Martin Vander Weyer

I’m back, as Arnold Schwarzenegger famously declared in Terminator 3: Rise of the Machines. In fact I haven’t really been away, just hovering in cyberspace to leave room for other contributors in our slimmed-down-for-the-beach summer Business section. I’m back, as Arnold Schwarzenegger famously declared in Terminator 3: Rise of the Machines. In fact I haven’t really been away, just hovering in cyberspace to leave room for other contributors in our slimmed-down-for-the-beach summer Business section. While I’ve been up there, financial markets have begun to look like a Los Angeles freeway visited by an enemy android at the wheel of a runaway fire truck.

The £6 billion merger of Saga and the AA is a gift for cartoonists: a company whose ideal customer is Victor Meldrew with a broken fan-belt on the hard shoulder of the A22. To complete a brand conglomerate for grandads — and since all three are owned by private equity funds — why not bring in Boots the Chemist as well? But most of all, the deal is another gift for the GMB union, whose leaders Paul Kenny and Paul Maloney have led such a creative campaign to blacken the name of private equity that they ought to be preparing their acceptance speeches for next year’s Baftas. They have already ensured that the AA — which was acquired by Permira and CVC Capital in 2004 for £1.

At wet, chilly Garsington last night I saw a spectacular production of Ariadne auf Naxos. Strauss's wonderful finale was all the more uplifting for the triumph it represented on the part of cast and crew, all partially exposed to the elements, over prolonged downpours in the second half. Before, after and during the so-called picnic interval, I watched the elegant audience stagger through the muddy parking fields and across lethally slippery grass slopes, some discreetly wearing galoshes or wellies under evening dress, others resigned to ruining decent shoes and risking humiliating falls.

In his Economics Made Easy column in the magazine last week, Allister Heath pointed out that the Consumer Price Index (CPI), the debased European measure of inflation which Gordon Brown insists on using - stands at 2.8 per cent, while the more realistic Retail Price Index (RPI) is at 4.5 per cent and Allister's personal rate - according to the calculator thoughtfully provided on the Office for National Statistics website - is at around 6.6 per cent. The difference behind these figures is that the CPI is based on the prices of a basket of goods which includes fast food, supermarket clothing lines, and consumer electronic goods (all of which remain relatively cheap and some of which are still falling in price) and excludes housing costs including mortgages.

Shortly after the death of John Paul II in 2005, the wise and amiable Father Dominic Milroy, former prior of the Benedictine college in Rome, leant across a dinner table and said, ‘Martin, you’d make a good candidate for Pope.’ ‘But father,’ I protested, ‘I’m not even a Catholic.’ ‘Oh don’t worry,’ he responded, ‘We can soon see about that.’ Likewise I’m glad to discover that not holding a US passport does not rule me out as a candidate to succeed Paul Wolfowitz as president of the World Bank when he departs next month, so long as I’m prepared to convert: his predecessor, Australian-born James Wolfensohn, took American citizenship in order to secure nomination by Bill Clinton in 1995.

In my Any Other Business column in the magazine this week I warn that the overheating of the Shanghai stock market looks highly likely to lead to a local crash – swiftly followed by a wobble on major western markets. Though I'm not expecting the wobble to be a catastrophic one, I find myself moving towards the gloomier end of the spectrum of my usual don’t-panic-it’ll-be-all-right view of stock market behaviour. Two items in today’s Daily Telegraph reinforce this.

An interesting item by Tom Regan on the US National Public Radio blog points out that while our own Daily Telegraph and Guardian and Germany's Der Spiegel all focus heavily on the negative aspects of the World Bank investigators' report on Paul Wolfowitz's conduct, both the Washington Post and the New York Times take the opposite line, giving prominence to Wolfowitz's rebuttal of the accusation that he mishandled the issue of his girlfriend's promotion and pay rise. Clearly the facts of the story are becoming buried under waves of anti-Us and anti-neocon sentiment; but clearly also, Wolfowitz was a hugely provocative appointment at the Bank in the first place and has failed to win even the grudging respect of many of his senior colleagues and board members.

