CITY AND SUBURBAN
The rule-book says that Downing Street's difficulty is the big spenders' opportunity
CHRISTOPHER FILDES
Before the Great Parliamentarian came to power, five years ago, there was a rule of thumb about Cabinet government. This said that the Prime Minister and Chancellor were natural allies — or rather, that everyone else round the table was the Chancellor's natural enemy. All those Secretaries of State for Paperclips or Drainage or whatever had one thing in common: theirs were spending departments. Political success, for them, depended on their success in wheedling money out of the Treasury. Their departments were, of course, special cases, and a government that starved them could expect appalling headlines about bent paperclips and overflowing drains. With hard-luck stories like these, they could take on the Chancellor — but if that meant taking on the Prime Minister, too, they might as well rough out their letters of resignation. Cabinet government has not quite worked like that under the Great Parliamentarian, perhaps because he pays almost as much attention to it as he does to Parliament. Public spending has gone up by a third in five years and the public revenues have risen even faster. Now the revenues are slowing down, the plan is for spending to accelerate, and are the lucky beneficiaries content? Not a bit of it. They must have more. How surprising that isn't. Now the alliance de convenance in Downing Street, always a tense relationship, is audibly creaking. The partners are at odds again about the euro and the public services. Their difficulty is the spenders' opportunity. History teaches that this is bad news for the public finances, the Chancellor and, later on. the Prime Minister, but [dare say that the Great Parliamentarian has changed the rules of history.
Wilberforce Mark II
WILBERFORCE is back — not the Downing Street cat, but his namesake, the judge. In his day, whenever a strike, real or threatened, began to embarrass the government, the cry would go up: 'Send for Wilberforce.' Then he in his judicial way would conduct an impartial inquiry and put forward recommendations with a delicate flavour of fudge. The cat outlasted him at Number 10, hanging on until the Blairs moved in, but the judge has been remodelled as Sir George Bain, polymath of industrial relations, who at the government's request is conducting an independent review of the fire services. All
parties, so the Financial Times breathlessly tells us, await his report, to be published on Monday week: 'The employers regard the inquiry as crucial leverage for securing concessions from the government.' Hang on a moment: the employers? The chaps who have to meet the wage bills? Don't they want concessions from the firemen? Well, not in the same way. The employers live in town halls and draw 80 per cent of their revenue from central government, so their hope must always be to please their electors by getting and spending more money. Why would public spending threaten to bubble over? Just ask Wilberforce.
Banker bet
I ENJOY watching good horses win races, especially if they have my money on them, so I could cheer Mervyn King home in the Threadneedle Street Stakes. He must have a favourite's chance, so I said when reviewing the runners and riders nine months ago. My principal worry was that Governors of the Bank of England are appointed by the Queen on the advice of the Prime Minister, who might take his duties too literally and look for someone who was more obviously on-message, most of all about the euro. Just now, though, it is hard to see when Europe's single currency could pass the tests (however many there might be) for joining the pound.
Fairy gold
AUSTRALIAN Mutual Provident is going the way of the Holy Roman Empire, as a triple-barrelled misnomer. First of all it stopped being a mutual society, and acquired shareholders. Then, armed with their money, it set out for the mother country on a shopping spree, and paid a great price for the Pearl. It has now learned the hard way how much capital the life assurance business can consume when things go wrong. This week brought another round of sackings and shrinkages. Anxious policyholders must wonder whether the life offices would be in so much trouble if they had not parted with so many billions of pounds at the behest of the Compensation Fairy. Buyers of personal pension plans had to be given a free bet. If they got a bargain, they could keep it, and if not, they would be compensated for `mis-selling'. The same free bet is now being handed out to buyers of endowment mortgages, though the soaring price of their houses must surely make up for any shortfall in their arrangements for paying the mortgages off. Moral: the Fairy has no money of her own. She has to use other people's. Guess whose?
BPermafrost
ON the Arctic tundra stands Lord Browne of BP, who keeps on being voted Britain's most impressive businessman. Beneath his feet there lurk great reservoirs of oil, but an impermeable barrier lies between them: the permafrost, or, as he would say, the middle management. This was the answer he gave to a House of Commons committee which wanted to know why BP kept missing its forecasts. New corporate technology would now enable him to get through the permafrost and closer to the action. To senior managers, middle managers make natural scapegoats. Boards sometimes contemplate cutting out whole layers of them. This is not calculated to cheer them on in their work. Perhaps Lord Browne has grown too used to a regular diet of plaudits, but a better answer would have been 'We messed it up' or even 'My mistake.'
Angelo maestoso
THE campaign to save the Savoy Grill for the nation, or at least for the City, is gaining momentum. Angelo Maresca, the Grill's revered maitre d', was Carol Leonard's guest of honour at the Christmas party thrown by Leonard Hull, her firm of headhunters. Dealmakers from Sir Michael Richardson sideways, horrified by the Savoy management's idea that their canteen should be closed down and gussied up, rallied round with offers of support, moral and financial. All that they ask of him is promotion, from a table in the middle of the room to one of the banquettes.
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