S P ECT THE AT OR
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THE CASE FOR LIQUIDATION
The year of 1993 was a terrible one for institutions. From the monarchy to the Milk Marketing Board, from the Church of England to the Football Association, the pillars of established order and familiar custom have been shaken. In every sphere they have been under attack: Lloyd's of London, the BBC, the Crown Prosecution Service, British Rail and the British Com- monwealth to name a few more.
It is more than mere coincidence that so many institutions, all at the same time, should stand accused of being outdated, irrelevant or ineffectual. In some measure, it seems to reflect disgruntlement and self- doubt provoked by a period of weak leader- ship and relative impoverishment, immedi- ately following one of apparent strength and wealth.
It would be wrong to describe all these institutions as fragile. However profound their underlying difficulties, they are remarkably resilient or, at least, their sup- porters are remarkably stubborn. Institu- tions are rarely short of defenders who draw their strength from casual opponents in the press and elsewhere. But what insti- tutions lack is the equivalent of an old fami- ly friend, a man in black, a figure of sympa- thetic authority who can ask the ultimate question and pronounce that enough is enough.
Not a single recent example comes to mind in which the officials of some promi- nent public body have voluntarily acknowl- edged that institutional brain death has occurred, that the only dignified course of action is to switch off the machine.
By striving officiously to keep such crea- tures alive, or turning a blind eye to the all too difficult question of helping them to expire, we succeed only in confusing those which are moribund with those which may be going through a bad patch but are still fundamentally sound. There is no need to add to the forest of newsprint already con- sumed on the subject of the frailty or other- wise of the institution of monarchy, except to say that in Britain it clearly falls into the second category: it has survived all sorts of crises in the past, but it remains the most dignified, colourful and historically satisfy- ing solution to the constitutional need for a head of state. Lloyd's of London, the troubled insur- ance market, is a perfect example from a different sphere. No matter how inter- minable the losses of the external 'names', how Byzantine the misdemeanours of the insiders who have contributed to the deba- cle, there is still a substantial body of opin- ion which says that Lloyd's is a fine old institution which must keep its pecker up and carry on at all costs. To suggest to any- one within a mile of Lime Street that what Lloyd's really ought to do is to close itself down is to invite a tirade of defensive senti- ment and pomposity.
But closure is a solution. In importance and authority, Lloyd's is an enfeebled shad ow of its former self. Its founding principle that of the unlimited liability of its under writing members, has brought disaster to thousands of people who thought they were on to a good thing. In the pass-the-parcel world of reinsurance, its commitments could readily be sold off. The death of Lloyd's in its present form is far from unthinkable — and for institutions there can, after all, be life after death. The Cor- poration of Lloyd's could, for example, reconstitute itself like those other (now cer- emonial and charitable) survivors of a past City age, the livery companies — the Fish- mongers, Glaziers, Mercers et a/.
But who could perform this delicate task across the spectrum of our tottering institu- tions? Perhaps a wise adjudicator would suffice — someone like the late Sir Ken- neth Cork, the great insolvency practitioner and quondam Lord Mayor of London. Here he is in Charles Gordon's The Cedar Story, on the night of 19 December 1973, when the imminent collapse of a fringe bank called Cedar Holdings threatened havoc in the City. The scene, ideal for all such inquisitions, is the basement of the Bank of England:
The parlour steward opened the door and a , man who none of the executive directors had ever seen before, entered.
'Who are you?' barked Michael Morrison managing director of Cedar.
'I am Kenneth Cork of Cork Gully.'
'Oh no!' gasped Michael. If he had seen Ban- quo's ghost he could not have been more ter- . rified. Kenneth Cork, Cork Gully. Bankrupt- cy. It was staring him in the face. But this was no apparition. It was the notorious liquidator himself.
In that same subterranean chamber, our appointed Man in Black could hold court on the last day of each year. Among those thronging along the corridor and out into Threadneedle Street this Friday, queuing for a hearing behind Mr Rowland of Lloyd's, Mr John Birt of the BBC and Sir 'Bert' Millichip of the FA, would be the Lord Chief Justice and the Director of Pub- lic Prosecutions, the entire European Com- mission and General Synod, the musical department of the Arts Council accompa- nied by the judges of the Turner Prize, and a group of confused aristocrats with ear- trumpets and little red flags who turn out to be the stewards of the Jockey Club.
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