13 DECEMBER 1986, Page 31

CITY AND SUBURBAN

Yomping to market from New Court to a cosy Rookery Nook

CHRISTOPHER FILDES

The wail of pipes through the ancestral courts of the Rothschilds signalled the departure of their grumpiest client, Sir Denis ('nothing to do with me, I'm just being sold') Rooke. The pipe band mar- ched out from New Court, leading Sir Denis, Peter Walker, assorted Rothschild types, and an actor of restricted growth dressed as a gas flame. All then yomped down St Swithin's Lane and headed for the Stock Exchange, where central casting was desperately at work — ringing round for a stage army, however small, which could rush on to the deserted floor of the Stock Exchange and pretend to be dealers. So the world's largest share issue came to market. The first credit on its balance sheet is that it could be done at all. It says something for London hopes of estab- lishing itself, with New York and Tokyo, as one of the world's three capitals of share trading. It is an answer of a sort to the perennial question: is the City starving industry of investment? It is much the same answer as Lord (Harold) Wilson gave, to What he called the central question of his Inquiry into the financial institutions. The development of North Sea oil was his instance for concluding that if the rate of return was right — however big the ven ture, or novel, or risky — the money would be there. British Gas is a test case, too, for the fixed-price offer for sale, still the City's preference, though elsewhere reckoned as obsolete as the Stock Exchange's floor. Those who fix the price have only a small target area between the gratuitously cheap and the total flop. By recent standards Rothschild's marksmanship was good. Not good enough to bag the stags (who applied for the issue in the hope of taking an immediate profit) — but in City eyes they are not so much fair game as a necessary Part of the balance of nature, and all the More so since their most favoured habitat is London EC. The Chancellor got his revenue (I beg his pardon, we are not supposed to call it revenue, but 'negative public expenditure'). The Government got its millions of shareholders, who will be no keener than house-owners to vote for compulsory expropriation. Now the debit side piles up. Nothing has been done for competition, nothing has been done for local ownership or accountability. Sir De- nis preferred British Gas as it was, only without those tiresome ministers — Mr Walker always excepted, because Mr Wal- ker agreed. Mr Walker's predecessor, Nigel Lawson, did not agree, but Sir Denis has his way. British Gas PLC is a formid- able monolith built in the image of the formidable monolith at its head. We already have an example of the risk of building a huge company in the image of one supposedly indispensable man, but don't let me Harp on it. Lastly, debit a great missed opportunity, to create a national retail market in shares. Without it, the extravagant and condescending promotional campaign could only make a sale, not a habit. If the man in the lane (other than St Swithin's) likes his first share, where does he buy his second? From his local branch of N. M. Rothschild? There is something loopily perverse about trying to develop a mass market through the retail skills of a merchant bank sup- ported by those of the Post Office.