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Energy chief wants to press "reset"

We must “reset” the purpose of finance to serve the economy, the CEO of EDF Energy Vincent de Rivaz told businesspeople and politicians this week.

The Frenchman was speaking at the Franco-British Council reception at The Sage Gateshead where Business Secretary Vince Cable also talked about the state-of-play following the financial crisis.

Mr de Rivaz suggested that financial risks had become too remote for the real economy, and this was the major cause of the crisis we now face.

He said: “Having to live within our means is a lesson we’re having to learn the hard way. It is made all the more challenging because of the current economic conditions.

“We still need to tackle long-term problems, and Britain must find billions of investment in low carbon infrastructure in the next 15 years. How do we take these decisions when the economy is so tough?”

The energy chief said Britain needed to make a decision on nuclear as the country needs a renewal of assets now, and stressed that a “pragmatic” energy market was necessary.

He also said the long-term consistency was required to tackle the economic issues arising from the crisis, and suggested a “hire and fire” culture was not conducive to productivity.

Instead, Mr de Rivaz said there should be focus on one goal, with one team and “valued” line management.

Vince Cable talked more broadly about the UK’s current position in Europe, and the synergies and antagony between France and Britain.

He said: “I’ve just come from France where I was trying to establish a dialogue with the socialist government there, and French business. It struck me how important French business is in the UK; within a few hours I’d met EDF, Total, BNP Paribas, Arriva, and many others that we take for granted here.”

Dr Cable catalogued some of the similarities between Britain and France, pointing to large budget deficits and unemployment problems.

“If you look at the pattern of growth in both countries has been identical, we’re both completely zero; France I think is fractionally growing and we’re fractionally declining. The prospect for next year is virtually the same; bumping along the bottom we call it in Britain.

“If I was to characterise the contrast, I would probably say that France has a smaller crisis than the UK; the shock less severe and the budget deficit is less serious, but it has less flexibility. The UK has a much bigger problem, but has more flexibility in economic policy, and British labour markets, for good or bad reasons, tend to be more flexible.”

On the question as to whether the UK should remain in the European Union, the Business Secretary said a vote on the matter was necessary, and realistic alternatives would need to be outlined.

To suggestions that the UK should be “more like Norway”, or “more like Switzerland”, he pointed out that Norway was still a member of the European Economic Area and makes payments into the European pot, while Switzerland’s rules are still dictated to a certain degree by the Union.

He touched upon other “less glamorous” options such as Turkey, Ukraine and Russia, but said their would be strong performing arguments on both sides, incorporating components such as fiscal saving, cheaper food and less red tape.

Dr Cable said an exit would bring uncertainty and the strategies of many companies were wholly dependent on membership of the single market.

He added: “There is now a realisation that there would be enormous costs from not being part of the single financial market.”

Trade liberalisation with countries outside of Europe, particularly the US and Japan, was on the agenda and Mr Cable said he thought there was common understanding that both countries would benefit from open trade exchanges.

This was posted in Bdaily's Members' News section by Tom Keighley .