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Any other business

Any other business – Which is worse: theft, drug-dealing, profiting from falling shares or giving cash to Tories?

7 January 2012

3:00 PM

7 January 2012

3:00 PM

I thought editors came on a bit strong with  the ‘Jailbird Honours’ headlines in response to New Year gongs for ex drug-dealer Chris Preddie (OBE) and former HMP Ford inmate Gerald Ronson (CBE), the property tycoon who was convicted of theft and false accounting in the Guinness share-support scandal in 1990. But what was interesting about responses to the list was that by far the largest helping of hostility was aimed at the hedge fund manager Paul Ruddock — who was knighted for donating large sums to the V&A museum and other charities, but damned for making £100­million (for his firm, Lansdowne Partners) by betting on the fall of Northern Rock and other bank shares, and giving £500,000 to the Conservatives.

Well, I suppose everyone loves a reformed sinner, whereas Ruddock represents the archetypal hate figure of our times: the amoral financier whose vast personal wealth allows him painlessly to write cheques to good causes and political parties in a way that is somehow an affront to the rest of us. But it is worth remembering that Gerald Ronson was once an archetypal hate figure, too, as a ruthless 1980s wheeler-dealer who profited by breaching City rules. Ronson himself never accepted that he did anything dishonest in the Guinness deal but also never succeeded in having the conviction overturned, his final appeal to the House of Lords having failed in 2002.

Instead, he gradually won new respect by steering his property business through turbulent times, leading an exemplary Jewish family life, and quietly giving away many of his own millions. ‘Did I get a black eye, yes,’ he told Nick Kochan in an interview for The Spectator a couple of years ago. ‘Did I take it, yes; and did I come back better than anyone else in the Guinness case? Yes.’


‘Rich lists’ place both the Ronson and Ruddock fortunes in the £200 million-plus range. The difference between them, of course, is that Ronson was judged to have committed a crime. Nevertheless, as Kochan concluded, the burly 72-year-old property developer ‘is a remarkable example to today’s business generation of how to hold on to your name and fortune through extremes of adversity’ — whereas the youthful Ruddock just looks like the effortlessly lucky new-rich bloke every fundraiser wants to sit next to. The honours committee got it the wrong way round. They might have appeased the national sense of fairness if they had knighted Ronson and given Ruddock an OBE to match Chris Preddie’s.

My best customer

I must declare an interest. I was once Gerald Ronson’s bank manager, as was my father before me. In the early 1980s, as a very junior Barclays executive, I administered loans to Ronson’s master company, Heron Corporation. Some years before that, my father, as a very senior Barclays executive, spent a happy Saturday morning being driven around north London by the young Gerald in a Rolls-Royce, inspecting the chain of petrol stations which was the foundation of his empire. He always had a tough-guy persona — I recall a bone-crushing handshake — but bankers and some very high-profile private investors were always inclined to stick by him. He retains my own admiration, not least because all my other customers seem to have sunk without trace.

Fuel price foreboding

The eurozone crisis loomed so huge during the pre-Christmas period that most of us took our eyes off the inflationary impact of energy prices — I know I did, and it came as a shock to find the new year’s first fill-up of diesel costing 143.6 pence per litre, close to an all-time high. What with the deferral until August of a fuel duty hike previously scheduled for January, and faltering oil demand from western economies that are teetering on the double-dip brink, there was some hope that fuel prices might start to ease. But that’s not the way it’s looking — in part thanks to Iran’s Hogmanay missile fireworks in the Gulf, which reminded oil traders that the swivel-eyed zealots of Tehran control the Straits of Hormuz, through which one third of the world’s laden tankers must pass.

Oil prices now look far more likely to rise than fall, and I’m grateful to Liam Halligan in the Sunday Telegraph for a crystal-clear analysis of several reasons why: the insatiable energy appetite of China and other fast-growing Asian markets means ‘global oil demand keeps rising, whatever is happening in the West’, while Arab producers prefer crude to stay well above $100 a barrel because they are more concerned to buy off domestic unrest with higher spending at home than to ease the problems of their friends abroad by upping supply to massage the price downwards.

Brent Crude (the major determinant of UK fuel prices) in fact ended 2011 at $107, having been down in what used to be thought of as the normal range of $60-80 for much of 2009 and 2010. Until recently, leading analysts were predicting a fall in 2012: Citigroup said $86, Morgan Stanley said $95. But they have all now revised their forecasts upwards, and the consensus is $110-120,  with a possibility of $130-150 if Iran really kicks off. No doubt some of London’s finest hedge fund managers will fund their philanthropic largesse from the profits of betting that way — and using their market power to make it a self-fulfilling prophecy if there’s a chance of a short, sharp spike.

Meanwhile, reinforcing my own sense of New Year foreboding, the quarterly gas bill arrives with its own prediction attached — that I should expect to spend £2,250 keeping the house warm this year, compared with £2,139 in 2011 and despite a considerably milder winter weather forecast. So I’m bracing for 5 per cent inflation or worse in my personal fuel costs on top of this month’s 5 per cent rise in my East Coast rail fares. And speaking of milder weather, a howling rainstorm is battering my windows as I write. I wonder if I can trade the car for a small wind turbine.


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