Simon Walker takes up his post as the IoD's Director General on 3 October and will spend his first day in Manchester presenting the IoD's Growth Plan at the Conservative Party Conference. He talks to Director about policy, people and plans for Britain's economic recovery
We're in the beautiful, high-ceilinged, chandelier-lit Nash Room at the IoD's 116 Pall Mall headquarters. Simon Walker is in the UK for two days and has generously allocated two hours for our shoot and interview. He had flown in from Canada that morning, had back-to- back meetings with the IoD board and then was off to a dinner in the City before going back to France the next day where he has a house. I expect him to be stressed possibly, weary definitely. But when Walker walks into the room, dead on time, he's tanned, relaxed and smiles as he greets our crew.
"Right then, let's get to work," and he obediently stands where photographer Paul indicates, chatting happily to us all about the weather, history and his quietly incredible career. Walker was born in South Africa in 1953 and worked as a journalist for Television New Zealand before becoming director of communications for the New Zealand Labour Party, part of the team that swept it to power in 1984. "That was a very exciting time," he says. "That victory fundamentally changed New Zealand and put it on the path to growth."
As Paul shoots, we chat about his time as director of corporate affairs at British Airways. Walker was there throughout many major controversies including the Air France Concorde crash. "Yes, I was there the day Concorde crashed," he recalls. "I heard the news and remember going to the chief exec's office and signalling frantically for him to get off the phone. We had a BA Concorde flying that night at 7pm and we had to decide what to do. We grounded it and spent the night checking every single detail. It's sad that it's not still flying. It's strange that flying supersonic is one of the few things we will be able to tell our grandchildren that we could do that they won't be able to."
Walker then went on to work as special adviser to John Major in the PM's policy unit at 10 Downing Street, before "suddenly losing my job one day in May 1997".
Royal appointment
There followed a stint as communications secretary to the Queen at Buckingham Palace and Walker played a major role in her golden jubilee celebrations. "It was a fascinating period. I learnt a lot that was applicable to business – logistics, focusing on what
you could manage and balancing judgement, media, government and commercial. And if you have any sense, as I do, of history, then Buckingham Palace is a wonderful place to be based."
From the palace, Walker went to Reuters where he spent five years as director of corporate marketing and communications. "I still regard Reuters as an incredibly commendable organisation. It's precious to humanity and the principles that govern Reuters as a news operation are terribly fundamental – accuracy and impartiality."
Walker worked closely with chief executive Tom Glocer in developing the company's global brand positioning and in its major restructuring culminating in the merger with Thomson Corporation.
"I think what Tom did was radically simplify the product offering that Reuters had. Reuters had about 1,500 products which ended up being reduced to around 50. It's very easy for extremely clever people in a large business to develop products that have some appeal but aren't commercially scaleable. Sometimes you have to take a look at where you are and reel in the outlay which is destroying profitability – that's what we did at Reuters. There were tough business decisions to be made for a global company and when you have to invest in a global context you put it where workers are skilled, where the legal framework is stable, and where taxes are low and economic opportunities are good. Now the only one of those Britain has at the moment is stability and that's a real problem."
Walker's next role was as chief executive of the BVCA, where he introduced a new organisation and governance structure, achieving improved government and media relations at a time when the private equity sector's image had been tarnished by controversy.
"While I was at the BVCA, perceptions of the private equity and VC industries improved significantly and that was great. It wasn't just image, though, we genuinely introduced a much more transparent regime to the industry. Private equity had to clean up its act. It was OK to be entirely anonymous and keep yourself to yourself when no one had heard of you and you were buying companies that no one had heard of either, but when you bid for a big public company like Boots then you had to come out and explain. It's not just shareholders of Boots who have a stake in Boots, it's the customers and the workers and the neighbours and the community at large.
"Business can operate more easily in an environment where people aren't suspicious – where they see it as making a sound contribution to a community and for that reason transparency is good. I'm proud of
getting that message across."
There seems to be a theme of working in large institutions and gradually steering them onto a new path. "I think 'gradualism' is the important word here. We used to talk about that with the monarchy – people thought of it as terribly traditional and not changing but in fact it has changed, the old institutions do change. A good example is the Marmite jar. We all think it has always been the same but look at a Marmite jar from 50 years ago and you can see it's changed completely. It happens so gradually that customers don't notice. I think that's often the ideal way for institutions to evolve as the monarchy has and as Reuters did. Both are really in quite different places than where they were 40 years ago while remaining true to their core values."
