16 MARCH 2002, Page 30

The trickery of tariff juggles, corruption at home and aggression to cover it up


Tariffs provoked the young Member of Parliament to cross the floor of the House. 'Send me', he wrote to an ally in New York, 'some facts about corruption, lobbying and so forth.' Preferential tariffs, he told the Prime Minister, must lead to the Americanisation of British politics. After that parting shot he felt free to fire broadsides: We know perfectly well what to expect — corruption at home, aggression to cover it up abroad, the trickery of tariff juggles, sentiment by the bucketful, patriotism by the imperial pint.' The rebellious MP was Winston Churchill, quoted in Roy Jenkins's lively biography. Tariffs, corruption, aggression, America — what prompted Churchill, of all men, to tie them together? He must have seen tariffs as something that money could buy. This was the heyday of the robber barons, a century, almost, ago. Their trusts and cartels dominated whole industries, such as oil or, of course, steel. Safe from competition at home, they could hope to prevent it seeping in from abroad by attacking the foreigners, waving the flag and greasing the right wheels on Capitol Hill. Now the sight of the world's biggest economy putting up tariffs to shelter its steelmakers brings Churchill's denunciations to life — but, of course, we have influence-peddlers at home, and some of them seem to be strangely interested in steelworks. As so often, his instincts were right.

Howard's start

HOW the Tories laughed. Silly old Gordon Brown. He had only been in office for three days, and what did he do? He let the Bank of England set interest rates. Mortgage rates would be sure to go up and the government would be unpopular. Tee-hee. Now mortgage rates are as low as they have been for half a century, and Gordon Brown is still in office and has seen off four shadow chancellors, and Michael Howard, fifth in line, has opted to start afresh. Letting the Bank set rates. so he now says, was brave and works well — so why mess it up by handing it over to Wim Duisenberg and co? We could agree on that and still wonder whether the Bank was given the right orders. It must aim at an ever-receding target, and make inflation come out at 2 per cent, two years ahead. There is a spurious precision about this, and I would more simply say that if home loans are so cheap and

house-price inflation so high, money must be too plentiful. I have always preferred Alan Greenspan's objective: to enable people to make their decisions without having to allow for inflation. Michael Howard might adopt it.

Don't bet on it

IF it sounds too good to be true, then it probably is. This rule of investment applies to the two self-proclaimed racehorse owners who wrote to me in the New Year, inviting me to place bets for them: 'An interest in horse-racing is not essential. At no time is your money at risk.' Since then they seem to have changed their names and addresses, but they wrote the same letter to one of my readers, who tried the scheme out. By telephone, they gave him a number of horses to back (they all lost) and two greyhounds, which won. Then they suggested that he should set up a betting book and send them £4.000 to get it going. They would, so they told him, win twice as much money for him, to begin with, and would then send the original £4,000 back. 'Throughout our conversation', he adds. 'the talk was of trust, personal connections, the Queen Mother is our patron, honour among gentlemen.' He posted off the £4,000 and the gentlemen disappeared from his radar-screen. If they write to you, bin their letter, or forward it to the police, who (it occurs to me) may have a file of them. Another entry for my Bad Investment Guide.

After Arthur

IF accountants were bankers, the Competition Commission would be crawling all over them by now. The Big Eight firms had got down to a Big Six, and then to a Big Five, even before Arthur Andersen opted to take its own advice and put itself through the shredder. It wants to sell out to one of the surviving firms, bringing us down to a Big Four. Why its disaster with Enron in Texas should force British companies to play eenymeeny-miny-mo when they choose auditors, I cannot say. Andersen has a perfectly good, although rather expensive, audit practice here, and surely someone — like the partners, for a start — should buy it out? With the money they could save on air tickets to and from the Chicago head office, and conferences and advisory councils and marble halls and rubber plants — mandatory, until now, among the Big Five — they could be highly competitive. Or can it just be that auditing is a bad business, now that the fees have to cover the cost of insuring the firm and its partners against the next Enron?

Replacing the market

A NEW flagship head office is always a bad sign — ask British Airways — but it seems to be top of the wish-list at the European Central Bank. I learn from a quick scan through Euro Property that the ECB, which must think that its Frankfurt head office is not grand or big enough, plans to move across town and buy the Grossmarkthalle, a new development on the site of what was once a market. This may be symbolic — the ECB stands on the site of Europe's market in currencies — but I still rate it a sell signal.

Jack the Lad

I LEAD a sheltered professional life. In the course of my work I have often adjourned from the boardroom to the luncheon-room, but never from there to the bedroom. I differ in this from the editor of the Harvard Business Review, who, when she went to interview 'Neutron Jack' Welch of General Electric, got on with him like a disorderly house on fire. Then the story got out, and Neutron Jack has sustained a nuclear counter-strike from Mrs Welch, who is suing for hundreds of millions of dollars, and the editor has temporarily stepped down. 'Dear Mr Fildes', so the Harvard Business Review writes to me, 'Your career isn't just about money, is it? It's about something deeper. Something so central to what makes you tick that you can't imagine living without it.' At this point I made an excuse and left.