CITY AND SUBURBAN

If you take my advice, you'll pay for it the man from McKinsey is here

CHRISTOPHER FILDES

The McKinseyfication of Britain takes a step forward with William Hague. The Conservative party has not until now come close to being led by a management consul- tant. John Major had been a bank manag- er, Margaret Thatcher a barrister, Edward Heath graced the parlours of Brown Ship- ley and the Church Times, Macmillan was a publisher who married a duke's daughter, Alec Home, more simply, was an earl. Mr Hague came down from Oxford, flew through Shell, and settled down at McKin- sey to tell other people what to do and how to do it. He told them this for large fees you wouldn't want to ask a cheap consul- tant for advice, now, would you? — until the time came to go into public life. He will have found that McKinsey people were already there or thereabouts. The Confed- eration of British Industry is a McKinsey old boys' club. Sir John Banham, who was its director-general, belonged, and so did Howard Davies, his successor, now to be the grand panjandrum of financial regula- tion. (He is reported to be calling in McK- insey.) Mr Davies was followed by J. Adair Turner, straight from McKinsey's back room and still blinking in the limelight. I find the CBI's advice on policy well worth not taking, but that may be just a coinci- dence. Nor should John Major's downfall necessarily be blamed on Norman Black- well, who came from McKinsey to head his policy unit at Downing Street, or Carolyn Fairbaim, the McKinseyette who came with him and is now at the BBC thinking strategic thoughts. Their policies were never published with their names on them but we can assume that they were brilliant, for that is McKinsey's house style. I am just not convinced that this is the stuff of which political command is made. I might consult a consultant, if I had to, but I would rather be led by a leader.

Lloyd's cuts it short

GRATITUDE in politics is a lively sense of favours to come. Ian Lang was the winter favourite to be Lloyd's of London's next chairman. Now he has dropped out of his ministerial revolving chair, out of Parlia- ment and out of the running. A cast around for a Cadbuarially correct Rentachairman got nowhere in particular, and I learn that that the selectors are down to a short list of three: Max Taylor, from Willis Faber, the Lloyd's brokers, Adam Broadbent, from Schroders, the merchant bankers, and Jonathan Agnew, chairman of Limit, the biggest of the new specialist insurance com- panies which do more and more of Lloyd's business. Mr Agnew heads the betting. He also heads the party that is working on the annual joint venture, in which Lloyd's sur- viving individual members band together. There are powerful forces at Lloyd's who would like to disband it. No one in a million years would think of reinventing it, or sug- gest that an insurance market's liabilities, some of them maturing over half a century, are best met by a series of clubs, each with a one-year life span. I am sure that Lloyd's, like most markets, needs a few active pun- ters who can chance their arm, and Mr Agnew must try to preserve them, but I see no future for its country members and not much for their agents. My test for a new chairman is to find a tactful way of putting that.

Send for Bognor

HERE'S a case for Simon Bognor, the investigator from the Board of Trade who unravels murder mysteries in haunts of crime like gossip-column offices and Oxford colleges. His next port of call should be Rickmansworth, home of what was once the Life Assurance Company of Pennsylvania. This was where Tim Heald, the novelist whose creature Bognor is, con- tributed £370 by way of premiums all of 27 years ago. Last year he wondered how his money was compounding after all this time. His insurers, now called Transatlantic Life, told him that it wasn't. Thanks to their assiduous stewardship his policy was now worth £354. He tried again the other day and found that it had shed another £2. If he reaches a good old age he may outlive it. It will have gone to pay rent and salaries in Rickmansworth. I am sending Mr Heald a book of mine, entitled How to Make Money Out of Life Assurance. My advice is: 'Don't buy it, sell it.' I hope, though, that Bognor of the Board of Trade is on the trail.

This year, next year . . .

SOMETHING is the matter with my time machine. It seems to have its wires crossed with my fax. In the shoal of paper gently forming on my desk I find a correspon- dence with familiar signatures, but with unfamiliar dates. Perhaps Alastair Camp- bell has planted it on me.

`Threadneedle Street, 10 June 1998: Dear Chancellor, A year ago you set me a target for inflation. It should be 21/2 per cent, you said, and if it went 1 per cent higher or lower I was to write to you and tell you why. Now it has gone over the top, and we have put interest rates up again. I thought I would blame your predecessor for not tak- ing my advice. Should I apologise, or will this do? Yours, Eddie.'

'OK. Gordon.'

. . . sometime, never

`10 JUNE 1999: Dear Chancellor, I now have to tell you that inflation has fallen through the bottom. It is below 11/2 per cent, and lower than it has been in your and my lifetimes. At your target rate, money loses half its value every generation. I pre- fer Alan Greenspan's objective, which is to get inflation low enough for people not to think about it. Should I apologise, or will this do? Yours, Eddie.'

`I'll think about it. Gordon.'

Blithe spirit

IT IS a nice thought of Michael Meacher's to find business sponsors for endangered species. He is a bit of an endangered speci- men himself. Now, though, he has arranged for us to hail the Tesco Skylark or, in its plashy fen, the questing Norsk Hydro Vole. I hope he will go on to find sponsors for endangered business species, like the Top Hatted Bill Broker (now a rarity), the Job- ber (mostly stuffed), and Nomen Lloydsil, still clinging to life in old rectories. He should know that at NatWest Markets, whose ecology is threatened, the parent bank is reconsidering its sponsorship.