Ertblog

Don't fear a hung parliament. The pound will cope

The Tories have been desperate to convince people that a hung parliament would be a disaster. They suggest our currency would be shot to pieces, claiming that our experience in the 1970s offers a grim portent of what might follow.

Veteran Tory politician Ken Clarke cited Labour's decision in 1976 to ask the IMF for a loan as an image of what happens under hung parliaments. But Ken got it seriously wrong. Britain didn't have a hung parliament in 1976. Or in the other years when sterling was on life support: 1949 and 1967 (Labour) and 1992 (Conservatives).

The story of that IMF bail out isn't as clear cut as right-wing legend would have you believe. Labour's decision to go to the IMF was prompted by Treasury forecasts that later proved unduly pessimistic. We didn't actually need the money in the end. Andy Beckett's enthralling account of the Seventies, When the lights went out, sets the record straight.

Eyjafjallajökull volcano chaos reveals crazy world of UK travel insurance

Eyjafjallajökull. It's a name few newsreaders have attempted to pronounce. But there's no doubting the chaos this Icelandic volcano has caused, as its ash cloud forces a prolonged shut down of our airline network. It's also shown that travel insurance doesn't guarantee you won't be heavily out of pocket when things go wrong. 

The insurance industry sells peace of mind. But thousands of travellers have found their travel policy has instead given them a large financial headache. There's no standard British travel insurance policy. This means that some people are covered for the costs they've had to meet after being stranded by the ash cloud - but others aren't. And some insurance providers, such as HSBC, have decided to make goodwill payments, despite not covering natural disasters.

A lot of commentators have said insurance doesn't cover 'acts of God'. This is an urban myth, as the Association of British Insurance has confirmed. Insurers are agnostic about the existence of a greater being. They insure the consequences of a host of natural events that believers might call acts of God. The problem is that modern insurance policies tend to set out what is specifically covered. If your misfortune isn't on the list, you're on your own.

The other problem is that most travel policies were designed when we all took package holidays. If you're one of the millions who book your flights, hotels and car hire separately, you need to make sure your policy covers the indirect costs, such as hotel bills, if your airline can't run the flights you've booked. Many traditional policies cover delayed departures but not the consequential expenses you incur when your flight is cancelled. This is where the newer policies designed for independent travellers, such as M&S's, come into their own. They may cost more, but the extra few pounds buy that fabled peace of mind.

Disclosure: I was head of PR for M&S Money 2005 to 2008

7 Apr 2010

You can't blame business leaders for fighting Labour's increase in National Insurance. But the Tory campaign against the rise is fundamentally dishonest.

This is the party that demanded immediate action to cut the debt created by bailing out the capitalist bankers. It wants swingeing cuts in public services and inheritance tax cuts for their millionnaire friends.

Never trust a political party in an election...

Too close to call? Gorkana speakers reject the social media election

Social media will have minimal impact on the imminent British general election, according to top journalists speaking at Gorkana PR's latest breakfast debate, Too close to call. 

The Wall Street Journal's Iain Martin wittily described the 2010 campaign as Britain's fourth 'first online election'. The Guardian's business editor Dan Roberts added that the televised leadership debates are likely to have more impact than political campaigning on Twitter or Facebook. 

Although the parties are keen to lear from Obama's supposed social media success, the reality is that people don't join Facebook to get bombarded by political messages. Politicians who try to gatecrash may find their efforts have the opposite effect. America, as always, is different. Obama's social media campaign was about fundraising, not changing opinion. The race to the White House took two years, not the five weeks of most British election campaigns. And presidential races involve scores of rival candidates from the same party, not just one already-selected party leader. 

Most of the Gorkana speakers thought the Tories would win the election, despite running a text book example of a disastrous campaign. Jeremy Warner contrasted Cameron's campaign with Labour's 1997 triumph. Labour was utterly focused in '97, trashing the Conservatives' economic record, but saying little about their economic plans. By contrast, Cameron's decision to say he'd slash public spending has backfired disastrously, leading to a swift u-turn. Iain Martin argued that Tory strategist Steve Hilton's 'detox' strategy to make voting Tory respectable should have given way to an all-out attack on Labour's economic record. Interestingly, he showed that Cameron has a late finisher: making up time to win his degree; coming from behind to win the 2005 leadership race. 'This is the biggest essay crisis of his life.'