Voice of business
Walker's next chapter is now as Director General at the IoD. It's a fascinating time to be taking the helm, I suggest, and I wonder how exactly he plans to rally the IoD and lobby on behalf of business.
"I believe passionately in business as a force for good. I do believe capitalism is a very positive influence overall. In many ways free-market competition has done more for humanity than anything else in history. That's not to say it doesn't have many flaws and we need to look the whole time at maintaining competition, to making sure that people don't act less than honestly, but the vast majority of businesspeople are decent, honourable, very hard-working people who contribute.
"At the moment British business is threatened by high tax, over-regulation and a stagnant economy. Growth is the only way to prosperity.
"The IoD can be and should be enormously important and influential. In a time of economic crisis, to establish the IoD as the voice of the business community at large is terribly important. Private sector business is what's going to drive the country out of its economic gloom.
"I am very keen to visit the regions and reflect in Whitehall business attitudes from across the whole country. One of the strengths of the IoD is the breadth of its membership and I want to emphasise and represent all aspects of that. I want to visit the regions and hear about the members' experiences. I'd like to know where they are facing roadblocks in policy terms, where things that the government is doing are interfering with their capacity to get on with work and day-to-day business.
"I have huge faith in the ability of businesspeople to grow, to be successful and to satisfy genuine customer demand if they're left alone to do it. What I have much less faith in is the ability of government to get it right when it tries to intervene. There should be no need for government intervention. We have constant calls to politicians saying 'something must be done' about the things that people, newspapers, pressure groups and political parties don't like, and my view is that governments need to resist that. The total intervention burden on business at the moment is damaging Britain's prospects."
His campaign for growth
The IoD's Growth Plan addresses Walker's concerns with what seems to me to be a fundamental change – from government interfering in business to providing the support structure to allow it to operate freely.
"Yes, I think that's right. The Growth Plan is enormously attractive and is designed to more than double the potential growth rate of the UK by 2020. That is the right strategy and defies the pessimism and gloom that seems to abound when people are talking about economic policy overall.
"One of the aspects that I like best is the idea that public spending should be a maximum of 35 per cent of Gross Domestic Product by 2020. It sounds like a sterile and dry statistic but it's not. It's a proportion of total wealth that the government is eating up, leaving that much less for actual production – for the private sector community – and to me that's a very important figure.
"Aspect two is that public spending should be moved from unproductive investment to productive investment. It should be moved away from welfare payments and subsidies and into spending on infrastructure, for example. Having spent the last six months in France, I see infrastructure that works. Much of British infrastructure just doesn't work because it has been neglected for decades. At a time when demand is flat, government spending should be committed to productive infrastructure investment." An element of the Growth Plan is to scrap the 50 per cent tax rate. I ask if he had seen Nick Clegg insisting on The Andrew Marr Show that the rate would stay.
"It's good politics to be bashing success but it's terribly bad economics and I suspect Nick Clegg knows that. Britain is now a very high-tax economy and that is disastrous because it's a disincentive to international investment and to hard work within our own economy. The top tax rate is actually 52 per cent (taking into account the national insurance contribution) and it can be well over 60 per cent for people earning £100k a year, so these disincentives seem to be deeply damaging.
"The 52 per cent tax rate is not actually bringing net revenue. My guess is that it reduces the total tax take. If you look at the big hedge funds that have decamped to Switzerland since the top rate went up, you can see that's clear. To be insisting on ideological grounds that the top tax rate is kept high, when you're diminishing the total revenue that the government has, is crazy.
"Ultimately, I will be campaigning for growth and the competitiveness of British business. We've taken our competitiveness for granted and now find ourselves with an excessively high tax burden, an over-regulated labour market and creaking transport and energy infrastructures. Britain has lost its competitive edge and radical reform is the only route to sustainable growth, stability and long-term job and wealth creation.
"I am looking forward to leading this distinguished organisation with its deep historic roots into this new era. The fact that it's going to be a turbulent era, an economically challenged era, make the appeal all the stronger because the arguments we make are really
going to matter now."
