MY column in today's edition of The Mail on Sunday kicks off with a few disobliging remarks about the lobby pressing for a minimum price for alcohol. I will say a little more on this subject, but (perversely, maybe) at the end of this post. Much of the column looks at the currently-stalled global trade talks (stalled since 1999, in fact) and urges readers to ignore the oft-repeated plaints of politicians of all parties that the talks' current stagnation is a 'tragedy'. Far from it - the organisation that hosts the talks and referees existing trade deals (the World Trade Organisation) has ambitions to extend its reach 'behind the border' into areas such as competition and procurement policy, i.e. areas that having nothing to do with trade. Rather familiar to those of us inside the European Union for the last 40 years, don't you think? There was always going to be room for one really good book for the general reader about the WTO, and for my money it is last year's work by American journalist Paul Blustein entitled Misadventures of the Most Favoured Nations: Clashing egos, inflated ambitions, and the great shambles of the world trade system (published by Public Affairs). That Blustein (unlike me) seems generally pro-WTO mattered to me not a jot, the mark of a very good book. Away from all that, and away from economics as such, there were two ominous retreats by our new Prime Minister last week, the first on anonymity for rape-case defendants and that second on the vast National Health Service patient-record database inherited from Labour. The retreat on the first (yet to be confirmed) looks partial (defendants may stay anonymous until the trial) and on the second pretty much total. Does it matter? Think 1970, and imagine the Heath government referring a couple of tricky pay claims to some 'relativities panel', having initially vowed to stand firm. The rights and wrongs almost matter less than the possibility that such caving-in may become a habit. I long thought David Cameron's big fight would be with the New Class of social administrators whose numbers, budgets and power swelled so mightily in the Labour years. Two of the many and various articles of faith held by this New Class are (a) that those charged with rape are almost always guilty and (b) that the State is entitled to amass huge amounts of intimate data on the citizen and have it passed around thousands and thousands of public employees. To end where my column started, and the 'minimum price for alcohol'. This is ultimately a quasi-prohibitionist measure, because once such a minimum exists, Ministers will be under constant pressure to raise the unit price of alcohol, given that any rise in the amount consumed (or even the absence of any decrease) will be seen as a 'failure'. One may have hoped our retailers would have spotted this, and it was surprising to see Sir Terry Leahy of Tesco on May 21 volunteering to have 'discussions' with Ministers about a minimum price. It was especially disappointing for those of us who have been fans of Tesco since our teens, to the extent that teenage boys are fans of supermarkets in any sense. Back in the Seventies, there was always the occasional, very unpleasant yobbo with a skinhead haircut to 'explain' to us youngsters that Tesco was merely one part of a vast, international Jewish conspiracy. Winding up such pocket fascists was another excellent reason to use the chain. Funnily enough, I have just attempted to buy a basket-full of modest items at a central-London mini-Tesco in mid-evening and been told that I am required to use the 'self-service' tills. One young woman was trying to guide a large number of angry shoppers through this process. It was a sweltering night and I didn't envy her. The second time my till didn't work, I simply walked out. Sorry, but I shall not be returning. Many thanks for reading this and have a good weekend. The Gods that Failed: How the financial elite have gambled away our future, by Larry Elliott and Dan Atkinson, is published by Vintage (£7.99)k THIS may turn into the Year of the Mayfly, with short lived yet vivid careers in the public eye followed by disappearance from view. Former Treasury Chief Secretary David Laws set the pace, with a fortnight of high praise for his work in getting to grips with the deficit followed by abrupt resignation. For quite different reasons (no-one is suggesting any funny business with housing allowances) Prudential chief executive Tidjane Thiam is this morning under pressure to quit after the collapse of Pru's attempts to buy the Asian operations of US insurer AIG. As with Laws, Thiam has been in post for a brief period, during most of which he has attracted lavish praise. Maybe this is all nothing new, merely life in the media age of the 20th and 21st Centuries. And I am far from being the first person to note the oddity of talking about a 'meteoric career' - don't meteorites come down? Maybe Laws, Thiam and whoever is next for this treatment are merely living example ofLex Bowie-ensis, proving that 'we can be heroes' while confirming the corollary: 'Just for one day.' But there is one big difference between the two men (other than the fact that Thiam remains in office at the time of writing). Thiam, with his £25 billion 'game changing' bid that would make the Pru a 'global player' was essentially living in the decade-long economic