Dan Roberts lamented the lack of ideas from the parties. We've seen the greatest crisis of capitalism for 70 years - yet the left have totally failed to capitalise. But the greatest criticism was reserved for the Tories. As Iain Martin said, where's their passion? They have an open goal, yet it's the Tory economic plans that are under the most scrutiny, thanks to the decision to announce the slash and burn spending approach.

Finally, George Pascoe-Watson revealed that the Sun almost proclaimed Nei Kinnock the winner of the 1992 election under the headline One foot in Downing Street. The paper then ran the notorious attack on Kinnock. Let's hope the paper has no impact on the outcome this time. Ironically, Labour was lucky to lose 18 years ago. Major's government never recovered from the shattering sterling crisis five months after that triumph, leaving Labour in power for 13 years.

The Gorkana debate was chaired by former Sky News business editor Michael Wilson. The speakers were George Pascoe-Watson from Portland PR; Daily Telegraph assistant editor Jeremy Warner; Guardian business editor Dan Roberts; and Wall Street Journal Europe's deputy editor Iain Martin.

Revealed: Virgin Media's bandwidth crisis

We've had Virgin broadband for five years. We've been very happy with the service - until two weeks ago. Our broadband connection suddenly slowed to the extent the BBC iPlayer stopped working. 

Tonight, I phoned Virgin for the third time to find out what was going on. The company told me they had seriously underestimated the popularity of the BBC iPlayer and online services such as gaming through the Xbox. As a result, Virgin customers who connect through a local BT exchange are getting just 500 kilobits per second rather than the billed 8 megabits per second advertised. 

They reassured me that things would improve over the next couple of weeks. 

Shame they didn't tell me that when I called on Saturday and last night, resulting in a wasted couple of hours going through a checklist they emailed me to identify possible faults. 

Why Britain needs a strong BBC

The BBC confirmed the worst kept secret in British broadcasting: it plans to close its 6 Music and Asian Network radio stations and halve the size of its website, www.bbc.co.uk. The BBC's strategic review is aimed at appeasing Conservative critics and commercial rivals. Rupert Murdoch's News Corporation has long waged a deeply self interested campaign to emasculate the BBC.

The BBC is always an easy target. But in tough times, the compulsory licence fee gives it a huge advantage over commercial rivals, who are struggling with the long term decline in newspaper sales as well as the collapse in advertising revenues during the recession. And the corporation has scored a series of spectacular own goals in recent years, from the mismanaged redevelopment of Broadcasting House to the Jonathan Ross/Russell Brand scandal. Not to mention all those highly paid middle and senior managers.

But the BBC remains the world's biggest, and most respected, broadcaster. It was right to expand into digital broadcasting and online news in the 1990s, displaying far greater foresight than many of its commercial rivals. And in the words of its 1980s John Cleese advert, it's still the biggest bargain in Britain: a host of national and regional television and radio stations, plus one of the world's best websites, for £142 a year. 

We can dismiss the deeply self serving Murdoch campaign against the BBC. Murdoch would love to see the corporation dismantled, to leave a rump public service broadcasting operation funded by subscription. That would leave him far greater freedom to expand Sky's market share and charge for his online content. His son James Murdoch led the call for the BBC to be cut back in last year's MacTaggart lecture, describing the BBC's expansion as chilling and mocking its 'state sponsored journalism'. Yet all the surveys show the public trust and respect the corporation, even as they rail against repeats and over-paid bosses. It's significant that Margaret Thatcher was rebuffed when she wanted to replace the licence fee with advertising - turning her attentions to ITV instead.

