Howard Shore: An entrepreneur who wants to give the EU the elbowComments Off on Howard Shore: An entrepreneur who wants to give the EU the elbow
Big business has lined up four-square behind the staying in campaign. There is no shortage of corporate heavyweights prepared to voice their concerns about what they perceive to be the certain economic disaster should we leave.
Finding the equivalent in the anti-EU ranks is much more difficult. One, though, who is prepared to speak out is Howard Shore of Shore Capital.
It’s true Shore Capital is not exactly Goldman Sachs or Deutsche Bank, but it’s a smart, successful business all the same.
Due to celebrate its 30-year anniversary shortly, it is able to give the giant guns a run for their money in the areas where it does concentrate.
In the past 18 months, says Shore, his firm has helped clients raise £3.2 billion. Headline deals have included a fundraising for Market Tech, and the Premier Foods restructuring and refinancing.
It has managed the IPOs of Poundland, Applegreen, Market Tech, Crossrider, RedX and NextEnergy, among others.
Recent new corporate clients include its first FTSE 100 member, Morrisons, and Poundland, N Brown and Menzies.
Extel ranked Shore Capital in the top five for seven of the sectors it covers: insurance (first); retail (first), consumer goods (third); leisure and gaming (fourth); UK strategy (third); financials (fifth); and healthcare (fifth).
Poundland listed on the London Stock Exchange in March 2014
That’s in capital markets. In asset management, Shore Capital is growing apace, with major investments in German property and telecoms.
Shore, who is married and lives in central London, has earned himself a fortune (he still owns a substantial stake in Shore Capital). He’s a flamboyant character, with hair that is slightly too long for a typical banker.
He’s someone who likes to do his own thing and, if needs be, defy convention, so that the company’s offices have always been in Mayfair, “a nicer place to work”, and not in the Square Mile.
Compared with the major players, Shore Capital is a minnow — it employs 140 people. But big respect to Shore, he did what none of the Goldman or Deutsche high-flyers did and formed his own company pretty much straight after reading economics at Cambridge.
Rather than join a stockbroking firm on a graduate trainee scheme, when they were paying £6000 a year, he raised £10,000 to go it alone. He was 24, and it was 1985, when the Thatcher revolution was in full swing. Within two years, his company was making £300,000 a year in profits.
Ever since Mrs Thatcher, he’s been a devotee of the Conservatives, hosting dinners and fundraisers for them, and Shore Capital has made large donations. Today, EU differences apart, Shore is a keen supporter of David Cameron.
The entrepreneurial spirit that saw him start his firm at such a young age has stayed with him and the company. As he says, they’ve weathered market storms and know as well as anyone, how to manage risk and stick at something for the medium to long term.
While no boss likes red tape, Shore actively loathes it, and is prepared to say so. He sees much of his mission as giving small businesses the same chances he received when Thatcher swept away many of the obstacles to building a successful business.
He told a Carlton Club dinner that he chaired: “You should liberalise employment legislation and deregulate as much as possible for the very small businesses to make it simple for them to operate.
“I would say that anyone employing fewer than 10-20 people should be free from employment legislation, save for discrimination.
“They ought to be able to hire somebody and get rid of them three years later if they find they can’t afford them because then you create more jobs.
“The only way we’re going to resolve this debt problem is taking people off benefit and onto the workforce. I know from when I started how hard it was.”
That’s also where he is at on Europe, batting for the smaller and medium-sized enterprises he’s so familiar with at Shore Capital. He knows all too well how they must deal daily with the smothering hand of Brussels.
“I created a business from scratch in the mid-Eighties. There were just two of us, and a secretary. How you survive as an SME today, with all the stuff they have to put up with, I just don’t know. Whenever the government is challenged on this, they say, ‘it’s not us, it’s Brussels.’”
There is a definite split among UK PLC on Europe, with large corporations backing membership and smaller firms less keen. That’s part of the reason why there have been so few high-profile sceptics from the business community; the well-known names tend to be with the larger organisations.
“We should differentiate between the interests of big business and the British national interest,” says Shore of those from big business. “People often talk about political issues, and it turns out they have a significant personal interest.”
SMEs struggle with the weight of regulation from the EU. They do not have compliance departments, and staff dedicated to form filling and box ticking. And their manager-owners simply do not have the time to do it themselves.
We ignore their views at our peril, says Shore.
“SMEs are the best way for this country to create employment and provide prosperity. The biggest success the Tories have had in the last five years is in terms of the number of jobs they’ve created.
“I’d be surprised, however, if any of that growth in employment has come from large businesses.”
They’ve created some jobs, but they’ve also made people redundant. Net, they will be down or the same. The growth, he maintains, has come from the smaller end.
What the UK needs to do, “is to create an environment where people can employ more workers and not be hamstrung”. If the business should then take a turn for the worse, they need to be able to cut jobs.
The EU says differently, that employees have cast-iron rights, and cannot be dislodged. Says Shore: “Fundamentally, the EU is not helpful to people starting out and looking to grow their businesses.”
Right now he’s in no doubt: “The British public will vote to stay.” But he says, “it would be interesting to see what they would say if they were more informed”.
In business, where they have to deal with EU edicts and do know what membership entails, “if there was a straw poll of the top 1000 entrepreneurs in the UK, not the self-starters, not the people running big businesses, but those in mid-caps, they would vote to go. Most entrepreneurs I know are deeply sceptical.”
But we’re unlikely to leave? He nods his head. “I know. It’s more about the terms on which we stay.”
He would have little problem with the EU, and “I would not think twice about staying,” if there were “a reduction in the amount of regulation and intrusion from Brussels in the way we employ people, and how small to medium-sized businesses are allowed to operate”.
That’s the first reform he’d look for if he were Cameron. Second is, “if there is a reduction in the size of the bureaucracy and overhead at Brussels”.
Third is, “that the creation of free movement of labour needs to be examined. It’s hard to see how it can achieved when there are such major differences in the employment markets of the member countries”.
The EU, he says, needs to recognise that globalisation means that businesses within its borders, “need to be compete with companies from countries outside the EU that don’t have the same constraints”.
Is he disappointed in the PM? “No, he’s got his views. He doesn’t have to share mine. His is to renegotiate and stay. What I think he should renegotiate, and the risk he’s prepared to take, are probably very different from mine.
“I would adopt a very tough approach, because the Germans can’t afford in any circumstances for us to leave, so we would start from a very strong position.”
That, Shore says, would be his starting point. Doubtless, the bosses of SMEs and would-be Shores, and there must be plenty of those, will hope the Prime Minister takes the same view.