dream sequence that preceded the credit crunch and the recession. Laws, with his Treasury axe, was the harbinger of a new, more realistic era. Two very quick postscripts to my column in today's edition of The Mail on Sunday. First, it is imperative that we do not allow ourselves to be talked into any kind of support package for the euro. That would only be to reinforce failure, especially as one or more Continental countries seem prepared to bid the single currency 'Adieu-ro'. Two, the departure last night of Treasury Chief Secretary David Laws is a great shame, but I am sure he will be back in some Government role one day. His resignation ought to mean little change in outlook - the Chief Secretary has been a sort of deputy Chancellor since 1977, when the then incumbent Joel Barnett was invited into the Cabinet alongside his boss Denis Healey. It was about that time that the notion emerged that the Chief Secretary should also be the main public-spending axeman. So, I guess, will he continue to be. Thanks for reading this and have a good Spring Bank Holiday The Gods that Failed: How the financial elite have gambled away our future, by Larry Elliott and Dan Atkinson, is published by Vintage (£7.99) GILT yields are down again this morning. Last week, the benchmark ten-year British government bond was yielding about 3.66 per cent, roughly the rate of inflation. That's another way of saying that investors would be getting a zero real return on their money. Earlier this week, they were down again, to 3.55 per cent. And this morning they dipped to 3.46 per cent. What this means is that the price of gilts is rising, as investors buy more of them, which means the yield - the return investors get from the fixed interest that gilts pay - is falling. Of course it is no secret why gilts are so popular. Said popularity has little to do with markets giving the thumbs-up to George Osborne and David Laws as the newly-minted no-nonsense Regan and Carter of fiscal enforcement, kicking down quango-crats' doors and shouting: 'You're nicked!' (or maybe 'You're sacked!'). Rather, even the IOUs of s debt-sodden British Government are a safe haven when compared to the car-crash of the euro-zone and the associated plunging prices of equities (the great rival investment to bonds). They used to say that if you left your money in a Swiss bank for long enough, the charges would eat it all up. This is the model we should follow. We provide the safe haven, but at a zero return. Indeed, a small charge may have to be levied on investors in return for our providing this fine service. British debt crisis? What British debt crisis? ONCE again, gilt yields are down this morning, which you can take either as a ringing endorsement of the George Osborne/David Laws cuts package or a continuing flight of capital from the euro-zone and its car crash currency. I suspect a hefty dose of the latter, especially in light of the bizarre behaviour of leading zone figures in recent days. First there was the suggestion from Brussels commissioner Michel Barnier that the answer to unflattering ratings for the likes of Greece from commercial credit ratings agencies was for the European Union to establish its own agency, which, presumably, would make nice about Greece's rubber kites. Maybe when the bathroom scales he bought from the local household goods shop tell Mr Barnier he is 12 stone, he makes his own scales which duly tell him he is actually nine stone. Then we had German chancellor Angela Merkel banning certain types of short selling to defend the euro. Here's an idea, Kanzler. Ban funerals - then no-one will die! Actually, Mrs Merkel is merely the latest to succumb to RVI Syndrome. RVI stands for Really Very Impressive, the ultimate accolade of the international elite for someone they previously underestimated Past victims include Ronald Reagan, who managed some useful achievements pre-RVI such as outspending the Soviet Union on defence. Post-RVI, the poor man was embroiled in the Iran-Contra scandal and the realisation that his government had borrowed a very large amount of money. His old buddy Mrs Thatcher was another victim. Pre-RVI she retrieved the Falkland Islands, secured our EU budget rebate and got us a replacement for the Polaris missile system. Post-RVI she presided over a runaway boom and was outmanoeuvred on Europe by weaselly colleagues. Finally, a genuinely impressive operator is Billy Hayes, head of the postal workers' union. As that idee fixe of the free-marketeers - the sale of the Post Office - rears its head again, My Hayes has been making the simple but deadly point that if the Royal Mail represents such supposedly clapped-out 19th Century technology, why are commercial outfits so desperate to get their hands on it? Actually, the biggest mistake was to turn the Post Office into a corporation at the end of the Sixties. Better by far to have stuck with the GPO as a Government department and a Postmaster General in the House of Commons running the show.
05 June 2010 11:45 PM
Sunday morning PS: from world trade to 'is Dave a caver?' - and more
02 June 2010 10:53 AM
Perils of a meteoric career
29 May 2010 11:48 PM
Euro? Adieu-ro!
26 May 2010 9:46 AM
Britain's debt crisis: we have the solution!
24 May 2010 11:10 AM
Gilts, the euro and the GPO (RIP)
Sunday, 6 June 2010
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