13 NOVEMBER 1999, Page 28


We need a regime, an incentive, a hotline next, Gordon Brown's budget for sex


The best moment in the Green Budget came early. Below the Chancellor's televised picture there appeared a caption: 'Accused of sexual offences against under-age girl'. Alas, this was meant for dear old Gary Glit- ter, and Gordon Brown rattled on, unarrest- ed. Sex is, in fact, one of the few human interests for which he has yet to provide a regime, an incentive, a hotline, or a scanner designed to alert the Customs and Excise to what is going on. Next year, no doubt. When he first gave us a Green Budget, by way of a trailer for the full-length feature to follow, he had trouble in finding enough things to say, and went on about how important it was to keep warm in the winter. Nowadays he has plenty to say, and sounds like a cross between an Inland Revenue press notice and a speaking clock. Eighteen months ago he made capital gains tax more complicated, which took some doing. Could he now invent a new complication for it? Yes, he could. He must imagine himself sitting at some great economic control panel, pressing buttons and making bulbs light up as each finely judged electric charge pulsates through some hapless company or individual to make them more productive. The economy does not work like that, and companies and individu- als do not work like that, either. They may even make better choices than he does, or they would, if he gave them the chance.

Air Marshall

ANOTHER quarter, another set of ghastly figures from British Airways, another chirrup of defiance from Robert Ayling, the embattled chief executive. Not a chirrup from his chairman, Lord Marshall of Knightsbridge, nor a sighting, for that mat- ter, but he is a busy man. As well as his day job, which brings in £251,000 a year, he lists three other chairmanships, and deputises for the chairman of British Telecom and the president of the Confederation of British Industry. This time last year he was report- ing on the role of economic instruments and the business use of energy, and was effusive- ly thanked for inventing the climate-change levy. A year later, the Chancellor is awk- wardly backing away from it. Now Lord Marshall has become chairman of Britain in Europe, which after a number of delays and cancellations took off last month with the Prime Minister on board. It purports to be promoting debate about the European single currency, but this is the sort of debate that begins with the answer and works its way back to the question.

Value for money

LORD Marshall is an enthusiast for the euro and an enthusiast for Europe, but his airline still finds it hard to make money there. (Mr Ayling complains that BA is being frozen out of Frankfurt.) After the ill-judged experi- ment in rebranding itself as Air Zulu for Zoo Class, BA is scurrying back up-market and now pins its hopes on the long-haul routes and on premium fares. Making them stick will be harder. Respectable airlines now offer business-class travel across the Atlantic for one third of what BA charges. Even in BA's heyday, Lord King as its chairman thought that it required his full (and sometimes alarmingly detailed) attention. 'Every one of us,' says Mr Ayling , 'has got to prove them- selves, that they are adding value to the com- pany.' Quite so.

Nobody's puppet

IT IS easy for a Lord Mayor of London to lose himself in ceremonial, waving from his golden coach or receiving a pansy from the Worshipful Company of Gardeners. Peter Levene as Lord Mayor was never going to be like that. 'It's a good opportunity,' he said when he came in, `to get across the message that this is a serious post and that we in the City have a serious agenda.' This could not be done without treading on corns. He trod on some earlier this year, when he said that the view from the Continent was that if Britain stayed out of the euro, the City would lose. He trod on a matching set on Monday, when he said that the City was flourishing outside the euro, so far. He stands down as Lord Mayor this week, and anyone who would rather have a gilded pup- pet must now realise that the puppet-show would not last for long. At the other end of town, the search is on for a mayor of Lon- don, and if, as seems perfectly possible, all three favourites are nobbled or scratched, my money would be on Levene.

Money made plain

A NOTION prevails that the money market is something so impalpable that it can only be spoken of in very abstract words. But I maintain that the money market is as con- crete and real as everything else; that it can be described in plain words; that it is the writer's fault if what he says is not clear — I maintain that, too, but Walter Bagehot got there first. He staked his claim 126 years ago on the first page of his masterpiece, Lom- bard Street. Out of print for most of the cen- tury, it has now been republished by John Wiley (at £12.95) so that bankers can read it for profit and the rest of us for pleasure. Finance, as Bagehot understood, is a spe- cialised branch of human nature: 'At first, incipient panic amounts to a kind of vague conversation. Is A.B. as good as he used to be? Has not C.D. lost money? A hundred people are talked about, and a thousand think: am I talked about, or am I not?' A panic, he says, is a fever and must not be starved: if credit dries up, it must be replenished. This is now crisis-management doctrine for the Bank of England and the Federal Reserve, though Thomson Hankey, governor of the Bank in Bagehot's day, dis- sented. Saving banks from the consequences of their actions, Hankey said, would encour- age bad conduct and help to bring on the next crisis. The debate lives on and so does Lombard Street.

Blyth spirits

THE next man in at Diageo (pronounced Guinness) is Lord Blyth, who has had a lucky escape. In their absent-minded way, the directors of the National Westminster Bank had fancied him as their next chairman but when their sit. became vac., he was too busy minding the shop at Boots. So the job went to Sir David Rowland, who now finds himself firing his managers and fighting off all-corners, and Lord Blyth can devote him- self to keeping Diageo up to proof. No won- der his predecessor, Sir Anthony Greener, introduces him as Lord Houdini.