But it's far from clear that the proposals to reduce the BBC's costs unveiled today are the right response to criticism. Director general Mark Thompson was characteristically incoherent in explaining why axing 6 Music, the Asian Network and half the website was the right approach. 6 Music was distinctive but didn't have enough listeners, he argued. (Whose fault is that?) But if it had more listeners it would threaten commercial rivals. (Unlike the mass market Radio 1 and Radio 2?) And he made matters worse by descending into gobbledegook:

"The BBC is part of public space because the public themselves have put it there... Public space is an open ... environment. There are no paywalls in public space."

How can the leader of Britain's leading broadcaster talk such nonsense? But we shouldn't be surprised. Thompson is notoriously unable to explain what he means. The author PD James famously left him tongue-tied in a Today interview last December. And a more regular interviewer, John Humphrys, ran rings round him in an interview about the BBC's controversial decision not to broadcast DEC's Gaza appeal last year. If BBC bosses must enjoy extravagant salaries, they should prove they're capable of making their case on air. 

It seems particularly perverse in an online age to promise to axe half the BBC's website. This seems a totally arbitrary sacrifice. Why half? No doubt there are sections that don't fit the BBC's allegedly more serious approach. But the 25% cut in spending online is highly questionable. 

And the plan to close 6 Music is similarly misconceived. The station costs the BBC £9m a year - just £3m more than Jonathan Ross's salary. By common consent, it's highly regarded by its (small) audience. And the Beeb has done little to promote it on other stations - despite its interminable adverts within stations. (Radio 5 Live's constant adverts are intensely annoying.) A vigorous Facebook campaign is now underway to save 6 Music. No doubt supported by Tory culture spokesman Ed Vaizey's shameless attempt to curry popular favour by claiming he's now a fan, just days after saying he'd never heard of the station. 

I suspect 6 Music will survive. Instead, Thompson should take an axe to the BBC's bloated management and its related expenses. And he should learn to make a positive case for the BBC's role in the life of the nation. We'd all suffer hugely if the BBC disappeared.

DAB car radio: it's a Mini misadventure

When I ordered my new Mini last September, I paid £300 extra for a DAB digital car radio. It was an extravagance, but after missing out on the Ashes cricket commentary last summer I decided it was worth the investment. It has proved a frustrating waste of money. 

On the way to work, the Mini's DAB receiver loses the digital signal most mornings at the M40/M25 junction. And it rarely picks it up again by the time I get to the office in Richmond 23 miles and 45 minutes later. 

I took the car to Sytner Mini in High Wycombe last week for them to solve the problem. I was very unimpressed to be told there's nothing wrong with the DAB set. Instead, they claimed, the problem was with the DAB signal. 

I said this was ridiculous. I was driving in the heart of south east England, not the Scottish highlands. It defied belief that day after day the BBC was failing to broadcast Radio 4 and Radio 5 Live in DAB. As it to prove the point, the day I visited Sytner, I lost the signal at Brentford and never regained it during my journey home to Buckinghamshire. 

I suspect the Mini's DAB receiver simply isn't powerful enough to work properly. I can't see how this flawed receiver can possibly be regarded as fit for purpose under the Sale of Goods Act. 

It's hard to imagine how the Government can possibly switch off analogue radio in Britain while digital car radios are so unreliable. 

Why Apple's iPad won't save newspapers

Apple's announcement of its iPad tablet computer was the anti-climax of the decade. Weeks of hype drained the event of any sense of excitement. 

For me, the biggest mystery is how the iPad can live up to expectations that it will rescue the world's newspaper publishers from oblivion. The New York Times has created an app for the device, in the hope that the cavalry has arrived. But the problem facing traditional media groups is that circulation and advertising revenues are in sharp decline. At the same time, consumers are unwilling to pay for online content after growing used to getting it for free. It seems perverse logic to suggest that the answer to consumers' refusal to pay for content is to tell them to spend £500 on an extra computer plus a subscription for online material. 

The iPad looks gorgeous, but I'm far from convinced that there is a sizeable market for it. Apple fans point to the Cupertino company's success in seizing the MP3 and mobile phone sectors. But these were well established and popular markets. The tablet has existed for a decade or more without moving beyond a niche. There are good reasons for this. It's too big to become a constant companion, but not big or capable enough to become a workhorse, like a laptop. 

