CITY AND SUBURBAN
France has an optional crisis, so the Germans will have to make up their minds
CHRISTOPHER FILDES
Edouard Balladur knows the first rule of chairmanship: blame your predecessor while you have the chance. Becoming France's Prime Minister, he announced that he had inherited an economic crisis, and summoned all hands to the pumps. He is right, but the crisis is optional — as we found, when we had one very like it, a year ago. It comes of trying to keep up to the mark. The effort has pushed up French interest rates until they are nearly 10 per cent above the inflation rate — grotesquely high for a country on the brink of reces- sion. For the record, President Mitterrand says that the franc-mark parity is a condi- tion for preserving the European Monetary System — a widely held illusion, as Helmut Schlesinger, President of the Bundesbank, pointedly observed when he came to Guild- hall. In practice, M. Balladur and his col- leagues will be burning up the lines to Frankfurt and Bonn with one simple mes- sage: we can't go on like this, so are you going to cut your interest rates or are we going to cut our exchange rate? Since the Brits were knocked off the mark, their interest rates have come down by 4 per cent, to their advantage — but as for us, the Franc Fort is all very well, but we are in the Or Dur. So make your minds up.
Truth in deep water
THE Derbyshire lies 10,000 feet deep in the Pacific, and someone is at last going down to have a look at her. The biggest British ship ever lost at sea vanished 13 years ago with all hands and without a signal. A pub- lic inquiry found no explanation, beyond suggesting that the Derbyshire, all 169,000 tons of her, had been overwhelmed in a typhoon. The crew's dependents argued that whatever happened to her must have happened suddenly, that defects in design could have made her break in two, and that a sister ship, the Kowloon Bridge, had cracked up in the Atlantic and sunk. Now `certain parties connected with the vessel' are inviting tenders from companies which can deploy manned or remote-controlled cameras, at a depth of 3,250 metres above a flat plain of red clay. Somewhere on that submarine plain the Derbyshire will come into focus — in one piece? In two parts? The answer, like the ship, is overdue. The unnamed parties do not sound like widows and orphans to me — more like Lloyd's underwriters talking in muffled but distinc- tive tones through their pockets — but they have given their project a properly dramatic name: Operation Alpha Century.
Angels vs. cowboys
NOW that home loan rates are at their low- est for 15 years, this might be a good time to lock them in, by converting to a fixed- rate mortgage. Your friendly bankers (well, mine, anyhow) will arrange this. There is only one catch. They insist on selling you an endowment life assurance policy, to go with it. All the big banks now have their own life companies, which have not been going long enough to be judged on their record, but already make good profits. You can .see why, when an advantageous mortgage is used as a come-on, and perhaps a loss lead- er, for the life company. For everyone's sake, I hope that their customers do not rue the day they ever heard of an endowment policy. Millions of people have been sold them without knowing that they might have to contribute for more than ten years before they could expect to get their money back. Policies that lapse in their early years benefit no one but the insurers and their salesmen. This, and not brokers' commis- sions, is what should now concern the Office of Fair Trading — and as for the banks, they should be careful of the compa- ny they keep. If they are not on the side of the angels, they will find themselves on the side of the cowboys.
Jokers are trumps
THERE are few things that our fragile economy now needs less than a string of four-day weeks. Arthur Scargill could do no worse. Here they come, though, starting on Monday, with three more to follow before next month is out, and the force of the law behind them. Two are attached to Easter, one used to be attached to Whit Sunday, and one is an expression of socialist solidar- ity — much to the embarrassment of Con- servative ministers who would like to express something else but cannot think what. So they have asked to be told what to do with the May Day bank holiday (their eyes are on October) and the Institute of Directors sensibly asks them why we need bank holidays at all. It wants eight 'statuto- ry holidays' instead, with fixed dates, but with legislation to let companies and staff agree on other dates if these would suit them better. One more heave would get the IOD behind my plan for Joker holidays. People in employment would, on this plan, have the legal right eight times a year to play a Joker and take a day's holiday. Their employers, and in particular the banks, would be open for business as usual. The self-employed would, as now, not get paid unless they worked, but they would find that easier if the rest of the economy were not shut down for a day at a time by statute. Let me offer the IOD the use of my slogan: banks don't need holidays, people do.
Caviar to the taipan
THESE are miserable times at Barclays. The group is in the red, the dividend is down, and as I was saying before these unhappy events (`Bumping along the bot- tom of the first division, Barclays eyes the transfer list', February 27) the board is looking outside for a new chief executive. That does not encourage the others. Peter Wood, the finance director, has sought a happier home at Standard Chartered, and this week Barclays de Zoete Wedd says goodbye to Nicholas Sibley, its taipan in Hong Kong and viceroy in the Far East. If his extrovert style sometimes clashed with the High Street bank's culture, so much the worse for the culture. In Hong Kong last year, I joined him for lunch at the top of the Mandarin, where the menu includes a whole page of different kinds of caviar. With Barclays' straitened purse in mind, I looked for something more economical to order, and so, I observed, did my host. He summoned a waiter and asked if the chef could bake potatoes. This ruffled the Man- darin's smooth surface, but word came back that baked potatoes were indeed within the kitchen's scope. 'Good,' said Nicholas. `Bring me five, with some caviar in them.'
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