Skinflint's City Diary
I am appalled by the Chancellor of the Exchequer's truly scandalous decision about sweets, chocolates, ice-creams, lollipops and so on. These pernicious confections, which do nobody any good and which decay the teeth of all our children, should receive heavy duty. Sweets are as damaging as cigarettes. Instead, Mr Barber has actually exempted sweets, chocolates and so on from VAT. It is an outrageous decision. God knows what it will cost the National Health Service.
It is also odd that the Chancellor decided against increasing the top prize for Premium Bonds and instead to increase the number of smaller prizes chattered out by Ernie. His psychology is wrong. People like the big prize: witness the pools. The bigger the win, the more publicity the pools firms, arrange; and more cash comes flowing in the following week.
Removing suspicion
I hear that not much more juicy tittle-tattle is to be expected from the Poulson case. The hearings have been adjourned until June, when the last one should be held. Mr Muir Hunter, the indefatigable QC for the trustees, seems to have been extraordinarily successful -in recovering cash: over £200,000 in the kitty. I can think of one or two well-known politicians who will be profoundly relieved when the hearings are finally concluded.
But will that be the end of the tawdry matter? I suppose not. What the hearings have shown is the extent of one man's dealings with local and national politicians and officials. They have not shown whether those dealings were corrupt and, if so, how corrupt — for the very simple reason that bankruptcy hearings are not designed to discover whether or not there has been corruption.
Talking to people in the business and political world, I discover a unanimity of view on one matter. They all agree that there is a great deal of corruption in the world of property deals and planning permissions, and that the corruption is chiefly where you would expect it: in local government. There is only one way to remove suspicion on this score, and that is to remove planning from town and county halls altogether. Will any government take such action? Of course not. It would be far too unpopular with all those fat local politicians and their fat local wives.
Ronald Burgess
Mr Antony Fisher, well known for his support of the IEA and its sturdy common-sense views on freedom from excessive State interference, writes to me: "Ronald Burgess of the Economic Study Association has produced an excellent paper which seems to indicate very clearly that inflation is caused by excessive government activity. It may well be that once government involvement in the economy exceeds 15 per cent of the GNP, or what Burgess prefers to call ' Gross National Claims' there is likely to be inflation. Professor Colin Clark suggested that there were indications that there would certainly be inflation over 25 per cent and we are up around 60 per cent. Therefore to blame the unions or anybody else for rising prices or even to try and prevent the consequences of inflation by trying to hold prices and wages down can only be a more rapid road to disaster. It has been proved that nations can live and function in a state of inflation, that is with an increase in the money supply, provided markets are left free. This is a lesser evil than price and wage controls."
City reform
Another correspondent, Mr Walton, following up my article saying that Peter Walker was shadow boxing on the subject of City reform, tells me of his experience with one heavily advertised City firm, Antony Gibbs and Co. He tells me that last May he wrote to them asking for their advice on an investment of £10,000 to produce certain requirements. They sent him a proposed portfolio, made up of £3,500 in Tyndall 6 per cent Bonds, £3,000 in Hambro Property Bonds and £3,500 in Hill Samuel Property Bonds. I have this proposed portfolio in front of me as I write. It came from Antony Gibbs (PFLAP) Limited, Bristol Office. Mr Walton accepted the scheme proposed and sent off a cheque for £10,000. "It was not until some time later that I found that in fact only £9,500 had been invested on my behalf, the balance of £500 having been used to pay commissions and other charges. I have had a long correspondence with them, all to no avail. I am assured — and this is the point in which you may be interested — that this is normal practice, and apparently there is nothing whatsoever I can do about it."
The proposed portfolio prepared for Mr Walton should have stated clearly that £9,500 was to be invested, and not £10,000, I would have thought.
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