Any other business

Prediction, as Mervyn King once observed, is ‘a stab in the dark’. Who can say with confidence where the wholesale price of electricity will be in ten years’ time, let alone 45 years hence at the end of the contract struck by Energy Secretary Ed Davey with EDF of France for the building of the £16 billion Hinkley Point nuclear station? We can be pretty sure the price will be a lot higher than today’s and it’s not mad to think it might have doubled by 2023, which is the starting assumption of the EDF deal.

Some say it’s natural optimism that makes the Americans so different from the British, and some say it’s a lack of cynicism. Either way, our cousins over there have long had difficulty distinguishing fact from fiction, and are forever finding ways to make their public life look like the action movie that always ends well for the hero, or the TV series in which some of the good guys turn out to be bad but the really good guy lives to fight another season. The ultimate expression of this national naivety — for that’s surely what it is — occurred on 1 May 2003 when President George W.

Royal Mail delivers to 29 million UK addresses; last year it generated £9 billion of revenues, of which £324 million remained as profit before tax; and it is likely to be valued at £3 billion in its privatisation share sale, indicating a price-earnings ratio modestly below ten. Twitter — the microblogging phenomenon beloved of self-admiring celebs, but now so ubiquitous as a mode of communication that it is compulsory for British ambassadors abroad — has 200 million users and is expected to generate revenues of just £365 million this year, maybe twice that next year. Twitter says it’s profitable but has so far kept its accounts private, and is nevertheless likely to be valued at £6 billion-plus in its forthcoming flotation.

A big hello to the revived Trustee Savings Bank — the spin-off of 631 Lloyds branches that were going to be sold to the Co-operative Bank to fulfil EU conditions for the bailout of Lloyds after its catastrophic takeover of HBOS. The new entity starts life with 4.6 million personal and small-business customers, a clean balance sheet, no investment banking arm and no foreign skeletons in its cupboard. That all sounds promising, but those of us who have long argued for a break-up of mega-banks and a return to relationship-driven high-street finance will watch closely to see whether the new TSB’s slogan, ‘Welcome back to local banking’, turns out to be just that, or a real mantra for change.

Vodafone, which has just collected an £84 billion windfall from the sale of its 45 per cent stake in Verizon Wireless of the US, is either a hero or an anti-hero of British capitalism, according to taste. To me, the world’s second-largest mobile phone business is heroic because it achieved that position from a standing start just 30 years ago, when poker-playing Ernie Harrison, chief executive of a military radio manufacturer called Racal, bet everything he had on the future of mobile telephony.

The mega-rich are best housed behind high fences, on wooded estates patrolled by dogs; that way, they don’t have to annoy the rest of us. But I can see how irritating it must be, if you live in the crowded Ladbroke Grove area of west London, to have a neighbour like Reade Griffith, an American hedge-fund manager who has received planning permission for a vast basement extension to his house that will take many months to excavate.

My thanks to ‘AndyB’, the only reader who posted an online comment on my column last week. It was ‘Don’t you ever go on holiday?’ and the answer is yes I do, and here I am deep in the Dordogne, glass of rosé to hand, lunch on the terrace in prospect, scanning cyberspace for some fizzing ingredients to make an Any Other Business cocktail. Upbeat economic news from home, led by ‘CBI lifts growth forecast amid optimism’, merely adds to the mellowness of mood. As for local issues to raise the pulse, there isn’t even a decent ruckus to be had over shale gas, since François Hollande has barred all exploration of it beneath French soil.

The fracking debate has been brought to a new heat by David Cameron’s message to Home Counties nimbyists and eco-crusties that he wants ‘all parts of our nation’ to share the shale gas bounty, not just lucky northerners. But the argument is proceeding in almost total ignorance of how the controversial extraction technique works and how soon it’s likely to happen. So I asked one of Britain’s top energy executives this week whether shale is really the game-changer it’s fracked up to be. It certainly looks that way in the US, he said, because gas-based energy costs have been cut by two thirds, energy representing 10 per cent of all production costs.

By and large it was a good week for the big banks — underpinned by encouraging news from the wider economy, in which every little uptick brings a few more zombie borrowers back to the land of the living. Lloyds returned to profit, promised to start paying decent dividends again and declared itself oven-ready for return to the private sector, with the market anticipating an immediate sale to institutions of a first tranche of the taxpayers’ 39 per cent stake. HSBC reported varied performance around the world but still clocked up a fat result for the half-year — and asked the Vatican to close its account as part of a sweep against money laundering.

I’ve been in the pulpit again, this time to salute the centenary of the death of Charles Norris Gray, a formidable Victorian vicar of my Yorkshire town of Helmsley. Gray was a social activist with strong opinions on everything from sanitation to election candidates, and he did a great deal of good for his parish — so I’m not averse to the idea of churchmen intervening in worldly affairs, and I think Archbishop Justin Welby was right to highlight the parasitical nature of ‘payday lenders’ such as Wonga, even if he was subsequently embarrassed to discover that the Church of England was an indirect investor in it.

One of the best articles I ever commissioned as an editor was an account by James Doran of a road trip from the steps of the New York Stock Exchange to the back streets of Detroit in October 2008, at the nadir of the financial crisis. At his destination, Doran found a shocking vista of empty, vandalised factories, all once ‘bit-part players in the now dying auto industry… The desolation was so complete that it hardly seemed real.’ Five years on, the city of Detroit is bankrupt with $18 billion of debts, its population has shrunk to 700,000 from a peak of more than two million, leaving mostly the poor, black and unemployed behind, its public services have disintegrated, and the count of abandoned homes and buildings has risen to 78,000.

Marc Rich, the godfather of global commodity trading who died last week, ‘deserves credit as one of the greatest creators and sharers of wealth in business history’, wrote James Breiding in the Financial Times in a counterblast to obituarists who had painted the secretive Swiss-based billionaire and former fugitive from US justice as ‘a flamboyant, tax-evading crook’. Bill Clinton certainly saw the better angel in Rich’s nature, granting a presidential pardon for his embargo-busting dealings with Iran against all precedent and advice.

Sir Mervyn King was his own man to the end: professorial, downbeat, against the tide. At last week’s Mansion House dinner — as in his final vote in favour of more QE, on which his Monetary Policy Committee colleagues bade him farewell by defeating him six to three — he was still worrying about a potential reversal of the fragile recovery. Even as he packs his collection of Aston Villa programmes and MPC minutes into plastic crates, the prospect of collateral damage from another euro-storm will be furrowing his brow. So his last speech as Governor was short on jokes and long on warnings: about ‘unfinished business’ and lessons unlearned, about ‘the audacity of pessimism’ as an antidote to complacency.