By Mark Hillary. The opinions expressed are his own.

In addition to the economic meltdown, there is another political story in Europe at present – Belgium.

I’m not referring to the recent release of Steven Spielberg’s ‘Adventures of Tintin’ movie – though it might be argued that Captain Haddock bears a passing resemblance to several much-missed British political figures, thanks to the trademark slur.

I mean the government. Or lack of one. As I write, it is now 530 days since Belgium actually had a functioning Cabinet making decisions and showing political leadership – or actually doing anything.

They didn’t need an Occupy movement to destroy the government in Belgium. They just needed a general election where the votes were spread so thinly across so many political parties that it became impossible to form a coalition that could then appoint Cabinet representatives.

At the election in June last year, 11 parties won a place in the Chamber of Representatives, and since then the horse-trading over who will take seats in Cabinet has continued. It was June this year when Belgium passed the previous holder of the dubious honour of being the slowest country to ever form a government – Cambodia.

Without digging too deep into the background of the Belgian problem – and speculation over partition – I am surprised that failure to form a government in a western European nation has sailed under the radar of most people commenting on the European economic and political maelstrom.

By Mark Kobayashi-Hillary. The author is the chief executive of technology research group, IT Decisions, based in São Paulo, Brazil. The opinions expressed are his own.

Labour leader Ed Miliband used a column in last weekend’s Observer newspaper to suggest that it is time for politicians to listen to the protestors at the Occupy London protest camp next to St Paul’s Cathedral.

In a clunking attempt to align the Labour party with the views of the protestors, Miliband seems to have lost the plot. He might want to cast aside any party allegiance, just for a moment, as he reads the home page of the protesters in London.

In stark contrast to the glossy flyers and gushing prose handed out to Labour party campaigners in the run-up to an election, the manifesto of the protestors runs to just 52 words:

“Occupy London stands together with occupations all over the world; we are the 99 percent. We are a peaceful, non-hierarchical forum. We’re in agreement that the current system is undemocratic and unjust. We need alternatives; you are invited to join us in debate and developing them; to create a better future for everyone.”

Two important statements leap out from this text: the system is undemocratic and unjust and you are invited to join us in debate.

The protestors don’t believe that the present system of parliamentary democracy, stuffed with lawyers and Bullingdon Club alumni arguing the toss in Westminster, really represents the country anymore. And they freely admit to not having all the answers.

By Mark Hillary. The opinions expressed are his own.

In 1998, the Japanese government was ridiculed for giving away almost $6bn (at 1998 value) of shopping vouchers. The plan was that consumers would spend more of this ‘free money’ and help lift Japan out of the seemingly endless malaise it suffered in the nineties – as many other developed economies were enjoying a roaring decade.

One of the major faults in the Japanese plan was that the vouchers could easily replace the need to spend actual money. If my groceries cost me $100 then why would I still spend $100 of cash on groceries and buy a nice meal in a restaurant with my voucher, when I could just use the voucher for those groceries?

But the Japanese may have been onto something by focusing on demand rather than monetary supply, contrary to most received wisdom at present.

The Bank of England’s Monetary Policy Committee has restarted quantitative easing (QE) in the past week, much to the surprise of the markets and leading some commentators to ask what they might know that the media and financial analysts don’t.

Former MPC member David Blanchflower even used his column in the Guardian to say: “The MPC argued that tensions in the world economy ‘threaten’ the UK recovery. I am unaware of the MPC ever using this word before. Given that a lot of care goes into the exact wording of such a statement all nine members would have had to sign off on this, then things must be pretty bad.”

Perhaps I am over-simplifying the complexity of the British economy, but if the man on the street senses that the economy is not improving then he will reduce spending, luxuries are forsaken, and unsecured credit is paid down.

By Mark Hillary. The opinions expressed are his own.

Once again German Chancellor Angela Merkel has had to dig deep to ensure that the euro zone can limp along for a little longer without any single nation defaulting.

