Skinflint's City Diary

Denis Healey, the Chancellor of the Exchequer, has shown the utter barrenness of socialist economic thought. fully comparable to that demonstrated in a different direction until recently by Mr Barber.

It might be argued that an increase in income tax is needed to curb inflation, but the additional, muddled mish-mash of taxes cooked up by Mr Healey can surely be no more than grossly damaging to export costs. Further, they cannot but convey to any outside, dispassionate observer — who might have harboured the hope that Britain was at last prepared to face up to the hard realities of her economic situation — that our politicians are still hooked on the heady superficialities of electoral advantage rather than the fundamentals of national survival.

This is a time, as I have said more than once in these notes, for a siege economy, grim and distasteful though such a prospect is. To delay our cure is not to make the medicine more palatable but to make the disease worse.

New life

It is said that good Americans go to Paris when they die. Communists, presumably, to Moscow. And it has been said rather ironically that faithful members of The Spectator's editorial team find final rest in Madrid. Right-wing Tories have a new home — that Shangri-la for the capitalist classes — Slater Walker. Jonathan Aitken, the MP, is — or, at least, was, until the general election, an assistant to Jim Slater. Now Greville Howard, personal attach6 to Enoch Powell, has found a new life with this successful moneytrap.

Nationalised ,paternalism

The deification of Lord Melchett goes on with the British Steel Corporation setting up the Julian Melchett Trust which, "will support a multitude of deserving causes, like boys' clubs, blind institutions, etc., in steelworks areas."

You might think that this memorial to a salaried chairman of a nationalised industry was going to be paid for by the Mond family or perhaps by way of a collection from the public. You would be quite wrong. The idea is for a charitable trust to be set up and the plan is for a large proportion of the BSC's present charitable donations paid for by the British taxpayer and at present running at around £125,000 a year to be fun

nelled into the Julian Melchett Trust just as if it had been left as a bequest from the late chairman.

Is this to be the forerunner of a new nationalised paternalism? The great founders of industry like Lord Melchett's own grandfather, whose fortune unfortunately was largely whittled away before his grandson was around, would turn in his grave at the thought of a charitable foundation being set up in his name and financed by money ultimately from the taxpayer.

Concorde

Whatever worm-like view we have been forced to take about Mr Anthony Wedgwood Benn must be reconsidered on hearing of his manly visit to Bristol facing the British Aircraft Corporation workers with a series of frank speeches. His initiative has been so different from the muddled and humourless approach to similar situations by some of Mr Heath's junior ministers — notably Mr Michael Heseltine and Mr Chataway._ Mr Benn is proposing to publish new figures on the social implications of scrapping Concorde and he has also said that he proposes to query the suggestion of British Airways that they will lose £26 million a year operating five Concordes.

Wisely he is proposing to connect the costs of ending the contract with continuing with the project in a limited way and thus discovering the true cost to the state. No snap decision is expected though plainly he proposes to press to get one or two planes into commercial service earlier than anticipated, as has been suggested in The Spectator, as the surest means of shaking out orders from overseas airlines who have been sitting on options. It is a bad omen for those of us working towards the return of a Conservative administration when the Labour Government stimulates ministers like Mr Benn with new zest and produces, out of the hat, men of the calibre of Mr Eric Varley at Energy (obviously being groomed for the very highest position). So much better than their predecessors.

Withdrawn bids

Much fuss is not unnaturally being made by companies who received a takeover bid before the catastrophic stock market collapse and who now see the bids being withdrawn. Institutional shareholders in St Martins Property are said to be going against the swell by agreeing to the increase in capital to permit the bid for Hays Wharf. Combined English Stores are being wise in fighting for their shareholders' interests in drawing back from their bid for David Greig which has recently produced late and thoroughly bad results that were not envisaged at the time of the original bid. GKN may have failed with their bid for Miles Druce but only due to the stifling bureaucratic intervention of Brussels (how this is justified is unfathomable but yet another example of the insanity of the European rulebook).

An offer for a company, like any other deal, is a two-way street, and should be capable of withdrawal or renegotiation by a bidder who has not yet received acceptances as it is by the shareholder who does not like the price he is offered. Until the shares are transferred and paid for the matter should, as for instance a house sale, be "subject to contract" with both sides able to change their minds until the deal is done.

The National Westminster Bank — the very best of banks — is a name that has been floated as a possible bidder for Slater Walker. Though I should imagine that Jim Slater is anxious to bring his forays in finance to a final conclusion turning everything into unarguable cash balances and then to have them taken over with the extinguishment of the name, it is almost unbelievable that a major bank would consider a bid. The banks are under threat of nationalisation and being criticised for their windfall profits from high interest rates. To bid now for the cash that has been generated from naked financial buccaneering will create an uproar not heard since the days of Jay Gould and Pierrepoint Morgan. SW need not worry there will be other ways of getting out.

Antony Fisher

Must History Repeat Itself by Antony Fisher, published by the Churchill Press and priced at £2.40, is the work of a self-made — though Old Etonian — millionaire and the founder of Buxted

Chickens, now part of the Eastwood enterprise. Mr Fisher went on from business to found the Institute of Economic Affairs, His book is a tightly-argued case, for the competitive methods el industrial organisation which 111 economic theory is called in; dividualism. It was founded ails taught in varying degrees by the classical economists on the theory that human institutions can develop without a deliberate design or directing mind. Its or posite is the dirigiste or collec' tivist theory that society is best organised by social engineering and central direction. Economists of Mr Fisher's school make the assumption that if power is con' centrated it will be abused and that the concentration must be prevented because it cannot be disciplined. Power is broken .tiln through competition by dispersing sources and services among 3' number of suppliers. Good In', dividualists envisage that 3' competitive system requires. a framework of law that leads dividual motivations to serve tbe common good. This means that attention has to be given te monopoly, equality before taX.a", tion (lamentably absent in the IV stance of charities and certain stitutions) and control of the, state's power to create moneY. which Antony Fisher suggest 5( very effectively as now being °' the highest order of priority. ib! case against the individualisol school is that markets are not al' ways competitive and tlit monopoly, duopoly and oligoPol,Y are likely to prevail which ls, countered by the proposition that the . state has connived 3t monopoly by passing laws such.as resale price maintenance (will the LEA helped repeal) or induce,, producers to collaborate throug'; such organisations as Marketing Boards (which ar" Fisher made a successful effort t° abolish) or has made a sta,te, monopoly of an industry or utilit, that might be competitive. It is 0.11 the legal administrative and P°1,1, tical possibility of making marke." competitive that the individualls" tic and socialist discussion turns Mr Fisher has made a potent cas' for individualism.