The Common Touch
- Hanson: A Biography by Alex Brummer and Roger Cowe
Fourth Estate, 336 pp, £20.00, September 1994, ISBN 1 85702 189 4
This is a story of a hero. The Times described him as the ‘first and the finest’ of all the heroes of the Golden Age of Thatcherism. Margaret Thatcher had a penchant for ‘swashbuckling’ entrepreneurs, especially ones with Northern accents. When she first met James Hanson, his gentle Yorkshire lilt fascinated her almost as much as his millions. She assumed, as Harold Wilson had several years previously, that Hanson was typical of the self-made man, the hard-working puritan who started at the bottom and worked twenty hours a day until he achieved fame and fortune. Like Wilson, Hanson came from Milnsbridge, Huddersfield, but his origins were not quite as humble as his accent might suggest. ‘The same entrepreneurial spirit that led Mary Hanson to expand her transport business in 1846 – when she began to haul wool and other goods across the Pennines to Manchester on packhorses – pulsed through the veins of her great-grandsons,’ Alex Brummer and Roger Cowe write without a trace of irony.
One of these was Robert Hanson, the great James’s father, through whose veins the entrepreneurial spirit pulsed so fiercely that he stored other people’s furniture in a warehouse next to a garage packed with petrol. One day, the whole thing went up in smoke, which was fearfully embarrassing for the ‘resilient and pugnacious’ Robert Hanson. He was sued for negligence by one of the furniture owners, who won her case after some damning evidence from the police and outraged comments from the judge. Robert Hanson could not meet all the claims from the other people whose furniture he had destroyed, so he reached for the safely button available to all entrepreneurs – limited liability. He sold his assets and declared himself bankrupt. The Official Receiver noted in a series of angry reports that the Hanson assets had been bought by a consortium of friends, business associates and family, including Robert’s younger brother Donald, who was lent £1700 by his bankrupt elder brother to join in the deal. One limited company had gone bust but, as so often, another with a similar name sprung up in its place, and employed the ‘indefatigable’ (but bankrupt) entrepreneur at £7 a week.
Hanson Senior remained a bankrupt for seven years. His attempt to be discharged before that was thwarted by a county court judge who told the ‘business buccaneer’ he had discriminated between creditors, traded while insolvent and broken most of the rules. This was the ‘rugged stock’ from which the Great Entrepreneur James Hanson was hewn. He was born three years after the Milnsbridge fire, but never experienced any discomfort or stringency. His father recovered from bankruptcy, quickly became rich again and (according to these not easily embarrassed authors) ‘retained the common touch, riding in a Rolls to buy his fish and chips’.
By the outbreak of the Second World War, when James Hanson was 17, the old firm was making lots of money selling horses to the Army. At the end of the war, the Hansons, still staunch standard-bearers for free enterprise, enriched themselves hugely from nationalisation. The Ministry of Transport in the postwar Labour Government bought 18 trucking firms in the Hanson group, in a deal which landed old Bob Hanson and his partner a cool £3 million (worth about £48 million today) of the taxpayers’ money they were constantly urging governments to cut. The Hansons’ fortune was made, and the old crook who had diddled his creditors had become thoroughly respectable. In 1945 he ‘received the social recognition he craved when he took on the Mastership of the Rockwood Harriers Hunt’.
In 1947, the rugged but privately-educated James Hanson took off for Canada to found another road transport firm and make some more money. His chief interest appeared to be female film stars, notably Jean Simmons and Audrey Hepburn. (On these matters his new partner, who has stayed with him for the whole of his business life, Gordon White, boasted to a Sunday Mirror gossip columnist: ‘Why should I marry? I don’t need anyone to look after me. I’ve got a good housekeeper to darn my socks, sew on my buttons and cook my meals.’ White managed to dispense even with his housekeeper when, in the early Seventies, after linking up with Hanson, he went to America and launched his new business there from New York’s exceedingly expensive Pierre Hotel.)
