CITY AND SUBURBAN
Losing power, listing, in need of a tug Trafalgar hoists the same old signal
CHRISTOPHER FILDES
Inow see that Trafalgar House must have been so named by Admiral Villeneuve. As a maritime disaster, strate- gic and tactical, it is sure of its place in the textbooks, and has something to contribute to my Bad Investment Guide. Now some Norwegian engineers called Kvaemer seem to think that it might be a good investment, and the best of luck to them. The great eastern trading house of Jardine Matheson conceived the same idea four years ago, when Trafalgar, like its latest cruise liner, had lost power, was listing and urgently needed a tug. Jardine's raiding party swarmed on board. Just what we need, they thought, to solve our tax problems — and surely the bad news is out of the way by now? True, but Trafalgar showed immense resource in conjuring up more bad news, losing in these last few years more than £600 million. All that has changed is the apologist for Cunard, who used to be called Mr Cocup but is now called Mr Flounders. For my Guide, two morals present them- selves. First, when a company is badly man- aged, never assume that the market knows the worst. If the managers don't know what they are doing, how can anybody else? Sec- ond, never invest so as to gain a tax advan- tage. Tax breaks are good servants to investors but bad masters, and one sure way to solve your tax problems is to lose enough money. Going bust is surer still.
A boon is doggled
THEN felt I like some watcher of the skies when a new planet swims into his ken. Before my very eyes, a boondoggle is being born. It has all that a boondoggle should have — air tickets to Bangkok and a cast of thousands, with everything laid on regard- less (as with all good boondoggles) of cost or point. The Prime Minister will be pre- sent at the birth, and that nice Mr Bruton is flying out too, so Bangkok might be just the place to talk about Belfast. What has lured them there is the Asia Europe Meeting. Nothing too specific about the agenda, of course. It will set goals for relationships Bangkok is good at them. It will set Europe trading with Asia, something that would obviously never have occurred without a boondoggle to show the way. Will it reach any decisions? I can think of one. All pre- sent will agree that the meeting was most useful — so useful, in fact, that it must be a regular fixture, with the venues alternating: in Nice next year, perhaps, then Bali. . . . For this it will need a well-paid secretariat, with even more air tickets —unless, that is, John Major stands up in Bangkok and says that the world has enough boondoggles, and enough boondogglers keeping them going at everyone else's expense, without conjuring up new ones. I fear that he is too polite. Next time he should send someone ruder. I could use the air ticket myself.
Send for Peter
PETER Peddie is retiring again, so I expect to see him on an earlier train to work next week. That is certainly what happened last time. He was the partner in Freshfields, the City solicitors, who looked after his firm's grandest client, which is the Bank of Eng- land. When Iran took American diplomats hostage and the Americans froze Iran's money abroad, the Bank volunteered its services as honest broker, and sent for Peter. With Kit McMahon and David Som- erset, he was flown (supposedly in secret) to Algiers, where the three of them man- aged the deal — huge, complex and dan- gerous — that simultaneously released both hostages and money. When the Bank of Cocaine and Colombia was busted, the Court of Appeal lent Lord Justice Bingham to investigate. His report blew a kiss to the Bank's lawyers (who in earlier years, as I seem to recall, had shrewdly briefed Bing- ham QC for the Bank) but recommended that there should be a legal adviser on the Bank's strength and within its walls. Since Peter was retiring from his partnership, the Bank snapped him up, and he at once found himself working a longer day — for now that he was on the spot, everybody could drop in and ask what Peter thought. `Since he became involved in the Bank in the 1970s', says Eddie George, the Gover- nor, 'Peter has been a tower of strength, keeping the Bank out of the courts, and the Governors, not to mention the Iranian hostages, out of jail.' It just goes to show what good advice can do.
Money can't buy me love
MARTIN Taylor, Barclays' chief execu- tive, has an unpopularity index for banks. Just now, he says, its level is more or less normal. That ought to worry him, because if the banks are not popular (well, relative- ly popular) when money is so cheap and plentiful, when will they be? How will his index read,when the loans they are gaily pushing out start going wrong? Nothing gay about Barclays, Mr Taylor would protest but, as he once told me, the banks have a job of rebuilding to do: 'It's about reputation and not about image. You do it brick by brick.'
Lloyd's goes west
ADRIFT in the back streets of Westmin- ster, I find myself confronted with a sawn- off version of the Lloyd's of London build- ing, complete with the lifts that crawl up and down like beetles. Over the door, a placard whinges: 'Stop cheating the viewers — change the funding formula.' I recognise this as Channel 4's ego trip, the specially designed head office which, when I last heard, was going to cost £60 million, mostly in borrowed money. Lloyd's in the end sold their building to some Germans who have leased it back to them — who else, after all, would want it? — and Channel 4 could always try that. Then it could dry its eyes about its funding.
Post mortem
ONE year on, I pause to lay a wreath upon the grave of Barings. The post-mortem reports are now in. Immediate cause of death: haemorrhage. Terminal disease: injelititis. First diagnosed by Professor C. Northcote (`the Lawgiver') Parkinson, this condition sets in at the tertiary stage of decline. Its symptoms are incompetence and jealousy, exacerbating each other. In Barings' case they were inflamed by greed. Alas for Thomas Baring's aspiration: 'Half my pleasure is to work for a house which we intend to be perpetual.'
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