His hopes on the shelf, the PM discovers the dangers of making history poverty
The Prime Minister likes the idea of making poverty history. It gives him the chance to forget about Europe and think about Africa. Bob Geldof and his band can know that the lead singer of Ugly Rumours will be with them in the spirit, and so will any number of marginal voters who never warmed to Europe’s new currency and constitution in quite the same way. History itself may not be his strongest subject — only the other day he told us that the United States was the only country to have stood by us in 1940, a remarkable concatenation of errors of fact — and this would explain why he uses it in a dismissive sense: that’s history. So let poverty be history. The office of Lord Chancellor was history — as it proved to be, all 1,400 years of it, and could not be abolished for the asking. The pound sterling, too, was heading for the oubliette of history, and six years ago he launched the grand campaign that was to push it on its way. Britain’s destiny was to find its distinctive place in Europe’s evercloser union, and he himself would be the man of destiny. This week, as he puts his promised referendum on the shelf and the new currency and constitution with it, he must suppose that history has taken a wrong turning. So indeed it does. If he were more deeply grounded in it, he might be less ready to take it for granted, and more aware of the dangers of making history poverty.
Told you so
Now it suddenly seems possible that the pound sterling will outlast the euro. All over Europe, pundits and politicians have been waking up to the idea and registering horror or excitement. Central bankers and eurocrats gravely assert that it cannot possibly happen. The Germans find themselves told that suppressing their currency was their biggest mistake of the last 60 years, and Italians start to feel nostalgic for the lira. To faithful readers (if such there be) of City and Suburban, these ideas will come as less of a shock than they might to conventional thinkers. Europe had something to lose, so I thought, by scrapping its market in currencies. The euro had structural weaknesses, and the pressure of events could serve to show them up. The markets might not be content to assume that the credit of every country in the eurozone would be as good as any other’s. The single currency had been designed with an entrance and no exit, but that, too, might show up as a design fault. How right we were not to rush in, or how lucky.
Hopeful phantom
At least the euro’s troubles have their uses, as the time comes for us to set off south across the Channel. The ten-franc kir looms once more on the southern horizon. Hidden within the euro, the French franc sustains a posthumous existence, and its phantom exchange rate has now climbed to 9.70. At ten francs to the pound it will become economic for us all to go and drink abroad. As for the 3,000lire negroni, we may even be able to buy it with lira notes.
A second string
Diversions have their uses at such times, which may explain why Tony Blair has taken up financial regulation as a second string to Africa. Something is wrong, he proclaims, when the Financial Services Authority is seen as an inhibition to honest and efficient businesses. The FSA’s chairman has fired off a wounded letter and the Treasury has been left to wriggle, which may have been the idea. Grumbling at a slap-happy regime, the banks have found an unexpected ally. Their customers grumble, too — like my friend who, after 51 years on Lloyds’ books as staffer, manager and pensioner, has been told by Lloyds that he cannot use its Sharedeal service without proof of his identity. The banks blame the regulators, and the regulators say that this is all designed to stamp out money-laundering. To me it seems designed to get more and more information about individual citizens stored on official databases. This can always be done in the cause of security. Mr Blair may find that he recognises the argument.
Tim signs off
Tim Congdon is the mildest of men, except when he gets hold of a writing instrument and a piece of paper. So I shall miss the monthly excoriations he sends out from Lombard Street Research, which he founded in the distant days when the money market was still based there. He believes, as I do, that money matters — a tenet that has drifted in and out of fashion, but then, fashion does not bother him. He contradicts Adair Turner’s pensions commission, which asserts that we cannot fend for ourselves without encouragement and help. Nonsense, says Tim, we can and we would, if only governments would keep still and leave us alone. Officious and oversized governments are high on his list of bugbears. Now he wants to get some of these ideas within the covers of a book, and is retiring from Lombard Street to make time and room for it. Come back soon, Tim.
Mind the gap
Emerging like a mole from the rubble underneath St Pancras, my railway correspondent, I.K. Gricer, brings me word of a station disused before it could be used. Thameslink trains are running through it but, of course, they do not stop. The idea was that their passengers could get off, go upstairs and catch the Eurostar to Paris when the new service starts in two years’ time. So a large hole was dug and a large concrete box was built in it to house the Thameslink station, and all that remains now is to fit it out — except that this would cost £60 million and the Department for Transport has, understandably, declined to foot the bill. How much should it cost, my correspondent asks, to fit out a straightforward station with two platforms, one on each side? Already the Department (on its paymasters’ behalf) is finding £450 million for a new depot to maintain the Eurostars, not to mention the billions sunk in the West Coast Main Line. It may think that the railways have taken it for a ride. Mike Mitchell, its new director-general for rail, has the reputation of a cost-cutter. My correspondent advises him to fit this station out as a Great Western halt with tin pagodas for the passengers, thus saving upwards of £59 million.
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