And this story changes day by day. No sooner has Germany rescued the euro, Greece apologises and says they can’t meet the deficit targets – no more savings can possibly be achieved through austerity.

But as economists chart the course of this rollercoaster ride of expected default and the potential catastrophe of the entire European single currency project unwinding, is anyone paying attention to the social effect of all this uncertainty?

I don’t mean the pain of the middle classes ruing the days their house would increase in value week by week, I mean the potential for a completely different system of politics.

The political answer to the crisis in Europe is austerity. Public sector jobs are being slashed, taxes are being increased and more widely enforced, and state services normalised over decades are suddenly being cut.

Yet faith in centre-ground politicians is possibly at its lowest ebb since the end of the First World War. The general public has a very low tolerance for their elected leaders at present and non-economists generally view austerity packages as the wrong approach for repairing damaged economies.

By Mark Hillary. The opinions expressed are his own.

The Dale Farm barricades are being dismantled and all political eyes are now focused on the party conference season. Just yesterday, Nick Clegg managed to impress the Lib Dem faithful in Birmingham, though convincing the voters that all is well with the good ship Lib Dem might be a bigger challenge for the Deputy PM.

But as the dust settles on Dale Farm, have we learned anything from the fiasco where Basildon Council attempted to evict 52 families from their homes, with no option of staying in the area due to there being no other local authorised sites for travellers?

It would appear not. Some travellers are now dispersing to other illegal sites throughout the south of England and the council is fighting tooth and nail to get the injunction preventing eviction quashed – so they can carry on.

The issue for the council is simple. A group of travellers on an authorised site purchased some adjoining land and started expanding their site into the new area. They own the land, but had not been granted planning permission for the extended site.

It’s an open and shut case – no planning permission means no building and any buildings that have been erected without permission need to be destroyed.

The general public has a lot of sympathy with this no-nonsense approach. Travellers are generally seen as scroungers who want to avoid the normal structures of society – taxes and planning permission – yet they squeal about the Human Rights act when challenged. The man in the street could for forgiven for asking why there is one set of rules for travellers and another for the average law-abiding citizen.

Today we are all used to an international trade in services. When you call up the bank, a contact centre agent in India probably answers the call. When you crash your car and file a claim, the claim form you painstakingly complete is scanned and sent thousands of kilometres away for processing. When you call to find out the next train to Cardiff, it’s not someone in Wales giving you the information you need.

This change in how services are delivered has become a part of everyday life. For many companies – such as banks – it went too far in the past decade. Many banks found that their customers were uncomfortable dealing with an agent in a far-flung location and it soon became a source of competitive advantage to answer calls locally. But those same banks advertising that ‘we answer your calls in the UK’ are all sending their IT systems offshore. The ‘offshoring’ continues, it is just less visible.

The man on the street would say that by sending skilled service-sector jobs to lower-cost economies we are hollowing out our own skills. People don’t start their careers in skilled roles — they graduate up to those jobs through experience. If the lower level clerk roles have all been outsourced offshore then we are storing up big trouble for the future.

That’s the theory of the heart, and perhaps it is what most people would call common sense too. But economists argue the exact opposite; that a country can build wealth in many ways and a UK-based company that is successful because it manufactures products at a low cost in China and customer calls are answered in India, can bring wealth to the wider economy.

But what happens when the risk profile of the countries these major international companies have been working with suddenly changes?

Companies such as Vodafone, Hewlett-Packard, Oracle, and Microsoft all have major facilities in Egypt. When the government there recently pulled out the Internet plug where did all those British Vodafone customer service calls go? Or the Xbox gamers calling for help with their console? Where indeed…

All these major firms will have considered the need for some backup facilities, in case of a technical breakdown in their remote facility, but how many have considered the chances that a government would just turn off the Internet, and even the telephone system?

