coalition Government, power lies with those who agreed its programme. It is absurd to imagine that some suggestion off the street would ever be allowed to alter that programme.

In the case of a small business, power lies with the entrepreneur. Requests for customer feedback and suggestion boxes are never going to take the place of the entrepreneur’s own vision for the business.

If the entrepreneur has no such vision, so that he actually depends on customer feedback and suggestion boxes because he has nothing else, he will not be an entrepreneur for long. The same is true of a government.

So the whole point of any consultation process is not to generate ideas, and certainly not to make policy, but to make the consulted feel happy and important because they have been allowed to have their say.    

As the Nobel Laureate novelist John Steinbeck put it, “You do not want advice – only agreement”.

Government bullies business and big business bullies small business. Such is the order of things.

However, although business can exist without government, and often has done, government cannot exist without business to finance it – and small business is in many ways more indispensible to the country than big business.

We have always stressed the importance of small business but the statistics that prove it still come as a bit of a shock.

According to figures from the British government – a source not exactly biased in favour of small business – there are 4,800,000 small businesses in the UK, as opposed to 7,000 big businesses.

Those small businesses contribute more than half of the nation’s turnover – and more than our fair share of the taxes that fund its public services: governments give tax breaks to individual citizens because they can vote, and to big businesses because they can always move offshore, but we are the easy targets.

At a time when politicians profess particular concern about jobs, you would think that they would love small business for employing 58% of the private sector workforce in the UK – and, of most immediate importance, providing the vast majority of new posts. Small business is the most efficient engine of recovery from a recession caused by the follies of governments and big businesses.

Small business is also the country’s best hope for the longer-term future – the provider of 69% of apprenticeships and the source of 64% of commercial innovations.

We should be valued for this. We should be loved. Politicians should be falling over each other to ask us how they can make our work easier, so that they can help us rebuild our country.

Yet we are ignored. The loudest voices when it comes to actual policy are those of the bureaucrats and the politicians themselves, then those of big business and other special interest groups. The polite complaints and requests of the small business lobby, such as it is, carry no weight.

The only protest we can make is with our feet: we retire or we emigrate. Even then, the politicians do not notice our passing. They only complain that the economy is not growing as fast as they want – but they profess to be mystified why this is the case. We could tell them – indeed, we have told them – but they do not want to listen.