CITY AND SUBURBAN
We love you, Rosy, we want to believe in you Miss Scenario returns by popular request
CHRISTOPHER FILDES
Here she is, ladies and gentlemen, back again by popular request, the one and only Rosy Scenario! Thrill to her charms as she unveils herself! Watch as the lovely contor- tionist achieves a perfect balance, in pos- tures never hitherto sustained! Just imagine — higher wages, lower taxes, money that pours into your pocket without effort, from your building society, from your savings account, from the National Grid! Cheaper money! Money pressed on you by your bank, which needs to lend to somebody, and instead of lending to big companies would rather lend to you at 50 times the margin! Money heading for the shops to keep the economy growing! High share prices to make you feel prosperous, and even house prices beginning to inch forward! All this, Rosy promises, without inflation — not a tremor, not a flicker. For her next act, which is impossible, Miss Scenario will win the general election. . . . More astonishing still is to see, buying tickets, a respectable old lady from Threadneedle Street. Perhaps she has got Rosy muddled up with Des O'Connor or the Chippendales, or Peter Pan. Does he believe in low inflation? Yes! She claps her hands! It will fall below two and a half per cent, she asserts, and stay in line for two years, just as it says in the script. Of course the poor old thing had an upset- ting experience last year, when she was taken to the theatre and refused to clap. The high wire act wasn't safe, so she said, loudly and repeatedly. When it passed off without incident, she put it down to luck and relapsed into grumbling, but she is not going to make that mistake again. She would rather make a new one.
Money leaks out
IF I HAVE my doubts about the Rosy Sce- nario show, that is partly because I have seen it before. An earlier version was sup- posed to give us lower interest rates, cheap- er mortgages and lower inflation, to deliver a sense of well-being in time for an earlier election. That was when we joined the European exchange rate mechanism. The euphoria lasted for about a day. Then poor Rosy tottered and tumbled, suffering painful bruises on the lower back. This time I cannot see how all that extra money can flow into the shops without prices getting wet. At NatWest Markets, Geoffrey Dicks and David Hillier make the point: Tor two years, the consumer has stood in the way of higher inflation.' His obduracy has held prices down. The supermarkets have plenty of space and their suppliers have plenty of stock, but what they need is consumers with plenty of money. Rosy means to put that right for them. There is, in .fact, plenty of money about, if you count it. The supply has been growing rapidly. It has found its way into the big investors' pockets and serves to finance a succession of huge deals, so no wonder our shares are so pleasingly high. Another name for this phenomenon is asset price inflation. We had some experi- ence of that when the assets were houses, and learned how inflation leaks out of our assets and into our pockets. Enjoy the prospect of Rosy Scenario's unveiling, but do not suspend your disbelief. The tease can be more fun than the strip.
No Hampelbury code
SO LONG as the chairman of Imperial Chemical Industries does not change his name to Hampelbury, everything will be all right. After Cadbury and Greenbury, the last thing we need in British boardrooms is another code, and with a bit of luck Sir Ronald Hampel will not write one. That will disappoint only the sponsors who set him up with a committee to take the heroic work forward. Sir Richard Greenbury's hasty effort had his team assembling at dawn so that the members could get off to their breakfast meetings. Sir Ronald will take his time (two years will do) and start from the assumption that directors are there to increase the interests of their shareholders. David Morgan of M&G has written to the chairmen of the companies his group invests in, reminding them of that. It is harder, as he implies, if they have to spend all their time going through hoops, and impossible if they confuse compliance with directiom. Sir Christopher Hogg has warned that codes can reduce corporate governance to a process-plant activity. They are not holy writ, says Sir John Banham people like him write them. Directors still owe shareholders their judgment. In two years' time I imagine that Sir Ronald will say much the same.
My learned friend
I ASKED my friend Niggler QC about the head of his profession, Sir Nicholas Lyell. Niggler went off at a tangent: did I remem- ber Dr David Owen's time as Foreign Sec- retary? He was said to have explained the Middle East to King Hussein of Jordan. After a while the King turned to his entourage, asking: 'Tell me, anybody, what's he like as a doctor?' Well, then, I said, what was the Attorney-General like as a lawyer? `A very, very nice chap.' This week Sir Nicholas has been explaining to us that his honour has not been impugned. I dare say, but that would not get him far in front of the Court of Appeal. From that forbidding bench, the black-robed figure of Scott LJ peers down at him: 'Your understanding of the law appears to us to be defective. We also observe that you gave an undertaking to convey the reservations of the witness Heseltine to the learned judge in the court below, but that you neglected to do this. Whether by accident or design, it matters not. We suppose that you meant well.' The attorney winces, and in the corner of the court, his instructing solicitor mentally crosses his name off the list. Nice chaps are two a penny but a brief in the Court of Appeal is expensive.
Murder on the 22nd floor
THE COMMONS Treasury committee should not judge John Kemp-Welch, the Stock Exchange's chairman, by his pin- striped suit. He is one of those Wykehamists — Lord Whitelaw is another —whose knack is to go through life successfully disguised as an Etonian. The committee grilled him about the knifing of Michael Lawrence, the chief executive he had inherited, and got answers which were courteous rather than instructive. My man on the Tower's 22nd floor has been using his little grey cells, and says that this case is the City's version of Murder on the Orient Express. Everybody had a motive. So they all did it.
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