In the City
More lame ducks
Tony Rudd
'What if all your ducks are lame'?' was a question put to me the other day by a Swiss banker. Clearly from his expression of mild disdain he had long thought that they were, and the only surprising thing was that we British had taken so long to recognise the fact. This of course is an exaggeration; some of our ducks can fly. On the other hand it is true that a good many more of these precious birds of ours are lame than had ever been suspected, certainly by selfconfident Conservative back-benchers a couple of years ago, who used to assert that on no account would they go along with Labour's policy of bailing out the weak.
The latest duck (a better word would be albatross) to be state-assisted is the 'ailing computer giant' (as the jargon has it), namely ICL. This case is particularly galling because it was only a few years ago when ICL was riding high; it was one of the showcase examples of what could be done with a problem British company by an enterprising management imported from America. For it certainly had been a problem for almost decades. But it did seem to have overcome its difficulties, with both profits and turnover at record levels. Now the recession has brought it to its knees again. A massive bank guarantee is apparently necessary to stop it disappearing down the plug altogether.
As in other similar cases we arenowled to understand that the management have been making mistakes; everybody knows, suddenly, that the name of the game is no longer main frame computers but termin als, preferably intelligent terminals. And beyond these there is the growing army of new mini-computers with astonishing calculating power considering both their price and their size. The great success in America is not IBM but Apple, producer of exactly such a mini-computer.
All this is in a sense nonsense. Big main frame computer manufacturers are still part of the scene and will be for years yet. Along with the machines goes a continuing requirement for sophisticated software and a whole range of what might be called fixtures and fittings. There is a long-term business in the field.
What has brought ICL to its knees is quite simply the combination of an appallingly severe recession and a continued lack of any serious industrial policy in the field. If a country the size of the UK, with its relatively modest industrial base, is to boast an independent computer industry at all it can only pay for such a luxury by supporting the company in question at all levels. This means that the City must provide the basic capital, the banks the working capital, and the government much of the customer base. The latter is particularly important; procurement policy must be ruthlessly nationalistic if there is to be a national computer capacity. Otherwise the overseas competitors, usually supported to the hilt by their governments (either directly by subsidy or indirectly by huge defenceorientated orders), will rapidly invade the market, clothe themselves with the pretence of the domestic producer and win large slices of public sector business. The UK market is particularly susceptible to this approach because so much of it is dominated by the public sector. The British have tried to have the best of all worlds and have become unstuck. Governments have wanted to support ICL and from time to time have given it aid in one form or another. The City has wanted to support ICL but, when it has come t° ordering, that wonderful capacity for fait play has interfered with self-interest with the result that substantial orders have gone to overseas competitors. Now comes the crunch. The ICL story is typical of the whole industrial picture. The present government has an economic strategy; it knows what it wants in terms of the management of the monetary aggregates, of the rate of interest and of the exchange value of the pound. It may not get what it wants but it is to the achievement of targets in these areas that most of its efforts are directed. One cannot help feeling that it would be so much better if the equivalent in energy and nervous tension were directed at achieving specific industrial targets. Thus the medium-term strategy should be denomillated in targets for industrial performance. As a country we should know where we want to go in computers and how much effort the Government is willing to put into helping industry and the City get the, industry to the top of the international league table. It's the same with steel, heavy engineer' ing, machine tools, aero engines, steel itself, not to speak of the major public, utilities like telecommunications, transPor` and the like. The Government is inevitablY caught up with all these areas. It has to be if only because of its defence commitments, let alone its control of that half of the economy which has slipped into the public sector already. Yet because it has a political and psychological 'hang-up' about 'goy' ernmental interference' it behaves as though full-blooded participation was clistasteful. It hides behind slogans about letting industry get on with it when it, the Government, is by far the largest of industry's customers. In fact, whether the Government likes it or not, this is a corporate state. The Government is just as much into industry as, Mussolini was or Mr Brezhnev is. thought perhaps, but better to admit it and' get on with the job than go around with tiny little crutches for binding up the legs of lam! ducks. An overall economic strategy whicu seems to have as a by-product the trans formation of healthy into lame ducks saYS something about Whitehall's involvement in the whole economic process. Rather than go blundering around in a kind of free for all, knocking the bric-a-brac from tb.e shelves and the china dogs from the mantel piece, it really would be better if on! tic tic masters overcame their psychoseman:: blockage about the word `planning and et down to doing some, in consultation vatn the CBI and the TUC and the City.
Previous page