What was the nature of the ‘buccaneering’ genius which built the Hanson empire from a small transport undertaking into one of the biggest industrial conglomerates in the Western world? Hanson himself supplied the best reply: ‘I’m not interested in making things and I’m not interested in building companies up from scratch.’ What he and White were interested in was buying companies which others had built up, selling off bits to meet some – if not all – of the purchase price, ‘slimming down’ what was left, usually by sacking people, and then going on to the next deal. As Brummer and Cowe shrewdly observe, Hanson is not ‘an industrialist’, as he is usually described. His operation is that of an investment bank which buys and sells companies as items in the balance sheet.
Hanson’s hero in the early years of his and White’s journey to fortune was Jim Slater, described here as ‘the Master’, whose speciality was asset-stripping – buying up companies and selling off the assets. Slater’s career in the early Seventies, cheered on by almost all the financial correspondents and get-rich-quick brigands in the City of that era, careered on and on and on to its inevitable collapse. By a series of strokes of good luck, and by keeping clear of the property market, Hanson and White avoided their ‘Master’s’ fate, survived the collapse of the stock-market in the mid-Seventies and staggered into the clear blue water of the Thatcher decade.
Until the Iron Lady appeared on the scene. Hanson and White had been equivocal about politics. Tories they both were of course, but pragmatic Tories, careful not to offend the Labour Governments of the Sixties and Seventies. Hanson nurtured his relationship with his fellow Huddersfield alumnus Harold Wilson. Like Thatcher, Wilson, too, had a special feeling for those whom he called ‘merchant venturers’ – besides, Hanson and Wilson were both very fond of Gilbert and Sullivan. Hanson was an obvious candidate for Wilson’s ‘lavender’ Honours List in 1976, when Wilson suddenly and mysteriously resigned as Premier. The list, written down by Wilson’s éminence grise, Marcia Williams, on her lavender-coloured writing paper, consisted almost entirely of rich right-wing businessmen who supported the Tory Party. It included the Lord High Buccaneer from Milnsbridge, James Hanson.
When Thatcher was returned as Prime Minister in 1979, Hanson rediscovered his enthusiasm for right-wing politics. He revelled in the new atmosphere of free enterprise, in which trade unions were shackled, taxes (except those which hit poor people most) cut, and tax avoidance schemes with the emphasis on registration offshore (in Hanson’s case in Panama) encouraged. All these new ground rules of free enterprise helped Hanson and White on their golden trail. Any industry was good enough for them, provided the assets could be sweated and a decent ‘return’ rendered. The group snapped up Ever Ready batteries in 1982 and the London Brick Company in 1984. In 1986, Hanson’s hit the really big time with the takeover of Imperial Group, in recognition of which triumph Hanson was named Capitalist of the Year by the Times.
The mutual admiration between Thatcher and Hanson was sealed in hard money. As Hanson and his board helped themselves to the most grotesque riches (the directors paid themselves a cool six million pounds in 1987 – Hanson himself gobbling up 1.3 million), so Hanson’s became the most generous contributors to the Tory Party. During the Eighties, in corporate donations alone, they gave the Tories a million pounds. Alan Rosling, son of Hanson’s vice-chairman Derek Rosling, went to work in Mrs Thatcher’s private office in Downing Street. Lord Parkinson, one of Thatcher’s favourite ministers, became a favourite of Hanson’s, and was guest of honour at Claridge’s when Gordon White finally followed Hanson to the House of Lords in Thatcher’s farewell Honours List in 1991. In the same year, Kenneth Baker got a job on Hanson’s board.
In the Thatcher years, Hanson felt he was part of the Government. He demanded and got an interview with Nigel Lawson in which he offered to buy the BP shares the Government were selling – for six billion pounds. Lawson showed him the door, believing at least a little in his own rhetoric about a shareholders’ democracy. A few years later, even that guard was dropped. The Minister of Energy, Lord Wakeham, a former accountant who was closer to Thatcher even than Lord Parkinson, actually proposed to Hanson that Powergen, the about-to-be-privatised power generation company, should be sold lock, stock and barrel to Hanson’s by private treaty. This seemed fine to Wakeham, Thatcher and Hanson, the Three Free Marketeers. To others, though, it looked like the flogging off of a publicly accountable monopoly to a private, unaccountable monopoly. The proposal was dropped.
