Bernard Ginns: Businesses paralysed by fear of the zombie debt crisis

Then came the zombie company, the technically insolvent business that feeds off taxpayers and investors to stay alive.

Now, most shocking of all, is the zombie country, the sovereign state that is bust in all but name, that threatens to infect all those who come into contact with it.

It is this nightmare scenario that is playing out across Europe and keeping many Yorkshire business leaders awake at night.

David Buckley, of accountancy firm Ernst & Young, confirms that the relentless coverage of turmoil in Europe is scaring a lot of people.

But he calmly assures me that the situation is “eminently fixable”.

“A big part of the fix is a political one,” Mr Buckley said when we caught up at an event in Leeds.

“A solution will be found and the odds are on that, not least because the alternative is a major secondary financial crisis.

“It’s unfashionable to be positive at the moment yet a lot of businesses in Yorkshire have refinanced and are quietly doing very well.

“I have a fear that the continued stream of uncertainty driven by the European crisis will actually inhibit Yorkshire businesses doing what is best for their business.”

I hope you registered that. A lot of businesses in Yorkshire are doing very well.

However irrational, the fear of what might be continues to stalk businesses.

A report out yesterday from KPMG found that nearly half of the region’s business leaders are concerned about the economic instability in Europe and the impact it might prove to have on their company.

The only issue topping Europe is the lack of economic growth in this country, cited as a top concern by 51 per cent of executives, with public sector cuts concerning four in ten.

Mark Firmin, of KPMG, said: “It’s no surprise that there are a host of issues furrowing the brows of those influencing Yorkshire’s prosperity.

“The market is rightly concerned by the continuing Euro crisis given the degree of global financial interconnectivity which risks an economic domino effect if not stabilised.

“Though this saga may not be taking place on our region’s doorstep, it has the potential to hugely influence the ability of local businesses to at least stabilise and at best return to growth. Teamed with the fact our national and global economies are still in the doldrums and public sector cuts will continue to bite next year, I am concerned that, after cutting their cloth absolutely appropriately, the holding pattern some businesses are in, while awaiting recovery, is not sustainable for the long term.”

Doing nothing, then, is not sustainable.

With that in mind, here is my New Year’s message to all you business leaders who are sitting on cash in the bank: stop hoarding, start spending and slay those zombie fears.

Next month, we can look forward to more details from Nick Clegg’s promised clampdown on “abhorrent”, “irresponsible and unjustifiable” executive pay. The Deputy Prime Minister wants to tackle the culture of reward for failure as he tries to make sure that the public sector doesn’t do “all the heavy lifting” in these austere times.

I will await his report with an open mind, I promise you.

In the meantime, the Rev Rob Hinton, the Church of England Minister to Business in Leeds has a view worth sharing.

He told me: “Nick Clegg’s philosophy doesn’t allow for those business leaders and employees who are, in my experience, working harder than ever just to stay afloat or stop the decay – working under massive pressure to keep their workforce in a job.

“Mr Clegg says nothing of how the reduction of mega salaries would result in a redistribution of wealth across the workforce.

“I honestly believe that the Government would do better tightening the rules on tax avoidance, both corporate and personal, and ensure that we all stick to a system already designed to share the burden.”

The priest has got a point. He is not the only person I’ve heard talking about tax lately.

John Swarbrick, senior director at LDC, the private equity arm of Lloyds Banking Group, told me: “Tax should not be seen as a bad thing and something to be avoided.

“There is a balance. There’s a huge amount of time and effort spent on avoiding taxes, which is not creating wealth for society.”

The consequence of tax avoidance, he claims, is a busted society.

Ponder that.