CITY AND SUBURBAN
From the Savoy to the Kennedy Primer here come the gender rhymes
CHRISTOPHER FILDES
There seems to have been some mis- take. I took leave from City and Suburban last week, having been invited to spend a few days in the Savoy. I thought I might try out the room service. In the event, though, I found myself whisked to the other Savoy, on France's snowy border with Switzerland, where my hosts slid down the ski-slopes while I passed myself off as a couch potato (pomme de terre de pouffe) and put in some economic research. The Savoy, I decided, had not taken care of its manufacturing base. Nothing seemed to be made there except cheese. Its economy should there- fore, so we are now told, be in terrible trou- ble, with the men from the International Monetary Fund arriving any minute. It is, on the contrary, full of new investment and crammed with customers from all over Europe who come to buy its services. The Prime Minister might check into this other Savoy. Over the hills and far away, he could be heard leading the chorus in praise of manufacture, without which there could be no salvation. He had, so he said, kept a lonely faith in it through the Thatcher years, and now it must come into its own. For a moment he sounded like Harold Wil- son, who taxed what he called the 'can- dyfloss' service industries and gave rebates to manufacturers, including the makers of candyfloss. These are the economics of Kennedy's Latin Primer, with its grammati- cally correct gender rhymes:
Abstract nouns in -io call
Feminina one and all:
Masculine will only be Things that you can touch and see...
For example, papilio, a butterfly, and ves- pertilio, a bat, neither notably productive.
Frailty, thy name
KENNEDY theory is at work on the bal- ance of payments. We are in the red, so the theory runs, because we put our faith in services — abstract and invisible, feminine, fickle and frail. Instead we must have stur- dy, masculine exports of things that you can touch and see. It was certainly a consider- able feat of mismanagement to run up a ten-figure deficit at a time of deep reces- sion, but it is a bit hard to blame this on feminine frailty. Our invisible exports, as this week's figures will confirm, exceed our exports of goods. The other difference is that our trade in goods is, as usual, in deficit, and our trade in services is, as always, in surplus. On those figures there would be more to be said for turning the Kennedy theory around, and reinforcing success by backing the service industries. The distinction that matters, though, is not between goods and services, but between those economic activities that can help pay our way in the world and those that cannot. The Savoy (London's) is on the right side, most of the public sector on the other side. In the Major years, the public sector expanded and the producers of tradeable goods and services were squeezed.
Fudget Day
I SUPPOSE that I had to come back for the Budget. Perhaps the Chancellor will, after all, enthuse me. It would be fun to hear him argue that his present difficulties bear out his bold decision to move Budget day from the spring to the autumn. As things are or were, the decisions on public spending come six months before the deci- sions on paying for it — so that when spending is out of control, as it was in the autumn, the Chancellor's only choice in the spring is to take the consequences or to try to get around them. This time the odds must be on a Fudget. With another Budget Day only seven or eight months distant, and another Chancellor possibly closer than that, Norman Lamont's temptation must be to pay the bills with post-dated cheques. Have not his Seven Dwarves (six of them, anyway) advised him to raise taxes, but not yet? I am sure that, taking his cue from the Prime Minister, he will find something to throw to manufacturers. I am equally sure that he will have splendid schemes to encourage us to lend him more money, thus sucking up savings which might have financed manufacture. The big question mark hangs over mortgage relief. I have long wanted to see our savings shifted out of housing and into productive investment — from the place where we sleep to the place where we work. I fear, though, that the Exchequer's suction-pump will get those, too. I am always for making taxes simpler and lower and compulsory — chop- ping tax breaks and cutting tax rates — but this is not my year, and the crucial mistakes that matter were made last year, in the spending half of the Budget. Go on, Nor- man, say so.
Economical with.. .
HIGH TAXES make for happy havens, and Caroline Doggart's good haven guide is the tax avoider's vade mecum. Tax Havens And Their Uses is published with perfect timing by the Economist Intelligence Unit at £75 (but never mind, I expect you can charge it against tax) and is the ideal pre- sent for someone who has everything, such as the Queen. She can leaf through it and select, from among her wide choice of realms and territories, the most attractive domicile. (Residence is, fortunately, some- thing else.) Mrs Doggart writes warmly of the Turks and Caicos Islands, a colony sponsored as a tax haven by Her Majesty's Government, and free of direct taxes. Clos- er to home Mrs Doggart has discovered Campione, which straddles the Swiss-Ital- ian border and is ignored for tax purposes by both sides. Minerva, the world's only underwater tax haven, was established on a reef in the Pacific by an American syndi- cate calling itself the Ocean Life Research Foundation — annoying the King of Tonga, who sent a gunboat. The world's taxmasters use more sophisticated weapons, but in vain — they would do better with fiscal dis- armarment, but, luckily for the havens, there is no danger of that.
. . .the actuante
THE EIU'S parent magazine has got itself a replacement for the editor who has been snatched away to the Bank of England. It is a job that Geoffrey Crowther offered to Roy Jenkins, who chose to stay in politics and four years later was Chancellor. His fruity memoirs exhibit no regret: 'I am not a dedicated reader of the Economist, despite the narrow margin by which I missed becoming its editor, regarding it as esssentially a journal for foreigners.'
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