The Dow Jones Industrial Average of leading US stocks passed 13200 for the first time last week, after its strongest run (23 rises in 26 sessions) since 1955. The S&P 500, a broader indicator, stood at just over 1500, a fraction below the record high set in the final spurt of the dotcom boom. London’s FTSE-100 index, at 6600, is not far behind. Both markets are being driven by a fever of takeover activity and rumour in the ‘digital media’ sector, including talks between Microsoft and Yahoo and an approach to Reuters from the Thomson empire of Canada — all ominously reminiscent of the AOL-Time Warner deal, announced in January 2000, that was subsequently judged one of the most value-destroying mergers of all time.

If you have a long-lost Continental lover, you have a little under six months to arrange the perfect reunion under the clock at St Pancras on 14 November. That is the date when Eurostar will commence its new service along the full length of what is now called High Speed 1, the much-troubled fast link to the Channel Tunnel. Most importantly, it’s the day Eurostar trains will cease to arrive at Waterloo, and instead make their way from Ebbsfleet under the Thames and across east London to Stratford, and at last to the refurbished Victorian terminus on Euston Road.

The Business section of this week's Spectator includes a fascinating interview with Sir Michael Bishop, founder-boss of the airline BMI. The interview is, in two respects, an example of the kind of civility and discretion that many readers, having just heard or read the story of Lord Browne's sad downfall, may feel has disappeared from modern journalism. First, our interview was conducted a few days before BMI's formal annual profit announcement: Sir Michael could not give any hint of the actual profit figure (other than that it would demonstrate positive progress) and Judi could not press him to say more; it would have been a flagrant breach of corporate etiquette on both sides.

Spring sunshine encourages us all to browse estate agents’ windows. This week’s featured property, Dumfries House, looks at first glance like a rare example of value for money in an overheated market. This exquisite mid-18th-century mansion designed by Robert and John Adam comes with 1,940 acres — yet for the same price, £6.75 million, from the same agent, Savills, you could buy nothing more than a five-bedroomed townhouse with a 30ft garden in Pelham Crescent, South Kensington. There are, however, some drawbacks to Dumfries House, leaving aside the obvious one that it’s nowhere near Dumfries, so your removal van may never find it.

To Armoury House, headquarters of the Honourable Artillery Company, for lunch with the recruiting officer — not with a view to joining up, though the PT would do me good, but to inspect the morale of this ancient City institution and inquire how it is adjusting to the pressures of the modern world, military and financial. The HAC is both a serious territorial regiment, specialising in ‘surveillance and target acquisition’, and a rather good club with a beautiful cricket pitch — an oasis of the old City, walled in on three sides by anonymous new blocks.

By far the stickiest moment of my journalistic career was the time I interviewed a foul-tempered Michael Howard on his battlebus between Bristol and Cardiff during the 2004 European elections. But I’m sure I would have fared worse, much worse, if I had ever attempted to cross-question Gordon Brown. As it is, I’ve never even stood close to him: the only time he invited me to Downing Street — for a charity reception of which he was the nominal host — I accepted promptly, only to receive a photocopied letter telling me the event was oversubscribed and my invitation withdrawn. I’m sure this curt snub had nothing to do with Brown himself, but it seemed somehow in character.

Peter Hain says two thirds of City bonuses should be redirected to charity, or employers who dish them out should face tax penalties. David Cameron is trying to find a formula to suggest he disapproves of City greed while signalling that the City need fear no tax-grab from him. Those who find the disparity between bankers’ pay and everyone else’s morally repugnant, or at least uncomfortable, often also cast doubt on the ‘trickledown’ theory — that the wider economy benefits efficiently from the lavish spending of the lucky few. Such sceptics should consider the parable of the Chelsea nanny.

It is exactly 20 years next week since British Airways was privatised. Arguably, it was the most successful of all the Thatcher-era privatisations. Under the redoubtable Lord King and his marketing-wizard sidekick Colin (now also Lord) Marshall, a demoralised, loss-making state enterprise had been turned by five years of vigorous, not to say brutal, leadership into ‘the world’s favourite airline’. The share offer in February 1987 was 32 times oversubscribed, and almost 10 per cent of it was set aside for the airline’s staff, many of whom became proud owners of a stake in a business which seemed to have been miraculously transformed. But that was then, and this is now.