CITY AND SUBURBAN
The constituents have seized power, so the Tories must search for an unknown prime minister
CHRISTOPHER FILDES
From the wreck of his party, a Conser- vative survivor stared across the House of Commons at the crowds on the govern- ment's benches. 'My God,' he said, 'they look like a lot of damned constituents.' Every half-century or so, these things hap- pen: that was 1945. Its previous disaster had found the party split on familiar lines, between those who believed in a self-suffi- cient single market based on a single cur- rency and those who wanted to trade freely with the world. Its leader hoped not to choose. He had other priorities. All that he wanted to do was to keep his show on the road. He would accept resignations, so long as they balanced. He had his own best-of- both-worlds policy or, more precisely, non- policy: insular free trade, he called it. The market was the Empire, the currency was sterling, the leader was Arthur Balfour, and in 1906 the show came right off the road and went over a cliff. The repeat perfor- mance could be seen coming two years ago, when the leader, pressed from both sides, tactically and temporarily accepted his own resignation. After that he stuck to Balfour's script and let the show play itself out. All that remains is the race for the succession. After Balfour, the two front runners cut each other's throats and the winner was a melancholy Scottish iron-founder who looked like a constituent. Sourly, Asquith was to label him 'the unknown prime minis- ter'. How his party must hope that another Bonar Law is somewhere in the wreckage.
New Labour, Old Lady
HUGH DALTON nationalised it. Stafford Cripps called it his creature — only joking, he explained. John Smith saw no point in becoming Chancellor just to have the Bank of England tell him what to do. Montagu Norman, its wiliest Governor, had a special place in Labour's demonology, and in Harold Macmillan's, for that matter. Which of them would have believed that, now that we have a Labour Chancellor, his first act would be to grant the Bank its indepen- dence? His first promise, to change Dal- ton's Act of Parliament? Short of privatis- ing the Bank, or putting its work out to ten- der, he could scarcely have done more to rewrite his party's scriptures. Soon I expect Norman to be canonised. Eddie George, his apostolic successor — if not his vice- regent on earth — could have asked for no more and indeed wanted no more. In a democracy, it must be for the elected gov- ernment to decide what it is trying to do — about the value of money, as about any- thing else. Once that decision is taken and a target set, the Bank's job will be to hit it. Governor George plainly thinks it well worth the influx of new directors and advis- ers who could in theory vote him down. He is even to have a spare Deputy Governor: as with the Monopolies Commission, why should there be only one?
Honest, Governor
REFORM was needed. The lofty Court of the Bank of England is good for a weekly lunch but not now for much else. It does not discharge a board's primary responsi- bilities of making policy and choosing the people to carry it out. Chancellors are apt to nominate their cronies to it, Kenneth Clarke could not resist this, and we shall now see whether Gordon Brown is more restrained. (One or two of Dalton's cronies failed to stay the course.) We shall also see whether all this is just another press-button solution to the nation's deep-seated trou- bles in managing its money. We are always tempted to believe that something or somebody will do it for us — the Bundes- bank, the Eurobank, even the Internation- al Monetary Fund if all else fails, as it so often does. The Chancellor calls his a British solution, designed to meet British needs for stability. That at least recom- mends it. If we want honest money, we can have it. So we always could. In our time we have turned out to want other things more and to want them sooner. One chart tells the story. This shows the value of money, weakened in three major wars — France, Germany, and the replay — but otherwise holding up for all the years from 1694, when the Bank was founded, to 1946, when it was nationalised. Peace and inflation came after.
Insomniacs' corner
HOMEWORK for the hapless civil ser- vants at the Department of Trade and Industry. Margaret Beckett, the new occu- pant of Whitehall's most rapidly revolving chair, has sent her staff a reading list. At the top is — but you guessed it — Will Hut- ton's latest. She explains that he wrote it in five weeks, apparently in his spare time from editing a Sunday paper. She compares him to Tom Paine and to John Milton. Hutton, thou shouldst be living at this hour, England hath need of thee. . . . I can only add that his book deserves its place on every DTI official's shelf, just next to Lord Young's The Enterprise Years.
Fool's gold
ONE UP for my Bad Investment Guide. Never invest (so I advised, a month ago) in a gold mine whose geologist falls out of his helicopter. This had happened at Bre-X, the Canadian company which claimed to have found the world's biggest gold deposit far away in Borneo. I got some shirty letters from Bre-X's trusting shareholders: why didn't I wait and see what the independent audit showed? It now shows that there was no gold in the mine, that the claims were a fraud and the samples were salted. My guide also warned against investing in com- panies whose shares were listed on Vancou- ver's stock exchange. I was sharply informed that Bre-X was listed in Alberta. From Kamloops, British Columbia, a local expert wrote enthusiastically: 'People do not "invest" in the Vancouver market. They take a flutter.' Rather like the late geologist.
Power politics
I HOPE that you were suitably inspired by my Thought for May Day and, in the brief moment between the crisis and the catas- trophe, took in a glass of champagne. My thought for today comes from Hilaire Bel- lc: his four lines 'On a Great Election' — the 1906 election, as it happens: The accursed power which stands on Privilege (And goes with Women, and Champagne, and Bridge)
Broke — and Democracy resumed her reign: (Which goes with Bridge, and Women, and Champagne.)
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