Skinflint's City Diary

The fringe banks should, I suppose, have been saved by the intervention of the Bank of England but a condition that may or may not have entered into the 'secret treaty' arrangements is the extinguishing of the fringe banks' shareholders' equity as a condition of the rescue. It would be a bad example if big five bank funds are to be put at risk, even at penal interest charges, to save shareholders who would see this as an encouragement to back this sort of vulnerable activity the moment the present crisis passes. One of the first steps that Denis Healey, the Chancellor of the Exchequer, should consider is the reversal of the disastrous 'Competition and Credit Control' policies of the Conservatives.

Sir Don Ryder

Sir Don Ryder, the chairman of the Reed Group, made a typically wise and well-reasoned appeal on television, advising the new Labour administration to incorporate into their budgetary programme import control in some form as well as suggesting that they follow a policy of corporate profit retention to encourage capital investment. If this is coupled, as has been suggested here, with free depreciation the amount of new investment in equipment would rise very fast, though care should be taken that import control proposals had already been negotiated with the EEC (pending withdrawal from the Market) or the strain on the balance of payments will be severe.

Needless to say, there will he importing interests that will state that only the most modern plant should be bought and that thus there must be free importation. This argument must be rejected. There are few articles of capital equipment that cannot be made here if the demand is sufficiently strong and anyway making under licence is available. Where the demand is very specialised or low

it would be simple to reintroduce import licences or a slightly more rigorous scrutiny of exchange control applications.

Help for authors

One of more tolerable effects of a socialist administration is the abandonment of a public lending rights bill to assist authors by paying a small fee according to the number of times a book is withdrawn from a public library. This measure was plainly impossible to draft, though the last government and their spokesmen, Norman St John Stevas, gave a conciliatory nod in time for the election.

Now that the measure is dead, it might be as well if authors gave some attention to some other means of augmenting their incomes. Hitler found little difficulty in earning royalties from Mein Kampf by decreeing that it should be in every soldier's knapsack, which is one way. My own small suggestion is more sweeping. A hard-to-swallow fact is supposed to be that on average each household possesses fewer than five books. If this is so, why not issue book tokens to the value of £10 a head that are strictly non transferable and paid fqr from educational appropriations? The publishing trade would become as lush a pasture as the legal profession since the start of legal aid. Authors would become the new rich and the rest of us have the chance to catch up with the studies we have been missing from Auberon Waugh and Harold Robbins.

There would need to be a high degree of control, and serious consideration given to excluding the works of sociologists, the radical chic and winners of the Booker prize.

Fleet Street letter

The Fleet Street Letter is a weekly business newsletter and share tip sheet which advertises for subscribers in the Financial Times. A subscriber received the following letter from them, dated March 4:

Your subscription to the Fleet Street Letter at E15 per annum fell due with the issue No. 1338 of December 13, 1973. With that issue we sent you a renewal notice stating clearly: "subscriptions cancelled only on notification." We have sent you two reminders requesting payment, but have had no word from you. There may be some perfectly valid reason for this, but if so we would be grateful if you would tell us by March 18, 1974. May I remind you that the number of subscribers to the FSL is restricted to 5,000. If a subscriber who intends to cancel hangs on to his subscription number, then this prevents us giving his number to someone who wishes to subscribe.

Yours sincerely, (Signed) Wilfrid Ryder

Mr Wilfrid Ryder is the editor and director of the FSL and I'm sure that the words he uses, "subscriptions cancelled only on notification" have been used so as not to infringe the unsolicited goods act or inertia selling regulations. Nevertheless, the bit about hanging on to a subscription number preventing Mr Ryder from giving the number to someone wanting to subscribe is interesting.

A bottle of champagne from me to the first person who sends me evidence before March 31 that he's had his cheque returned by the FSL and is still waiting to be put on their subscription list.

Estate duty

There must be dutiful parents worrying that they have not made proper inter vivos or death duty provision in time to beat Mr Healey's budget. My own attitude is more resigned.

One method of estate duty mitigation that works, and it goes for most taxes, is to leave the jurisdiction. Leaving the country is easy enough, but abroad is hell except for holidays, and worst of all you're not here to make more money. If you are the possessor of an estate that has been in the family since the Plantagenets, I suppose there is a deep urge to fight to not let it go. For the rest of us, our possessions seem so transitory and replaceable that it appears to be a pompous tinence to ask anyone to take them over when we are dead. If the death duty arrangements were to leave the surviving spouse and children alone for one generation, there would surely be far fewer complicated discretionary trusts and settlements arranged. The cost of such arrangements must be far greater to a family and the country than is the tax avoided.

Looking around, it seems that men with capital do not divide their fortunes into capital and income as they may well have done in the past, living from the income after paying income and surtax. They treat their money as a single

Spectator March 16. 197 growing thing. ro appreciates in value, shares rise and fall, and private ventures come and go; antiques and pictures may be seen to be appreciating against the market. These men see their capital position increasing, and they spend whatever they feel they need. When cash on hand is short, they raise a bank loan, or sell an asset, ignoring the receipt of taxed dividend income alone. It is this identification and use of a fortune as a growing thing that is missed by the beneficiaries of settled funds. Of course, they buy capital items — houses and property particularly — that then belong or are charged to the trust. But what these beneficiaries miss is the pleasure and interest in watching, protecting and building up a fortune through participation In, gambles, new ventures and expeditions by way of trade. The intertwining of capital and incorne naturally presents dangers as well as rewards, in that there's a greater element of exposure, but the fun of the market is personally stimulating and must be beneficial to the entrepreneurial system. It might be argued that the ta.% system should slant towards discouraging the setting up of trusts by private settlers, not so much to avoid the loss of tax to the state, but more obviously to energise new enterprise and what might be called the velocity of capital circulation.

The Bedford Estate

The Duke of Bedford's trustees own a lot of buildings in Blooms: bury, and are the freeholders many properties let on long leases near The Spectator offices. They have been building some new flats and have been boldly advertising the family's connection hY marking them with a grand ducal coronet carved in stone and set the foundations. A handsome an° florid gesture, but more appropriate I should have thought for the hey-day of the Russells than for the nineteen-seventies when there is a left-wing Camden Council sitting on top of therm taking a beady interest in wh° owns what.