- Mark Kobayashi-Hillary is the author of several books, including ‘Who Moved my Job?’ and ‘Global Services: Moving to a Level Playing Field’. The opinions expressed are his own. –

Deputy Prime Minister Nick Clegg is on a mission to shore up support within his own party for the tripling of university tuition fees. The Liberal Democrats campaigned with a manifesto pledge claiming they would axe fees if they ever got into power. They got the power, but only via a coalition with the Conservative party, and though they claim that some Lib Dem pledges survived the coalition talks, the policy on tuition fees actually went the other way.

MPs will vote on the tuition fees policy tomorrow. Clegg has stated that all his ministers will support the government line, but though the ministers have been whipped into line, it looks like a large number of Lib Dem backbenchers are unhappy with their new reputation as the ‘Fib Dems’. Potentially a large number of them will vote against their own policy or abstain from voting altogether.

This rebellion over a key piece of legislation could be the beginning of the end for the coalition. A coalition government requires compromise, some favoured policies will be axed so that others survive and the result is a curious blend of the pledges made by two parties – often neither party will be entirely happy with their joint proposals.

But if the Lib Dems rebel on tuition fees now then one might expect the Conservatives to rebel over the tidbits thrown to their coalition partner, such as voting reform. If there is no agreement and the constituent parties rebel against the ideas their partner brought to the table then we don’t really have a coalition – just two warring parties. And if this forces an early election then Nick Clegg will see his party reduced to a tiny rump of MPs aimlessly wandering the backbenches, because even their own supporters have lost faith.

Clegg knows this, so he clings on to the lifeline of making the coalition work even though it positions him and his party as the opposite of what they campaigned for. Meanwhile he has to suffer the indignity of watching as the general population circulate YouTube videos of him promising to scrap tuition fees.

In the end, the ‘leaks’ worked. The various snatched photographs of briefing documents leaked in the past couple of days meant that the real story of the Spending Review was the absence of any shocks. The government managed our expectations, so political new junkies and the money markets were not really surprised as Chancellor George Osborne outlined the cuts today.

Some benefits, such as the winter fuel payment and free entry to galleries and museums, had been considered low hanging fruit, almost certain to go, but the Chancellor surprised the gallery by throwing out a few spending commitment trinkets as he wielded the axe elsewhere.

Based on these figures, it looks like 490,000 public sector jobs will have to go in the next four years. As I mentioned in my last blog post, that will have a knock-on effect to the private sector, so you can probably double this to a million jobs vanishing from the UK over the next few years. I’ve already seen some commentators suggesting that the private sector has the ability to mop up any public sector jobs losses, but these are often the comments of recruitment consultants trying to talk up their own market without foundation to get their talking head appearance on the TV news. The Sky news team, based in Merthyr Tydfil today, don’t seem to be interviewing many private sector firms creating jobs in South Wales – the jobs so desperately needed to replace the Newport passport office earmarked for closure.

The opposition says that the government is going too far, too quickly. It’s hard to call who is correct yet, but the department for Business, Innovation and Skills is finding their own budget cut by 28.5%. That’s not really sending out a strong message of private sector regeneration and I heard precious little today that would be helpful to entrepreneurs.

One of the main focus areas that the rolling TV news channels have picked up on is the 25.2% cut to the Home Office budget, which includes policing. The Home Office already said they are ‘hopeful’ that bureaucracy can be cut so frontline officers remain out on the street. I’m surprised to hear the Home Office sound so indecisive on this when they should be aware that just three months ago, Cleveland was the very first police service to entirely outsource their back office to the private sector. Cleveland contracted with Steria, and I met Sean Price, the Cleveland Chief Constable, at the time so you can hear what he said to me on their decision to privatise their administration by clicking here. [http://www.youtube.com/watch?v=a4crU9LWItM]

I’m not suggesting that Steria is the only company offering a back-office admin function, but Cleveland is certainly the first police service to enter into this kind of deal – perhaps the Home Office needs to get up to Middlesbrough to take a look at what is going on in their own backyard?

