18 JANUARY 1975, Page 28

Skinflint's City Diary

'What God abandoned these defended And saved the sum of things for pay'.

But indeed who shall be saved? As companies increasingly crowd round the Whitehall doors, their begging bowls pathetically outstretched, who will decide which should be allowed to sell their souls for a handout and which should be left to founder? For we surely cannot help them all.

The Confederation of British Industry is to put this very point again to the Prime Minister as part of what it hopes will be a series of discussions. It too is concerned at how much cash there is and who is to get it and so wants the groundrules clarified as soon as possible. Like the rest of us the CBI has been a trifle bewildered about how the decisions have been, are being, and will be made. As far as one can tell Anthony Wedgwood Benn has been working on hunch and instinct, and not only ignored but acted in direct opposition to the' advice given by both the Industrial Development Advisory Board (composed of merchant bankers, accountants and industrialist) and his own senior civil servants.

As a result, the disgruntlement at the Department of Industry which I mentioned just before Christmas, has now burst into an open conflict almost without precedent. It has emerged that the permanent secretary, Peter Carey, is so concerned that he should not be party to his minister's actions that he has placed on file his formal objections. That relations between a cabinet minister and his top advisers and administrators should have broken down so completely that the department dissociates itself from decisions — Mr Carey is not alone — is extraordinarily rare. And nobody can remember such a clash being made public before.

So Mr Wedgwood Benn is on his own, with the experts certain he is making a mess of the task. It is rather sad really, because he does mean so well. What a pity his naive enthusiasms and zealous idealism could not have been canalised in some job where the divorce from reality and the inability to see beyond teatime would have been less of a handicap. Perhaps as Home Secretary he would do less damage. The Department of Industry needs somebody else.

The public purse' is not bottomless and so not every company can be helped. But if all the most vulnerable, precarious concerns now struggling are resuscitated, the more efficient ones who lasted longer and hence may be more deserving may have to do without government assistance because the cash has run out. Which is why we need criteria. Are we to support companies because they export a lot (how much is a lot — or do we mean as percentage of total production?), or because they are large employers of labour (how much is large and how do you calculate consequential dependencies?), or because they have advanced technology (does that have to be home-bred?), or because they are of strategic importance? Or do they have to match all these conditions?

Plainly workers' co-operatives like Meriden, IPD, and the Scottish Daily News are not economically sound operations and are 'social experiments' in non-capitalist, publicly funded corporations. But Burmah is important for its North Sea oil, though if that were valuable other enterprises might have been prepared to buy it off the company. British Leyland is a big employer. But what about Aston Martin or G. Stibbe?

There is also the danger that the government will only get the hopeless companies coming to it anyway. If a corporation has a serious chance of turning round to profits soon, but has a temporary and not too vast need for working capital, it can often find help from the normal financial institutions. It is often when the banks have decided they cannot afford to throw good money after bad that disaster threatens and the plea for public assistance is heard.

But as Aston Martin found, the help is not without strings and conditions. Considering the price, many companies might consider following the advice St Paul gave to the Philippians: "Work out your own salvation with fear and trembling."

It seems the taxpayers have sufficient money to support most of the collapsing corporations coming to the government for help, but not the one which can count most of us as consumers — the BBC. The Beeb is now suffering from a serious cash shortage. It has always resisted direct funding from the state on the theory that this would give governments the power to interfere with its freedom of speech. And though less often mentioned, the BBC is also concerned not to appear as a state propaganda agency.

The first aspect of this has now been shown not to be an adequate safeguard. The corporation's income is still within the Government's control as we can clearly see from the current disinclination to raise the licence fee. This has led the BBC to curtail programmes — rather shrewdly though, it is not the most expensive programmes which have been cut but chunks of Radios 3 and 4 which appeal to the middle classes, who presumably are the most articulate and will protest loudly enough to produce an effect.

Having so far failed to get the licence fee increased to offset inflation, the BBC had to protest more forcibly by cutting the service, which so far has also made no differenCe. Now, whether the Government is starving the Beeb for good reasons (for example, unwillingness to burden us with more spending, or in an effort to make the BBC more efficient) or bad reasons (like political pique) is irrelevant. The effect is the .same and demonstrates clearly how much power politicians have over finances and how they can hit back if their paranoia convinces them the BBC is on the other side.

Given this sort ot persecution mania and the present willingness to cut funds (in real terms), the BBC can hardly claim the present system of financing provides the satisfactory detachment from the political arena which it wants, and claims the licence money provides. Surely it would be far more sensible to get a direct grant, though perhaps it would not hurt to have a buffer body administering and transmitting the money. If such a grant were made, say through the Arts Council, it could be decreed to be automatically adjusted annually for inflation, and so the independence need not be prejudiced.

The overseas side already gets direct subsidy, but the BBC has not so far claimed that this has undermined the fairness or accuracy of those transmissions. And the prime minister appoints the chairman. A practice which seems to the untutored eye to have possibilities for far greater abuse of power, and for bringing the BBC to heel. So far it has failed completely to do so, though the successors to Sir Hugh Greene seem to have lacked the sting the corporation formerly had. Though at times the Beeb alternates between Reithian hauteur and second-hand American vulgarity, on the whole it provides a decent service (with particular praise for Radio 3) and ought to be less of a political football than it now is. An inflation-free income and independent chairmen seem essential safeguards for this.