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Review of the 15th Annual Conference

The 15th GBF annual conference, in the Reform Club and the Ironmongers Hall, focused on improving skills and training in Britain and Germany as a way of raising growth and prosperity.

Prof. William Paterson (right), GBF chairman, said the UK and Germany have a clear advantage from exchanging best practice. “The German-British Forum is all about business and public policy issues from a broader perspective: skills and training form part of this.”

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News Views

Scottish independence and UK leaving the EU – Both a mistake

This article by GBF chairman Bob Bischof was published in the Daily Mail, June 29 2014

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In less than three months the Scots will be voting whether to leave the Union.

They may decide to head out on their own, or they may choose to stay within the United Kingdom and be given as yet unspecified further powers to determine their own affairs.

Although the difference between those two choices might not be that great in the end, a separation following a majority Yes vote would be a significant set-back for the Union, Europe and the Scots themselves.

However, the debate could bring about some good.

As the nation states of the European Union head towards closer economic and political integration, its citizens are feeling that they are losing too much of their national identity and are therefore rebelling.

In some cases this manifests itself in protests against immigration, in others through the resurgence of regional and tribal issues, and in others again, in anger against Brussels ‘red-tape’ and the desire to win back powers for national governments.

The recent European elections gave an increasing share of the vote to the parties on the right arguing against immigration, citing the threat to jobs and criticising EU meddling in home affairs – as UKIP did in the UK.

In my view the real underlying fear is what in Germany we call Ueberfremdung, which translates as ‘foreignisation’.

That is linked not only to immigration, but also to overseas ownership of huge chunks of British industry, including ports, airports and utilities.

This is of course not just a British phenomenon. The same feelings are at the heart of the rise of populist right-wing parties in France, Austria, Greece and Spain.

The only countries that have reacted differently so far are Germany – my native country – and Italy.

Perhaps citizens in these two nations are not as easily reeled in by demagogues with simple messages because they have been there before.

Although the EU has talked much about the rule of subsidiarity – the principle by which decisions must be taken at the appropriate local level – Brussels has failed its member states by not delivering on it and by not making it clear enough.

The rising support for the ‘Yes’ campaign and ‘Scotland for the Scots’ is, I believe, an expression of similar concerns and must be taken seriously.

It is not good policy to try to scare the Scots about losing the pound and being economically worse off, or even by raising doubts about whether an independent Scotland could secure membership of the European Union, as Alex Salmond wishes.

This is much more an emotional issue and should be treated as such by the ‘No’ campaigners.

Far better, then, to concentrate of the positive aspects of the Union. There are not only economies of scale in business but also in politics. Size matters, as every business knows, when it tries to sell in global markets.

Paddling your own canoe economically and politically in a more and more globalised world is difficult, to say the least. The threat of Britain leaving the European Union is similarly counterproductive in my opinion.

Most importantly, the men in Brussels and Angela Merkel in Berlin must have a close look at the results of their actions so far. In the long run they can’t ignore the deep seated fears and mistrust of the peoples of Europe.

Britain may appear isolated following the row over the appointment of Jean-Claude Juncker, but should continue to lead a push for change.

As for Scotland and the UK, the West Lothian Question – whether Scottish, Welsh and Northern Irish MPs should be able to vote on matters involving only England – is unresolved, and the relationship between Scotland and the other countries that make up the Union is not very efficiently structured.

It might be an idea to take a look at the constitution that the Allies gave Germany after the last World War, which has a clear separation of national, state and local powers. It could serve as a model for the men in Brussels.

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You can read more articles by Bob Bischof on his website.

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Videos

European trade protectionism: Inward investment at any cost?

GBF chairman Bob Bischof and Lord Powell debate the pros and cons of foreign investment in Britain, occasionally at the expense of company ownership.

The interview appeared on Bloomberg TV in October 2013.

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News Views

What Paul the Octopus could never predict

The German British Forum would find it hard to be neutral about the outcome of the World Cup quarter final this afternoon.

One of us has already predicted Germany for the final on the basis of trade patterns (www.deltaeconomics.com/own-goal/).  For a Brit, it’s a bit like supporting a League 2 team to demonstrate that you are a “real” football supporter but supporting Chelsea or Manchester City in the Premier League to make sure that you get some of the upside of liking football…. After England’s parlous performance, what Brit wouldn’t secretly be hoping that Germany will win tonight?

And who needs an octopus when trade data will do to predict scores?

Delta Economics Q2 forecast is that the UK’s trade will decline by 1.3% in 2014 so why are we surprised that the English teams in cricket and football have under performed and Andy Murray is out of Wimbledon?  By the same token, Brazil’s coffee exports are forecast to grow by 8% this year and Colombia’s by 4% so 2-1 is the obvious result for that quarter final.So what does this tell us about the game that kicks off in just one and a half hours from now.

