Any other business

Has Mervyn lost touch with reality? No, but the City has lost its moral compass Mervyn King’s interview with Charles Moore in the Daily Telegraph, in which the governor of the Bank of England accused the financial sector of exploiting gullible customers, gambling with other people’s money, lacking a moral compass, paying themselves excessively and relying on taxpayer bailouts when it all goes wrong, elicited some strong reactions. One unnamed City figure said it was ‘not correct’ for the governor to make it quite so clear that ‘he doesn’t like bankers’; another called him ‘an embittered old man with no appreciation of reality’.

Freezing tyrants’ assets is easy, but how much will we send back to Tripoli? ‘Queen freezes Gaddafi family assets’ says a headline. That’ll teach the unhinged Libyan dictator to compare himself to our blessed monarch, as he did in one of his recent rants. But for all the spin about an emergency Privy Council meeting at Windsor Castle on Sunday (I’m imagining the Duke of Edinburgh popping in to say, ‘Do hurry up, dear, Top Gear’s started’), I’ll be interested to see just how much loot is eventually liberated from London accounts and returned to whoever forms a legitimate new government in Tripoli. Precedents are not encouraging. Our bankers remain more reluctant even than the Swiss to open suspect safe-deposit boxes.

More women in the boardroom? Never mind the equality, watch the performance Successful businesswomen may scoff at the proposal of quotas for women in boardrooms — and many men will dismiss it as Euro-correctness gone mad (see Matthew Lynn, page 17). But I suggest that anyone who hopes to collect a private pension should welcome the idea, for purely selfish reasons. A report by former trade minister Lord Davies of Abersoch this week was expected to call for ‘voluntary targets’ to bring the proportion of women directors of FTSE 350 companies up to one in four by 2015, compared to current ratios of one in eight for the top hundred companies and one in 13 for the next 250.

Another reason to cut bankers’ pay: the softer the product, the easier the job Is it harder to run a country or a global company? Variations of this dinner- party gambit cropped up wherever I went last week, offering a way of drawing together half a dozen business stories and political arguments. So here’s this week’s Any Other Business competition. Place the following in descending order of the difficulty of their jobs: David Cameron, George Osborne, Bob Dudley, Stephen Elop, Marius Kloppers, António Horta-Osório and Gerald Jones. Bob Dudley is the American who was recently promoted to chief executive of BP and is now dug in on the Russian front.

Privatising forests must be a sensible policy if so many celebs are against it The more passionate the outcry against the government’s plan to privatise its English forestry estate, the more I feel the urge to cash in my meagre investments and bid for one of the forests in question myself. For a start, any policy which attracts the opposition of Tracey Emin, Ken Livingstone and Dame Vivienne Westwood is likely, on close examination, to be entirely sensible. And a holding of woodland is, after all, the perfect answer to my twin concerns for the immediate future, expressed here last month, of inflation and social disorder.

Interim findings from my Really Independent Commission on banking reform The Warden of All Souls, Sir John Vickers, has revealed the outlines of what he thinks about banking reform, so perhaps the Warden of Any Other Business — that’s me — should do likewise. Vickers, a former Bank of England economist, is chairman of the Independent Commission on Banking, which will publish interim findings in April and conclusions in September. Its objective is to recommend ways to stabilise the banking system and make it more competitive, while reassuring savers that their money is safe without implicit or explicit government guarantee.

Rising petrol prices and the death of Nigel increase my sense of foreboding I returned from a New Year expedition to the Dordogne laden with wine, walnuts and a deep sense of foreboding — not provoked by the mood of rural France, which felt unchangingly placid, but by what I’ve been reading and hearing about Britain and the rest of the world. The fund manager Jonathan Ruffer convinced me some time ago that inflation would be the next big peril. With retail prices now rising three times faster than pay, petrol dearer by the day, and food and clothing following the upward spike of commodity markets, the monster is upon us.

A knighthood for the last banker who put his shareholders’ interests first The New Year honours list is always a vivid indicator of the times just gone by. No brand better encapsulated the feelgood consumer frenzy of the last decade than Lush, the purveyor of organic soaps and Fairtrade lotions alongside campaigns to save sharks and rainforests, whose name has (perhaps coincidentally, but it can’t have done sales any harm) become slang for something luxurious and desirable. Lush’s founding couple, Mark and Mo Constantine, collect an OBE apiece.

In the land of my Flemish forefathers, I draw a key lesson for 2011: always have a Plan B To Ghent, in the land of my ancestors, to address a conclave of ‘risk managers’. Though the mother tongue of most participants is Dutch or French, the conference is in English — and I feel obliged to explain that despite my surname that’s what I shall speak too, because it’s 200 years since my silkweaving Flemish forefathers moved from Antwerp to Norwich to take advantage of a tax scheme for migrant craftsmen that would no doubt now be banned by EU ‘single market’ rules.

From elections to ash clouds, 2010 was a year that taught us to expect the unexpected This was a year of predictable trends and unpredictable events. It was predictable that the UK would limp out of recession behind France, Germany and the US, and a reasonable bet both that we would avoid a double dip and that we would not avoid a burst of inflation. Observation of past cycles made it easy to predict that banks would return to profit while brutalising their customers and showing no remorse. Many economists had foreseen a crisis of the euro since the day it was dreamed up, because they did not believe a single currency could work without fiscal and political union: they were right, and despite successive bailouts, that crisis will gather momentum into 2011.

Why the Governor is in the soup — and how I got the soup into the Governor I’m no WikiLeaker, but I am prepared to reveal that I have, on two occasions, lunched à deux with Professor Mervyn King in his private dining room at the Bank of England. Not a single word of what he said will appear in this column or anywhere else. But I think it’s probably OK to tell you about the soup. As soon as this smoothly indeterminate vegetable concoction was served at our first encounter, the Governor filled his spoon, raised it halfway to his mouth, and embarked on a tour d’horizon to which, having been a notably slow student of economics long ago, I felt able only to reply ‘Mmm’.

What Ireland lacks now are statesmen who can make the case that recovery is possible The screen at Manchester airport tells me I’m about to board an Aer Lingus flight to Dublin, but there’s a Lufthansa plane at the gate. ‘Blimey,’ I mutter, ‘this bailout’s moving fast.’ I’m looking at the wrong gate, however, and it’s an Aer Lingus stewardess who becomes the first of many people during my 36-hour visit to wish me ‘the best of luck’. Luck looms large in the Irish psyche and it’s what they long for right now — an oil find would help, I hear one passenger remark — plus a bit less attention from world markets and media.

My tip for enterprise tsar from Cameron’s list of loads-of-money peers: Lord Fellowes of Downton Who, I wonder, will advise David Cameron on entrepreneurship now that Lord Young of Graffham has been fed to the sharks by the Downing Street crew for his unguarded remark that in this ‘so-called recession… most people have never had it so good’?