But it’s not all doom and gloom. In many places, the public sector is being revived and regenerated. Reducing administrative jobs does not necessarily lead to a decrease in service to the citizen. SOCITM is the main trade association representing technology professionals in the public sector. I just called their president Jos Creese and asked him if these budget changes can be interpreted in a more positive way. He said: “We are creating a strong willingness to change that will be, in many respects, good for public services, so it will force us to question what we should be doing and what we don’t need to do. It will force us to modernise and transform – particularly through technology. Enabling the public to do more for themselves is also a very positive move, not just for cost, but a lot of the public can – and want – to look after many government transactions themselves – like renewing a library book online rather than needing to go the library.”

Most of the media and commentator attention today will rightly be on the public sector. When the Chancellor announces the cuts we all expect, the axe is going to fall on public services and the only real question is where and how hard it falls.

But spare a thought for the private sector too. These cuts will have an enormous effect on private companies that work for the government, and those companies employ many thousands of people too.

Even the exciting high-tech sector is not immune. Last July the Cabinet Office called in the Chief Executives of the 19 leading hi-tech service companies to the government. They trooped up to Whitehall and were asked – in no uncertain terms – how they could help the government, given that times are hard.

The implication was that all suppliers to the government should cut their rates, and stop any non-essential work. The companies could have kicked up a fuss. They all have long-term contracts and agreed rates, but all of them could see that it was a good idea to do what the Cabinet Office wanted. To point to the contract and call in the lawyers might signal the last time they ever work for the British government.

Since then, another thirty or so smaller suppliers have been called in and asked to help the ‘national interest’.

This has created an interesting dynamic because the Cabinet Office, and Francis Maude in particular, are digging deep into the supplier relationships and leaving no stone unturned in a quest to save money. We can all remember old media stories of how much the government used to spend on management consultants and ‘advisors’ – with all the major suppliers being questioned and forced to reappraise their relationship with the government, there can be no doubt that those headlines are a thing of the past.

And yet, all this activity is masking the fact that maybe the issue is with the government as a disorganised procurer of services, not with shady suppliers charging outrageous fees. Regardless of the fact that Francis Maude is riding through the suppliers on a white charger with his trusty sidekick Sir Philip Green advocating a return to centralised procurement, most of the suppliers think that the Office of Government Commerce (OGC), bears much of the blame for government procurement becoming disorganised.

- Mark Kobayashi-Hillary is the author of several books, including ‘Who Moved my Job?’ and ‘Global Services: Moving to a Level Playing Field’.  The opinions expressed are his own. -

Prime Minister David Cameron has loaded a 747 full of British business leaders and government ministers, all on a charm offensive aimed at securing deeper trade ties between the two nations. But what is he offering the Indians?

The Prime Minister is appealing to the ‘special relationship’, the centuries-old tie of the British Empire and Commonwealth. It’s true that many links remain. The Indian accounting, legal, and parliamentary systems all maintain similarities to the British systems, because the British were instrumental in creating these institutions.

But for how long will the old ties bind us? When will the empire strike back?

Many supposedly British brands are actually owned by Indian firms. Jaguar Land Rover cars, the steel manufacturer Corus, the Tetley tea you may have enjoyed over breakfast this morning. India is already a pervasive part of British life, and not just in the form of chicken vindaloo on a Friday night.

India was relatively untroubled by the global economic slowdown. Instead of hyper-growth, the economy grew at a gentler rate, but there is the difference. Their economy is still growing, and now at an accelerating rate. India is one of the famed BRIC nations, the bloc of Brazil, Russia, India, and China lumped together because of their fast-growing economies and huge populations.

And size does matter. There are 1.1bn people in India, and the labour force is approaching half a billion. The potential for more Indian companies to work with the UK is enormous, as is the market opportunity for British firms that can find a way to take their goods and services to the Indian people.