Like Lord Sterling, who for most of the Eighties was an ‘adviser’ to the Department of Trade and Industry and at the same time chairman of P & O (he had to withdraw finally when his company was charged with corporate manslaughter over the ferry disaster at Zeebrugge), and like Lord King, whose advice Thatcher sought constantly without realising that British Airways was engaged in an entrepreneurial dirty tricks campaign against its main competitor, Lord Hanson became one of the Inner Circle which helped the Government to achieve what seemed during that absurd decade to be the economic miracle of all time. It wasn’t, of course. The recession which hit British industry in the summer of 1990 was entirely unexpected and therefore entirely unprovided for. It caused havoc in the industries gobbled up by Hanson and White, who encouraged their local managers to sack and sack again. This ‘realistic’ approach was seen at its most brutal in the long and ugly miners’ strike in the United States in 1993, where Peabody, Hanson’s coal company, sought to smash the union. The Hanson employers’ tactics in that dispute were as shocking as any of those resorted to in the early part of the century. At Peabody union-busting required a struggle: this sort of thing was rather more easily achieved in some of Hanson’s British undertakings.
I doubt the Great Entrepreneur will be happy with Brummer and Cowe’s book. Great men don’t like to be criticised and he’s unlikely to be pleased by the comprehensive evidence of his tax avoidance schemes, for instance, or of the group’s dreadful investment record, or by the account of his domineering personality:
He cares passionately about his employees’ personal appearance, demanding the same high standards of them as he does of himself. Hanson employs a leading trichologist, Philip Kingsley, at the company’s Knightsbridge premises, on the look-out for tell-tale signs of dandruff on the collar or a thinning crown among Hanson executives.
Underlings must be seen to be well turned out but never heard. Like so many tycoons of his ilk, Hanson regards criticism from his employees as treachery.
He would be quite wrong, however, to be angry with this unauthorised biography. For the book is far more hagiography than exposé. In seven long years working for Robert Maxwell, I never ceased to be amazed by the obsequiousness which he induced. What was it, I wondered, which caused constant grovelling from otherwise lively and independent minds? The answer, I concluded, was the fascination of power, which seemed to become more fascinating as it became more brutal. The more Maxwell swore and bellowed, the more eagerly his brilliant and engaging serfs fawned on him.
Alex Brummer is a financial journalist of great prestige. How can he bring himself to talk about ‘the immense allure’ of James Hanson? How can he bear to go on about the swashbuckling, buccaneering entrepreneur, especially when the stereotype is undermined by his own facts? Was he influenced by the coffee and sweets he and Roger Cowe were served in Hanson’s Knightsbridge headquarters? Or by that lunch the two journalists enjoyed with Hanson in the Brompton Road? Was he impressed with the interview in 1991 which ‘left this author feeling he had become a friend’? None of this seems very likely. So here, too, the only explanation must be the fascination with wealth and power. The thrill of the mega-deal so excited the authors that they left out of their account all those thousands of people who were crushed, humiliated or sacked in Hanson’s relentless progress. What do the eighty thousand workers think of their glorious boss? What about their unions, their pensions, their wages, their job security? Who are they? They emerge only fleetingly in the authors’ hurried account of the Peabody strike. Most of the time they are for Brummer and Cowe just as they are for Hanson, mere pawns to be shifted around the capitalist board in the interests of the men at the top.
This biography of Hanson could have been a searing account of the Thatcher economic disaster so often chronicled in Brummer’s Guardian column. It could have taken its place in the tradition of challenging financial journalism which keeps the moguls in perspective and calls them to account: Charles Raw on Jim Slater, Michael Gillard on Rossminter, Tom Bower on Tiny Rowland, Christopher Hird on Rupert Murdoch. But the long shadow of Thatcher and her mandarins still shuts out the light.