POLITICS
Lord Weinstock: not the kind of businessman Mrs Thatcher prefers
PETER RIDDELL
Nearly 20 years ago Mrs Barbara Castle made her 'first encounter with a tycoon'. She and her late husband Ted dined with the then Mr Arnold Weinstock, managing director of GEC, at his Grosve- nor Square flat.
According to her breathless account (in The Castle Diaries, 1964-70), over the `excellent meal' Weinstock, 'a slim, dart- ing, voluble, youngish man with glasses', talked and talked. 'He was one of the 1964 converts to voting Labour because he thought the Labour Government would get things done. Now he was disappointed, not that he thought the Conservatives would have done any better. It was all talk.' After much more talk, Mrs Castle recalled 'altogether a mind-stretching evening, at the end of which we agreed that the key to good management was to find a genius and give him his head. Very simple really — if one can find the genius.'
Nothing illustrates how far attitudes in Whitehall have changed since those inno- cent days of Mintech than the way the Government was able to brush aside the protests of GEC in its pre-Christmas deci- sion to drop Nimrod and to pick the more expensive Awacs airborne early system produced by Boeing of the US. The decision was probably inevitable -- or rather inescapable — given the widely- aired preferences of the RAF ('our boys must have the best') and the miserable nine-year history of the Nimrod project. As usual there have been much mutual hand-wringing and calls for heads to roll. Everyone — apart from the taxpayer — is no doubt guilty. Therefore no one will take the blame.
Many of the mistakes on Nimrod were made a long time ago, since when, of course, those responsible have moved on. That eternal fall-guy of Thatcherism, and chairman of GEC, Mr James Prior argued during the absorbing three-hour Commons emergency debate on the issue that the company should have stopped work at least five years ago.
More striking than all these post- mortems is the way the decision sailed through the various ministerial committees with scarcely a murmur from the depart- ments of trade and industry and employ- ment. This is despite job losses of at least 1,500 at GEC, though admittedly many may be absorbed by the offset work promised by Boeing. It is, after all, only a year since the Cabinet trembled over a far less significant defence issue. The West- land affair was not repeated with Nimrod partly because of the memory of those earlier events, together with the ever- looming approach of a general election. There was also no Mr Michael Heseltine to rock the boat.
The Defence Secretary, Mr George Younger, and the party whips skilfully prepared the way, with the added bonus of Mr Prior's last-minute public complaints about unfair treatment. These made no difference to the decision but did help the whips rally backbench opinion behind the decision — leaving a forlorn Mr Prior to complain, 'The Government are a good deal better at giving stick than I ever was.'
The Westland affair did have a less noticed impact on the Nimrod decision, over its timing. Mr Prior claimed that nothing of substance about the relative merits of the two systems emerged after the Nimrod contract was renegotiated last March. On his view the Government should have cancelled the project then and gone for Awacs. But, as he acknowledged, last spring was a difficult time for the Government because it followed the West- land and BL (Rover) incidents and there was a lot of anti-Americanism. So the contract was kept on.
The comparative ease with which Nim- rod was dumped partly reflects the recov- ery of the Cabinet's self-confidence during the year — as always, most accurately measured by the state of the opinion polls. But it also reflects considerable criticism of GEC within Whitehall. Admittedly, Mr Younger — Gentleman George, the man to present any difficult case — predictably emphasised the sadness and reluctance with which the decision had been taken. But there was anything but sorrow among a number of officials and advisers to Mrs Thatcher. Their view was that, given the merits of the case, it was anyway time for GEC to be taught a lesson. The company had looked to the Government for too long as its main customer in a quasi- monopolistic relationship. Nimrod is only the latest, and most spectacular, stage in the growing mutual disenchantment between GEC and Whitehall. The company has failed to persuade the Government over the choice of nuclear reactors or over the privatisation of British Telecom, about which Lord Weinstock made many complaints during the House of Lords stages of the Telecom- munications Act three years ago. GEC has also had problems over High Speed Trains and the cost and efficiency of torpedoes.
It is also a matter of personalities. Lord Weinstock still has access at the highest levels in Whitehall, seeing Mrs Thatcher two days before the Nimrod announce- ment. But GEC, with its succession of Lord Carrington and Mr Prior as chairmen and Mrs Sara Morrison prominent on the board, smacks too much of the Heath era for current Downing Street tastes.
Moreover, Mrs Thatcher's preference is clearly not for the traditional captains of industry heading major companies. For instance, that home from home for knight- ed businessmen, the Confederation of Brit- ish Industry, has never been more out in the cold than it is now, despite its recent attacks on Labour's programme. The CBI is now a dignified rather than efficient part of the constitution, which has to be seen once or twice a year by the Prime Minister but is otherwise ignored.
Like all prime ministers, Mrs Thatcher has her favourite industrialists — who tend to be the more entrepreneurial types. In the public sector, the man currently most in fashion — with a track record to back it — is Mr Graham Day of Rover Group, at least until he asks for more public money. In her Financial Times interview six weeks ago the companies and businessmen she named were very much in that category not only Jaguar but also Carrington Viyel- la, Mr Peter Black who supplies Marks and Spencer and Sir Ralph Halpern of the Burton Group.
The Mr Arnold Weinstock of 20 years ago might also have rated a mention, even if his ennobled self of today does not. But I fancy that if Mrs Thatcher had attended that 1967 dinner party rather than Mrs Castle the conversation would have been less cosy. As GEC has discovered the painful way, businessmen should not put their trust in politicians or governments. That is not the least of the lessons since 1979 for which we should all be grateful.
Previous page
