Light at the end of Stephen Byers's tunnel?
More like an approaching lawsuit
CHRISTOPHER IILDES
The man who is his own lawyer has a fool for a client, and that goes double for retired law lecturers from Newcastle Polytechnic. This one has advanced to even grander things at the Department for Transport, Local Government and the Regions, where he applied his legal knowledge to the work of shafting Railtrack. Look, Jo, here we are — it's in the Transport Act — special provisions for putting companies into administration — right, let's send for the chairman and give him the bad news, because everybody has it in for Railtrack, and as for the City, it can stew in its own juice. Wasn't that clever of Stephen Byers? Not really. It left Railtrack to be run by an insolvency practitioner, which was rather like putting the Fat Controller in charge of Arthur Andersen. It was a warning to private investors not to put up capital for public projects, as the Treasury did not need to be told. Worst of all for Mr Byers, it prompted the City to reach for its own lawyers, who were professionals. Company law, so they thought, would have something to say about the expropriation of shareholders. So would the judges. A formidable challenge was on its way to the courts until, this week, Mr Byers ducked it, coming up with an offer of public money to buy Railtrack out of administration and square the shareholders. Perhaps he wanted to clear the line for Network Rail, his new company limited by guarantee, with a 100-strong board representing all interests (there must be room for my railway correspondent, I.K. Gricer) which must somehow contrive to raise and service billions of capital without being conducted for profit. Or perhaps, late in the day, he took legal advice.
BreakRail
ANGLING for his place, I.K. Gricer has been munching his way round the system and reports serious discrepancies. On the East Coast Main Line, he reports, GNER upholds railway tradition by offering breakfast to all its passengers, serving it on good china and glass with the company's crest and presenting a suitable bill. Breakfast on Virgin's West Coast Main Line is for first-class passengers only, and the price is lumped into the fare, which is loaded, as they have to be. They get no refund when breakfast is cancelled owing to a signal failure in the Watford area. Some Great Western trains now boast travelling chefs, but it is no use asking them for Churchillian breakfasts of kedgeree. cold grouse and burgundy. They can run to a breakfast baguette, which, in first class, arrives on a plate. On the Southern Railway's Brighton Belle, the kippers were favoured by Laurence Olivier, but breakfast on the Southern now appears to be extinct. My correspondent expects an early initiative from Stephen Byers, complete with elastic statistics, rapid reversals, fortuitous funerals, travelling lawyers and (just what the railways need) another regulator, to be called Offbreak, or BreakRail.
All gone
EVEN at sixpence farthing, which is this week's price, Marconi's shares are no bargain. The message is that the business may or may not have a future but that the owners must move over and make way for the creditors. When it comes to destroying value, Marconi's board has made Equitable Life's look amateurish, which, of course, it was. Only a few years ago this was a conservative company called GEC with a mountain of money. To my list of corporate sell-signals (like Marconi's customised website) I now add another: beware of a finance director who fancies himself as a deal-maker.
Bid for a college
HAROLD MACMILLAN said that when he came to Oxford, most of his friends were in his own college, which was, of course, Balliol. Some might have drifted off to places like Magdalen or Christ Church: It was only later that I found out that there seemed to be quite a lot of other colleges.' Now Colin Lucas, who speaks with triple authority as Vice-Chancellor of Oxford, sometime Master of Balliol, and godfather to the editor of The Spectator, tells us that there arc 39 of them. One must be Pembroke, which has embarrassed him by falling for a sting and implying that a place might be found for a benefactor's protégé. Pembroke has always been skint, but does Oxford really need 39 different colleges, each with its own master, bursar and fundraiser, and costs to match? In a market economy, the strong would bid for the weak, Pembroke would give up the struggle and Balliol's neighbours could become dormitory suburbs. Dr Lucas can scarcely propose this, so I shall. Indeed, in a market economy, Oxford, like Harvard, would charge what the traffic could bear, and its money worries would be over but I do not need to tell Dr Lucas that.
Lego to let
MY prejudice against buying to let is confirmed by the National Westminster Bank. 'Buy a second property for income and growth', NatWest's magazine, Premier, urges its customers. Your investment can pay for itself, so a case study purports to show, and your bank is on standby to put up the mortgage. You will then have increased your gearing and your exposure to real estate, and, of course, to the vagaries of tenants. You may like to know that in overcrowded Japan, real estate prices have fallen for the eleventh consecutive year. Also promoted in Premier: special offers from Legoland. Quite.
Better and better
OH, good, another sure way to make money. First came the two self-proclaimed racehorse owners who wanted me to place bets for them. Now I am invited to join an exclusive club whose members are given investment advice about horses: We charge a membership fee, a monthly administration fee and 25 per cent of your profits — any losses are carried forward.' Just like Long Term Capital Management. How do we get on these mailing-lists? A happy reader in Sussex learns that he has won two cash prizes from two promoters, one in Vancouver, one somewhere near Wormwood Scrubs. All they need is his signature and a small payment to cover prompt settlement. He might have to send them a cheque on his bank or give them his credit-card details, but this would be a small price to pay — or, at least, we must hope so.
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