Back on its old form, the Treasury is happiest when minding other people's business
CHRISTOPHER FILDES
The Treasury when I first knew it wanted to do everything. Asked to finance the Bognor Regis bypass, it would have views on where the roundabouts should go and what colour the cat's-eyes should be. A series of shattering crises slowly taught it that minding its own business was hard enough and that other people might well be left to mind theirs. Under Gordon Brown, who has been Labour's only crisis-free Chancellor, the lesson has been wearing off. He excelled himself this week, getting off to a flying start and laying down the law two days before the Queen disclosed to Parliament what the next set of laws were going to be. Muscling in on the Department of Trade and Industry, he conjured up new laws to enforce competition and prison sentences to back them up. Competition, he must think, is what the DTI needs. The Department of the Environment (now garnished with food and with rural affairs) might imagine that it calls the shots over planning, but the Treasury thinks it knows better, and indeed it could hardly know worse. Pouring huge sums into health and education, it will want to know where the money goes and have views on where it should go. So a Chancellor who believes in competition finds himself manipulating the economy from the centre, and financing the biggest and clumsiest monopolies of all. I remind him of the moral that Sir Peter Middleton, now Barclays' chairman, drew, when he looked back on his years in the Treasury: 'Even if you have a badly functioning economy — which in many ways we still do — it is always possible to make it worse by government initiatives.'
Life-enhancing
I DROPPED in on Brian Williamson (Sir Brian now) when he took over as chairman of Liffe, the financial futures exchange. His previous visitors had been a team of three: one carrying a nameplate for his office door, one with a screwdriver, and one to supervise. Surely, I said, this was what he had expected to find — too many people, screwing things up. It was true. Life had succumbed to an illness which afflicts exchanges and had started to think of itself as an institution. Symptoms included a corporate history (for Life's fifteenth birthday) and the statue of a gesticulating trader in the street outside. Suddenly, its condition was desperate, and the call went out for a new chairman. This, in the City, is a telephone call from the Bank of England followed by an imperative request: 'There's something we want you to do for us.' It turned out to include shutting the trading floor and consigning the trader and his stripey jacket to their place in history, but Life is showing the way again, and one of its distinguished Old Girls, Clara Purse, has crossed the road to teach its lessons as the newest chief executive of the Stock Exchange.
Champagne and caviar
SIR BRIAN's knighthood honours his achievement in hauling Liffe back from the brink, but I see it as a salute for Kenneth Whitaker, who built up Gerrard & National, the money market house, on a steady diet of champagne and caviar. Sir Brian started in the City there, maintained its best traditions when he became chairman, and now becomes the fifth member of Gerrard's small team to be knighted. He joins Sir Peter Miles, who was Keeper of the Privy Purse and Treasurer to the Queen, Sir David Money-Coutts, who as chairman of Coutts was her banker, Sir Anthony Montague Browne, who was Churchill's last private secretary, and Sir Roger Gibbs, who as chairman of the Wellcome Trust saw it grow into the world's biggest grant-giving charity. It just shows what good living can do, and Kenneth, the kindest of hosts — one of his lunches laid me out until the following Monday—would have loved it.
No tick from Pirc
MY friend Sir A has had a run-in with Pirc, the transliterally challenged arbiter of corporate governance. He is chairman of a 'tracker' investment fund, which replicates the market's movements for the benefit of institutional investors such as pension funds, and was startled when Pirc (which stands for Pen sions & Investments Research Consultants) opposed the adoption of his fund's report and accounts. What was wrong with them? Well, they said nothing about the fund's policy on the environment, so Pirc could not put a tick in the appropriate box. Sir A wondered what sort of policy a tracker fund was meant to have, apart from tracking. The Pircsters thought about this and came back to suggest that the fund must own a lot of computers, so, when they wore out, its policy should be to dispose of them in an environmentally friendly fashion. Another box ticked. If business were only so easy to run.
Rise and shine
SENIOR managers seem to need unusual incentives to get out of bed in the morning, and Lord Simpson, coming into the General Electric Company as chief executive, collected more than most. He got an elaborate package with £.10 million peeping through the wrapping. Then he gave GEC a new name (it's Marconi) and a new mission in the exciting new world of telecoms. Now the excitement has worn off, and the share price is back where it was before Lord Simpson got there. Marconi's response has been to halve the price at which the senior managers' share options can be exercised. Otherwise, I suppose, they might all stay in bed.
All change
A DEMANDING week for the City's quick-change artistes. On Wednesday morning Lord Midas, chairman of his family bank, attends the state opening of Parliament in coronet and ermine. Then he hurls himself into his morning coat and black silk hat and hurries off to Ascot, On his way back in the Bentley, he must somehow wriggle into dress shirt and black tie to attend the Lord Mayor's dinner for the City's bankers and merchants. He blames Her Majesty's ministers for letting these events pile up, and he cannot think Her Majesty is best pleased, either. The Chancellor of the Exchequer, who is the Lord Mayor's guest, does not believe in dressing up, so he will not be seen at Ascot and will come to dinner wearing a red tie, as usual. What began as a graceless act has now matured into a pointless City tradition. It still makes Lord Midas grumble.
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