His party hoped that Kenneth Clarke as Chancellor would deliver the elusive ‘feelgood factor’ that would somehow win them the election. When would it come through? ‘2 May 1997,’ he told them. He was right. The election was held and lost on 1 May, his successor got off to a flying start, and the factor stayed with him. It has seen him and his party through two more elections, while his opponents tried in vain to argue that all the good work had been done for him. Only now has his factotum, Ed Balls, been sent out to tell us that the man in the floppy hat and the scuffed suede shoes was a terrible Chancellor. Certainly, there was no feel-good factor in the wings when Chancellor Clarke took over. Eight months earlier, his predecessor — whose name ever since then has escaped me — had seen the pound shot to pieces in the marketplace, and his credibility with it. Confidence was shattered, and the public finances were in disarray. The new Chancellor put them top of his list. Nothing would come right, he thought, until they did. If that meant higher taxes, and a grip on public spending, and dismay on his back benches, and anguish from captains of industry, who told him that the economy would never recover — well, tough. This was itself a tough call, and it worked. The economy has never stopped recovering. His successor took the hint, and made much of his golden rules and his devotion to Prudence — but she, poor girl, has served her purpose, the rule has been rebased, the figures look ominous, and Kenneth Clarke as would-be leader warns us that the next Chancellor will have no room for quick tax cuts. Sounds familiar.
This Chancellor’s big moment came early, when he gave the Bank of England independence, and he could fairly say (Ed Balls said it for him) that if his predecessor ever thought of offering his congratulations on a bright idea, he let it pass. His own reform had been the Ken and Eddie Show. This popular monthly event brought Chancellor and Governor together, with ashtrays provided, to talk about interest rates — the Governor proposing, the Chancellor deciding. They could have sold tickets but, instead, they published the transcripts. For the first time, the decision-making process was transparent, and chancellors could no longer announce cuts in rates to please the party conference. From this, it was a logical step to a Monetary Policy Committee, accountable for its decisions and publishing its minutes — although when that happened, the Opposition took years to catch on.
Going off the euro
What Gordon Brown’s faithful factotum could not quite claim for his master may be his most significant achievement. He played for time over the euro until the idea of joining it ceased to be practical politics — and, indeed, the pound may yet outlive it. Who foresaw that this would let Kenneth Clarke back into the race for his party’s leadership? Twice, now, his fondness for the euro has proved fatal to his chances, but now that it has been taken off the menu, and the European constitution with it, he is spared the embarrassment of urging us to swallow them. To Central Banking, a quarterly review widely read by central bankers, he confided that he had gone off the euro. He had assumed that it would make Europe prosper. It hadn’t. To me, the euro was always his blind spot as Chancellor. He took Europe and its institutions for granted, and could not see what all this fuss was about. If this bothers him now, I am at his disposal.
Scoop for the solver
The winner in all this is Bill Clarke — no relation — who, in the palaeolithic era, was City editor of the Times and gave me a job there. Nowadays he applies himself to solving mysteries — the lost gold of the Tsars, the secret life of Wilkie Collins — and to publishing Central Banking. What about some interviews, he must have reflected, on the future of the euro? How about asking Ken Clarke? The result was another solved mystery — indeed, a scoop, followed at a respectful distance by every paper in what used to be Fleet Street, including the Times, which in his day was in Printing House Square. Today’s City editors can learn from him. They could always apply for a job.
Meet Gerry Right
Shareholders live in hope that Mr Right will come along. Look at Rentokil, which seemed to have the art of making money out of ratcatching. Then its pied piper in chief became president of the CBI — always a sell signal — and the art was lost. Won’t somebody restore it? Yes, says Sir Gerry Robinson in his persuasive Donegal brogue — I’m your man. Just make me executive chairman and give me some shares, and I’ll soon sort things out. How many shares? Oh, only enough to excite my attention. Say, £57 million worth. Think it over. One group of shareholders thinks that he would be cheap at the price. Others grumble that £57 million ought to buy them quite a lot of boardroom talent, even these days. Others need to ask whether Rentokil is susceptible to an expensive magic touch. Perhaps, after all, ratcatching was an over-rated business. Perhaps it had been going wrong for a while, and will not be put straight in a hurry. Some businesses are like that. Marks & Spencer is one. The temptation is always to believe in Mr Right, who will come up with a quick fix and be paid accordingly. Snivelling into their handkerchiefs, Rentokil’s shareholders may yearn for him, but it would be an act of faith, or gullibility, to call him Gerry.
The Bad Investment Guide warns us to be careful of crazes. Did poker come before sudoku? We are or were asked to believe that half the country is playing Texas Hold’em on computers with the other half, and that PartyGaming, which made this possible, would find its place among our hundred biggest companies. The shares came to market this summer, were chased up, ran into a warning of slower growth, and crumbled. Is the poker craze all it was cracked up to be? Cabbage Patch Dolls were a craze, too, and you could buy shares in them. Investors in PartyGaming should remember the poker-player’s maxim: if you look round the table and can’t spot the loser, it’s you.