I can't help wondering also whether the brilliance of the iPhone might actually hinder rather than help the chances of the iPad. Apart from size, what extra does the iPad offer? Why should I pay an extra monthly bill from O2 or Vodafone for 3G data when I'm already paying them for the iPhone? And when I travel for work, I can't see myself packing an iPad as well as a laptop and the iPhone. 

What about e-books? Again, it seems unlikely that the iPad will persuade huge numbers of people to give up printed books for electronic versions. The printed book retains a huge advantage. It's portable, robust and attractive. I can read it in the bath or an a plane that's taking off. It's easy to flick to the photo section or index in seconds. And few things match the pleasure of picking up an old favourite on the bookshelf. Oh, and after a day staring at a computer screen, a book is a soothing companion at bedtime. 

No one should underestimate Apple's ability to create demand for its gorgeous products. But the iPad is its biggest challenge yet. It still strikes me as a solution in search of a problem. 

Why Waterstone's is struggling

Twenty years ago, Waterstone's was my dream bookstore. I loved browsing my (then) local stores in Richmond and Kingston. But in recent years the chain has lost its way. It was no surprise to read in The Guardian that it had a very poor Christmas.

The Guardian's report says people are browsing but not buying. And they're taking photos on their mobile phones of book covers in store to see if the titles are cheaper on Amazon.

I plead guilty to taking photos. But I'm more likely to be getting ideas for birthday or Christmas presents than bargain hunting. Waterstone's is struggling because it has been badly managed. I hate the practice - copied from rival Books etc - of having tables of books dominating the store, rather than decent displays of the latest titles. Those tables seem to carry a muddled selection of titles: fiction, non-fiction, new releases, 3 for 1 offers. I usually lose interest and walk out.

But more serious is the limited selection. I'm a regular visitor to the Richmond Waterstone's again after a gap of 15 years now I work just round the corner. But I'm invariably disappointed to discover the store doesn't stock the business, tech or current affairs title I'm after. By contrast, a quick search on Amazon or eBay comes up trumps, which means I'm more likely to buy online rather than order the title in Waterstone's. And even that option is flawed: I recently tried to order a BBC audio book in Waterstone's, only to be told they couldn't find it. Two days later, it arrived at my door ... from Amazon.

I wish Waterstone's well. It's still one of my favourite stores. But the fact I've still not spent a birthday gift token from the chain after almost three months is not a good sign. Once upon a time, to use a traditional storytelling opening, I'd have spent it in minutes not months.

Boiler packed up? Don't worry, says British Gas, your baby will generate his own heat

My heart sank when our boiler packed up tonight. The coldest winter for years, with no end in sight to the big freeze. Not the time to test our expensive Homecare policy with British Gas. 

So it proved. The soonest British Gas could offer an engineer visit was next Wednesday - five days' time. The only advice the guy on the phone offered was pouring water over an outlet pipe. Needless to say, that made no difference apart from making my feet wet. When I said we had an 18 month old baby, the British Gas man came up with the priceless advice that an 18 month old baby would generate his own body heat. In other words, go away and shiver for five days.

I then asked if British Gas would refund my premiums if I could find someone locally who could get the boiler going again. Oh no. 

Now I appreciate these are busy times for central heating engineers - I'm sure we're not the only household whose heating has packed up. And it's only right that priority should be given to the elderly. But this experience has confirmed my suspicion that we were conned into taking out a British Gas Homecare policy. There's no point in having this cover unless it actually rides to the rescue when you need help. We won't be renewing. Instead, we'll save the £338 for a local supplier who actually provides a service.

UPDATE: British Gas customer service called earlier to apologise for its agent's 'unacceptable' comments, and promise to pay us £30 - but not an earlier appointment. We're running a collection of ancient electric fires, moving them around the house with us. It reminds me of a very cold night at university, in January 1985, when four of us huddled in our living room and watched the Italian Job and Gregory's Girl on television in front of a two bar electric fire...