Skinflint's City

Diary•

Young Lord Vestey the meat packing king is a handsome fellow. He has come across as likeable and able in being interviewed about the troubles at his Midland Cold Storage Company.

The Vesteys are immensely rich. The present Sam Vestney's grandfather Sir William became the first Lord Vestey and suffered severe criticism in the debates following the Lloyd George honours scandal. It was stated that Sir William had moved his business to South America during the First War to dodge taxes and admitted to throwing out of work between 3,000 and 5,000 men. Old Vestey, when he entered the House of Lords, made a personal statement saying he had transferred his business abroad as he could not compete with the meat packers Armour and Swift, if he had to pay British taxes. There seems little doubt that Lord Vestey paid for his peerage, since he did not, as was suggested to him, take the opportunity of assuring the Upper House that he had not paid any money directly or indirectly to Lloyd George party funds.

Despite the seedy background to the Vestey's ennoblement an apparently highly satisfactory descendant now holds the title. If the House of Lords are to be in any way representative and useful it is pleasing to see the young head of an important business being in the Lords amidst the Hampstead reach-me-down life creations of Mr Wilson.

Stooge B Ltd

Here is a wrinkle if you have a business• you are thinking of selling by way of takeover or flotation and are worried by Capital Gains Tax.

When a company is sold in exchange for shares no Capital Gains Tax is payable. If it is sold for cash or part cash, tax is payable. Let us say your newly formed company, with good earnings and little by way of assets, is to be sold for £500,000 cash to a outside party and of course subject to the Capital Gains Tax. The trick is to sell your company the same day Or just before to a newly formed Stooge Company B — newly formed, and owned by you. The price is £500,000 payable in newly created shares in Stooge B Ltd. Stooge B Ltd., then sells for cash to the ultimate purchaser. The result is that you own half a million £1 fully paid shares in Stooge B Limited which has, as a sole asset, £500,000 in cash. Best of all you have nothing by way of Capital Gains Tax to pay, just the stamp duty. Getting the cash out of Stooge B Ltd., is another problem. For the time being live corporately and thank heaven you have no wasteful tax to pay.

A simple enough idea, I know. If you have not heard of it and it is of any use YOU may care to send me some little token in a plain envelope. Watch one thing, The Inland Revenue have the power to tear aside a corporate veil if it suits them.

National Trust

In May I mentioned that Woolbeding House near Midhurst, which belongs to the National Trust, was not finding a tenant, becaust of the Trust's miserly attitude to the granting of long leases. Short leases do not give the tenant any equity in the property, and thus the chance of using the lease as collateral for a dilapidation loan. The National Trust have now, I am pleased to say, changed their policy. Woolbeding has found a tenant, a Mr Simon Sainsbury (presumably one of the grocery family), who is to be given a fairly long lease in exchange for a guarantee that he will return the house to its original William and Mary period by removing ugly Victorian additions.

Mumbo-Jumbo

Another aspect of the problem of transporting Asians from Uganda has come to light. The managing director of East African airlines now involved are British for at least 50 per cent of the charter business involved. The two main nonAfrican airlines now involved are British Caledonian and BOAC. Amin has now said that all Asian emigrants are to go on East African Airways planes, apart from those who can fit on to the normal scheduled flights. East African Airways are a state co-operative, jointly owned by Tanzania, Kenya and Uganda. This co-operative required a large initial capital outlay, to which, interestingly, Uganda has not yet made her contribution, unless of course, Amin's substantial gift of all the charter business could be interpreted as a contribution. East African Airways needs

funds: they have good machines, the regular run of big jets and so on, mostly paid for out of foreign aid. But since they have been Onort of cash there have been no replacements and no proper maintenance, and many of the planes are not very safe. In fact all seasoned travellers between East African airports know that it is wise to discover which pilots are flying before embarking. Most cavalier is 'The Cowboy,' an American pilot who doesn't believe in the silly business of prolonged take-off and landing, but likes to go up and down fast. Seasoned travellers were also probably unsurprised by the fact that the most recent plane crash at Addis Ababa was caused by someone leaving a ladder on the runway. Perhaps it is not entirely chauvinistic to prefer the thought of flying British.

Heroic ignorance

In a world of ever increasing professionalism and competitiveness, it is refreshing to hear of a man who has the amateur's approach. One would not, however expect to find such a man at the 'head of Thorn Electric, But according to a delightful rumour, just before the classic mile race, the 2000 Guineas, in which Sir Jules Thorn's High Top beat Roberto to first place, the happy owner was heard to ask a companion if he would mind telling him the distance the horses had to race that day. Skinflint has great sympathy for, and shares such sportsmanlike ignorance, on the part of one of the few real heroes of British industry.

Lazard's problems

Blue-blooded merchant bankers Lazards have had a very difficult week, which must have created despondency to rival the Rolls Royce days. A long shadow must have been cast by the tragic death of their former employee, Prince William of Gloucester. Added to this continuing comment on Lazards' unfortunate involvement in the P&O/Bovis deal, and the sad story of their client, Newell Machine Tool Co. Ltd. Lazards advised Newell shareholders not to accept a bid by Tube Investments, predicting that Newell prospects were excellent; whereupon Newell hit an all-time low. Let us hope Lazards don't feel that they have too.