24 JULY 1971, Page 33

SKINFLINT'S CITY DIARY Jack Frye

Chairman of the Iron and Steel Users Association, and of B. Elliott and Company Limited "Our tails are down. Our stocks are high. We'll forge ahead and never say die."

Mr Barber's mini-budget has knocked £400 million off taxes as well as, at last, freeing us of hire-purchase controls. There is little left but to lower bank rate to 5 per cent or less if this doesn't improve investment. My pessimistic bellwether is the remorseless truth that when the balance of payments is strong, manufacturing investment is poor. During the last few days I have spoken to several makers of capital equipment and, surprisingly, they are ardent Europeans relying on entry into the Market to get their companies' volume and stocks moving. Since their equipment is not price-volatile and tariffs are low it is difficult to understand how they think they will benefit from entry and believe in the unverifiable doctrine of faith in the absolutes of Europe. It seems that they hope that the Market will diminish the prickly chauvinism of the French and Germans who will accept their English goods as at last being European after entry and thus acceptable. This argument is one for sociologists and is beyond the plain man's compreheqsion.

Rhine-hearted and swiss-headed

There are many in the CBI, and not only in the capital goods industries, who see joining the Common Market not as something that will ensure the success of a cherished project but as a means of avoiding the personal shouldering of blame in case of failure. It looks in the reverse of the words of Sir John Maynard, as if the foundation of the new movement is not to be on the necks of the people (who will be out of work) but rather in their hearts. Fine stuff, though I sense the heartbeat of Europe being on the Rhine and its head certainly not in London — probably outside the market and not far from the bank vaults of Switzerland.

Voluntary exile

I know a rich man, childless, who exiled himself so that his nephews might inherit. He went to live in the Channel Islands, and was very sad at leaving his home and friends in England. I thought him to be foolish, for his nephews were likely to be well-enough endowed anyway. The preservation of great family fortunes from erosion by way of death and estate duties does not strike me as a particularly worthy cause. When changes in our laws here made the American property-based family-trust fortune of Colonel John Jacob Astor, the former proprietor of the Times and the first Lord Astor of Hever, subject to British taxation, although Astor lived here and was an Englishman if not by birth then by every other qualification, he decided to exile himself to the south of France. The Times described his removal to the south of France, so as to preserve the family fortune for the benefit of his father's grandchildren, as "enforced exile." He was forced into exile by nothing more nor less than familial piety: an extraordinarily powerful motive among the very rich. He died, away from home, still in self-imposed exile.

Pergamon Press

John Pollock was one of the directors of ILSC who was called but not individually criticized in the inquiry into the relations of Pergamon Press and British Printing Corporation and their joint subsidiary International Learning Systems Corporation.

After the start of the troubles at Pergamon Sir Henry d'Avigdor-Goldsmid

Skinflint's City Gallery

assumed caretaker control and if Pergamon shares are some time to have value their owners have reason to be grateful to Sir Henry for the work he has done, without self-interest, on their behalf. His most notable achievement was prevailing on Sir Charles Hardie, Mr John Pollock and their assistants to pay £25,000 for Pergamon's half-share in ILSC. Since Pergamon had with BPC a joint and several guarantee for £8 million borrowed by ILSC this was no mean negotiation. BPC were presumably under the impression that Pergamon was bust and that they should soldier on without Robert Maxwell's help, to make ILSC profitable. They should have at least extracted a penalty from Pergamon, but instead handed over £25,000 for the privilege of being solely responsible for the £8 million owed.

Mr Pollock has now left BPC, receiving the largest payment of compensation for loss of office in the company's history. He's a lucky chap, away for a good rest abroad with his nice wife, Lady Zinnia.

A new P on the pint

The ostensibly self-denying ordinance under which the bosses of the Confederation of British Industry are seeking to cajole their members to put a ceiling on price increases of five per cent sounds fine enough; although should the manufacturer of something for which demand greatly exceeds supply at a given price create a black-market by refusing to set a fair market price? I only ask.

Brewers, who never miss an obvious trick like putting up their prices when they think the trade will stand it (but are not half so good when it comes to the difficult trick of making their pubs better and the licensing hours longer), say that a five per cent limit is difficult — as the smallest amount they could put on a pint of beer was lp, which is about eight per cent. This is further proof, if such be needed, of the grossly inflationary effect of the stupid way we decimalized. I could never understand the necessity for decimalization. But if we had to do it, we should of course have decimalized on the basis of a new pound, worth ten shillings, made up of a hundred new pence, instead of sticking to the old pound and having a new penny, worth, theoretically — but not for very long — 2.4 old pennies.

The decimalization racket

I now find that the present ip, which looks like an ancient farthing despite that it is notionally worth 1.2 old pence, is generally regarded as a useless coin which no one bothers about. It gets left behind, doubtless to the profit of those who halfheartedly tender it in change. The men of the City, who felt so strongly about the pound sterling that it had to be preserved at all costs, and who didn't and don't care an old tuppenny hoot about the widow's mite, should feel ashamed of themselves. But at least they were looking after their own interests. The Members of Parliament who agreed to the recommended system of decimalization, and who disregarded the interests of their constituents, do not even have the excuse that they were looking after the interests of anybody at all.