10 FEBRUARY 1996, Page 19

CITY AND SUBURBAN

Rolling back the frontiers of the public sector I'd make a start with ostriches

CHRISTOPHER FILDES

Ministries need ways of justifying their existence, so you will be pleased to learn that the Ministry of Agriculture, Fisheries and Food has an expert on ostriches. He is Nigel Church of ADAS, the Ministry's advi- sory service and, by his own account, what he does not know about ostriches would hardly fill an eggcup. He has (he says) advised on ostrich projects everywhere from North America to the Far East, he has developed ostrich farms and abattoirs across the world, he has exhaustively studied the market for ostrich products, and he acts as a consultant to Her Majesty's Government, the European Union and the Food and Agriculture Organisation of the United Nations. All these bureaucracies need ostrich policies, or think they might, one day. Under Mr Church's guidance, ADAS is selecting South African bloodstock for the ostrich farm it manages in Spain. I am not sure what an agency of MAFF is doing there, but it is true that there are now more ostriches than experts. They are the fad of the moment. Sure-fire schemes for investing in ostriches flock in to me by every post, promising that my money will multiply even faster than the ostriches. I would not bet on it. I seem to remember an angora goat scheme. (It moulted.) There was certainly a Pig scheme that trailed one weary pig around the country, to be shown to a series of investors, each of whom was led to believe that he owned it. There are some good ostrich schemes, Mr Church says, and some very bad ones. He must be right, but there is a moral in this for a Prime Minister now suddenly intent on rolling back the frontiers of the public sector. It can be done, he says. Jolly difficult, grumbles the Chan- cellor: people nowadays expect all sorts of services. I wonder. The two of them might start by cutting out or selling off the advisory service on ostriches. My advice is free: if you are tempted to buy an ostrich, put your head in the sand until the feeling goes away.

Brown goes pop in . . .

POOR OLD. Sir Rocco (well, as I was say- ing, not exactly on the breadline) and poorer Mr Brown, who will never be Sir Cedric now. The most visible casualty of the British Gas explosion, he is to retire early, so his fel- low directors have put old Cedric right for pension. This is a boardroom game whose rules are well established. The first rule is that pensions are a function of final salary and length of service, unless the answer comes out too low, in which case it has to be bumped up. Simpler, though, is to bump up the salary, and this is where Mr Brown's cel- ebrated pay rise late in his career (up by 75 per cent to put him on the £500,000 mark) will come in handy. British Gas's last year's accounts show a provision of £550,000 towards the cost of Mr Brown's pension. Sir Richard Greenbury's committee said that company accounts should show what such benefits were worth to the directors who received them, and Bob Scott, of Lane Clark & Peacock, the actuaries, has worked out the benefit to Mr Brown at £1,100,000. Early retirement on full pension is a benefit worth having, too. Will all these benefits show up in British Gas's next accounts? I expect them to be buried under mountains of provisions for restructuring, after the explosion.

. . . the great gas explosion

IT HAS been a long time coming. British Gas in its monolithic form was a monument to Mr Brown's monolithic predecessor, the formidable Sir Denis Rooke. He had built up British Gas as a grand public corpora- tion, and would not willingly see it dimin- ished by a single gas-tap, or showroom, or oilfield. Still less did he want to see it priva- tised. He put up a tenacious defence against the blitzkrieg of Nigel Lawson, then his minister, and kept the resistance going until a Cabinet reshuffle brought him Peter Walker. These two successive ministers dis- agreed about British Gas and about most things. To Lord Lawson competition was what mattered. He would have broken British Gas up. Lord Walker called this lunacy. He privatised British Gas in Sir Denis's image, and in time found his way to a seat on the board. In that image it was undeniably saleable. Monopolies are saleable, as Charles I found when Parlia- ment stopped voting money for him, but the point of sale is where the trouble starts. Then they are apt to be more rewarding for their owners (or their managers) than for their customers. British Gas is sole supplier to 19 million customers, and some of them let their resentment spill over on the injured Mr Brown. Now at last competition is making its way in, British Gas is being split up, and a new trading company will inherit all the contracts to buy unwanted gas at uncommercial prices, an embarrass- ment left over from the days of Sir Denis. He liked to think big.

Tickets, please

IT WAS a funny sort of fraud, if any sort at all, that marred the birthday party of the London Tilbury and Southend Railway. Tickets issued at Fenchurch Street station are said to have been sold at Upminster, so now the commercial director has gone and the handover to private ownership has been put off. No one suggests that the passengers have been defrauded. LTS, which divides its revenue with London Underground on arbitrary rules, discovered that by trans- porting the tickets down the line it could keep more money for itself. Not so much a fraud, more a bust-up in a cosy cartel. Bust- ups in cartels are good for customers. How the airlines hated it when their tickets began turning up in discount shops and undercutting their cartelised fares. Unethi- cal, they thought, and a danger to the pub- lic, which might find itself dealing with unscrupulous suppliers. Guess who sup- plied the tickets to the shops? That's right. Any travellers with any sense now shop around before they buy their air tickets. From Trailfinders, for instance, they can expect to buy British Airways tickets to New York for about half of BA's quoted price. I look forward to buying my ticket to Southend from Railfinders.

Deutschmark fiber alles

You can see why Helmut Kohl went to Bel- gium to offer Europe the choice between war and a single currency. Belgium's national debt is the biggest in Europe, and the idea is to hand it over to the Germans, along with the Belgian franc. If this fails, the Belgic hordes will lose patience and march into plucky little Germany.