Well, Germany’s export trade is forecast to grow by 1.2% while France’s will decline by 1.4%.  Germany’s car exports will grow by nearly 1% this year while French car exports are likely to contract this year by over 10%.  We’ve tried desperately to find an area where France might excel, but even here, German wine exports could grow by as much as 4% this year; we are forecasting that French wine exports will shrink by nearly 1%.Whichever way you look at it, things don’t look good for France this evening.

Score prediction – Germany to win 3-0 and France to have a player sent off in the first half.  This will ruin the game as a spectacle of course, but then so far this World Cup, although Germany have won, they have still not achieved Joachim Low’s goal of winning pretty as well as winning ugly.  But we are all used to that.

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News Views

Keeping up with the Schmidts – response to apprentice article in The Economist

Westminster is trying to replicate aspects of Germany’s apprentice system but it is not working. Should it even try? Will Stirling looks at the recent evidence.

This article in The Economist published April 26 illustrates the difficulties with copying systems that work in other countries.

Before the 2008 financial crisis, apprenticeships, while popular with large companies, were not championed. Culturally, society tended to see an apprenticeship as ‘what you do if you can’t get the grades’ at GCSE. Many still think like this.

While the number of apprenticeships in Britain has climbed from 280,000, when the coalition government came into office in 2010, to over 500,000 today, the article criticises David Cameron and Co for two main shortcomings.

Firstly, most of these apprenticeships are Level 2, broadly equivalent to GCSEs. This is not equitable to an apprenticeship in Germany, where there is one standard across the country and all sectors, with a minimum duration of three years. Some, but not many, UK apprenticeships are Level 3 (on par with A Levels) and very few are Level 4 plus (degree level).

Secondly, too many companies and organisations have taken advantage of a system that was flawed. The government has doubled funding provision for apprenticeships = good. Training providers take the money and offer training to employers as prescribed courses and subjects. But quite often the training course is too narrow and not employer-focused enough. Organisations have been accused of becoming training providers just to qualify for the funding, and industry claims the money has been wasted. This explains the why the Employer Ownership of Skills pilot was launched – now in Round 4 – that gives employers funding to tailor-make their own training.

Morrisons, one company, is responsible for one in 10 apprentice starts in the whole UK, and these people are not being trained in hard, ‘value adding’ skills.

Partly due to the disillusionment of industry in this training funding, between 2011 and 2013 investment in training by employers fell by £2.4 billion, and the number of job vacancies without qualified applicants rose from 91,000 to 146,000.

The author rightly highlights the strengths of Germany’s vocational training. A simpler hierarchy of stages to reach the top grade, be it “Ingenieur” or the equivalent in banking or insurance, the pathways and stages are clear. The mighty Handelskammer – an organisation with a budget that dwarfs that of the British business support organs – has a specific mandate to deliver and monitor vocational training. Through compulsory membership of the DIHK – unpalatable to some, but effective – German companies find it difficult to fail to maintain standards – the Handelskammer will find them out. Britain does not have such a robust policing authority.

It is a shame the author did not acknowledge the excellent University Technical Colleges, established by the Baker Dearing Education Trust several years ago.

There are 16 UTCs now, and 47 will have launched by 2016. These engineering schools cover the secondary school map of ages 13 to 18 and follow the national curriculum for GCSEs, but with a strong bent for STEM, engineering-based and IT courses. Each has a speciality: the Silverstone UTC for example, specialises in high performance engineering and business and technical events management – no rpizes for guessing in which industry these youngsters may end up working.

Languages and the main swathe of subjects are covered, not there is less art, more science.

The first one, actually initiated by Lord Anthony Bamford, the JCB Academy in Rocester, posted extraordinary GCSE results in its first academic year – 99% of students achieved grades A* to C in maths and English.

This is the British answer to the successful German Berufsschule, one of the mainstays of Germany’s five school education system, that directs children with practical engineering aptitude into a route to industry and manufacturing.

In Germany it seems – although I may be wrong – parents and kids do not place the Berufsschule on a lower rung than a conventional secondary school education (the Gymnasium). People understand its role and its parity.

With UTCS, far from being perceived as playing second fiddle to the normal secondaries, colleges like the JCB Academy and Black Country UTC are heavily oversubscribed. Indeed, the JCB Academy was criticised by several schools in its catchment area for poaching the brightest 13-year old pupils when it launched. Students come from up to 50-miles away to study here, leaving home at 0700 in some cases. It proves a vocational path to industry not only exists but is proving really popular.

The Economist article says that Britain should play to her strengths.

“Its strong services sector tends to reward people with general skills, lowering the perceived value of specific, technical ones. And its flexible labour market enables employees to move around more freely, making it harder to pin them down for extended periods of training. The Germany-fanciers of Whitehall—perhaps without noticing it—are running up against their country’s own strengths.”

You can have labour market flexibility and a strong services sector and an engineering- or vocational-led education. They are not mutually exclusive.

Will Stirling

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A conference planned by the German British Forum in autumn 2014 on the power of mid-sized companies in Britain and Germany, as a force for jobs and growth in the European Union, will examine the differences of the German-British education systems, and what each can learn from the other.