CITY AND SUBURBAN
Look at that big hand nearing high noon it's time to check up on the script
CHRISTOPHER FILDES
Agnomic prophecy reaches me from the Sybil of Wall Street: 'President driven by rising polls. Looks like High Noon, Slick Willy's favorite movie. Markets have not repeat not begun to discount sheriff shot dead 1995 revival.' Simultaneously comes word of the winding down of the govern- ment of the United States. Almost a mil- lion of its employees are on notice of being sent home because there will be no money to pay them. The paymasters in Congress had offered to find it, but not on terms that President Clinton would accept, and Congress has set limits on his powers to borrow. In New York last month, the word from the Sybil's cat-haunted cave was that a new moon and total eclipse of the sun Portended signs and wonders in the mar- kets. Keeping the government waiting for money was an old game for Congress to play, but this Congress was full of new play- ers who might not know the rules or might want new ones. They might think that the government would be better with less money, or the country better with less gov- ernment. In the opening moves, the Presi- dent has been relying on a classic 'beggar's sore' technique — closing the zoos and parks to shame their paymasters into Coughing up. The Treasury remains open and has found $100 billion in a tin box to pay this week's instalment of interest on the national debt. The markets assume that however much the tension may build up, the action will follow the script and Sheriff Clinton will emerge with his tin star and tin box intact. I dare say he will, but history tells me that every so often Americans ask how much central government they want and are prepared to pay for. If this is such a time we may see signs and wonders.
Carry on borrowing
I DO NOT foresee that our own dear Gov- ernment will run out of money. Not this time round, anyhow. For one thing, it can always print some more, and for another, there are no limits on its powers to borrow, except such limits as there may be to the lenders' patience. The pre-budget omens now portend an increase in the Govern- ment's borrowing plans, this year and next. They also portend tax cuts, but the Trea- sury would like us to believe that there is 110 connection, It is enough to make the Sybil's cat laugh.
Downey's happy landing
NOLAN has spoken, the Commons have voted, and Sir Gordon Downey, their sleazebuster general, has gone straight into action. First he will install himself in a suit- able office, and then he will put some ques- tion to the Tory backbencher about an interest in water. It is a lucky thing, or I suppose it is, that this retired mandarin (and sometime Comptroller and Auditor General) was available for the job that Lord Nolan invented. If everything had gone according to plan, Sir Gordon would still be deep down in the docks with the Personal Investment Authority. When this regulatory omnium gathering was called into being, Sir Gordon was chosen to be its first chairman. Its progress was slow. I likened it at the time to that grand design from post-war aviation, the Bristol Brabazon: over-engineered, over-expen- sive, overweight and overdue, it bumbled majestically around its home base but never saw service. The PTA's trials carried on without much sign of lift-off until some- body (can it have been Andrew Large at the Securities and Investments Board?) leant on the button which activated the ejector seat. Sir Gordon left abruptly. With a new captain, and after some jettisoning of dead weight, the PIA took to the air and is now in service. As for Sir Gordon, his parachute opened and he has floated down to make a perfect landing on the Palace of Westminster. I shall watch his progress with attention.
Duck, here comes Tony
THE CONFEDERATION of British Industry wants to be friends with every- body. Show it a choice and it ducks. So a friendly-sounding speech to its conference from Tony Blair is enough to make it roll it over, and if there is a party going on in Europe it will always be frightened of being left out. We must avoid the frenzied fringe, says its president, Sir Bryan Nicholson, who used to run the Post Office. I used to parody its monetary policy: exchange rates should be stable and competitive and money should be sound and cheap. It went on to favour a single currency as a way to save its members thought and inconvenience. They had a ter- rible time all through the Exchange Rate Mechanism party, and the CBI quite failed to spot the connection. Does it now want the costs and constraints that come with the social chapter, or wages set by law? Not exactly, but it wants to be friends with that nice Mr Blair. So it ducks again.
Monsters and managers
THREE water companies have now been formally accused of providing poor service, inadequate supplies and polluted water. They serve three of the wettest areas in England, and North West Water, which brings rainwater to Manchester, is one of them. Ian Byatt, the regulator, is investigat- ing their failures of management and has been threatening to invoke his special pow- ers against them, North West is now taking over its electrical neighbour, Norweb, and Ian Lang has waved this merger past the Monopolies Commission. He says that he is satisfied with the regulators' assurances. What assurance can Mr Byatt possibly give that this hydro-electric monster can be managed for its customers' good?
Bank charges INFLATIONARY tendencies at the Bank of England: the price of its Quarterly Bulletin (with which its Inflation Report is thrown in) has gone up by a quarter. My friend Bill Clarke, who apparently reads it for pleasure, finds himself asked to subscribe £30 for it instead of £24, and with the insight that marked his work as a City editor identifies this as an inflation rate of 25 per cent. Then he opens it up and is told that inflation is just over 3 per cent. Challenged, the Bank retorts that he could always subscribe for the Infla- tion Report separately if he wanted to (he doesn't) and that this price is being cut from £16 to £12, representing an inflation rate of minus 25 per cent. When it comes to manip- ulating statistics, the Bank in its 301 years has learned a thing or two, plus or minus.
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