Here we are at the moment of truth, if such a term can be applied to a French referendum. Last time round, the result was swung by boxes of Oui votes flown in from France’s ex-colonies. This time la France outre-mer has been deluged with money from Brussels. (Where does Brussels get the money? Where do you suppose?) In London, the City’s spread-betters have been making the result too close to call. The best we can say is that, when the photo-finish is developed, France may actually have voted Europe’s new constitution down and dispatched it to the mortuary. From Whitehall comes a warning, faithfully relayed in the Financial Times, that saying Non would overshadow Britain’s presidency of the European Union. That should rally the marginal voters, if anything can. Short of that, a Non vote could always be explained away as tactical, or as proof of Kenneth Clarke’s law: in a referendum, you ask people what they think about bimetallism, and they say ‘Throw the rascals out.’ Meanwhile the euro is awaiting the result with visible anxiety. The constitution was meant to be part of the glue that would hold Europe’s single currency together. Another adhesive was the Stability and Growth Pact, but that has now melted away, conveniently for Italy, which to nobody’s surprise turns out to have been in breach of the pact’s rules for years. With no pact and no constitution behind it, the euro would be uncomfortably dependent on faith and political will. My advice to the French is unchanged — votez Non, votez souvent — and when the Dutch vote, four days later, their course will be equally clear. Stem Nee, stem vaak!
Working from home
A thoughtful letter reaches me from the Royal Institute of Chartered Surveyors: Dear Mr Fildes, It’s 2007 and business has never been better — that is, if I’ve taken RICS’s course and become a home inspector. By then, nobody will be allowed to sell a house without me. It must come with an information pack, with a report from a licensed inspector, who needs a diploma, and there will be 7,500 of these people — and, says RICS, you can be one of them! Well, thanks. I could use the money. I might charge as much as £1,000, or more for a report on a house in Millionaires’ Row. Of course, most people who buy and sell houses are not millionaires, and if they wanted a report they could always commission one, but in two years’ time they will have no choice, as RICS tells me. This make-work law, purporting to help home-buyers, will put a dead-weight cost on the price of houses. Q: What is a chartered surveyor? A: An estate agent on his best behaviour.
A dog’s breakfast
While his colleagues in government make things more difficult, Gordon Brown is reaching out to help the first-time buyer. Well, that’s what he told David Frost over breakfast. He wants the mortgage-lenders to invest in their customers’ houses, putting up money that the government would match. A riffle through the sums suggests that this could only work if the government’s contribution (ours) amounted to a subsidy. This would, of course, underpin the price of houses, which is exactly what the first-time buyer does not want. The market is now becalmed, with buyers holding back. Their best hope for a bargain may well be a flat, sold off the drawing-board to some punter who has put down a deposit in the hopes of a quick turn. If his bet miscarries, he may cut and run. It has happened before. What first-time buyers need is lower prices — if only ministers could see it, or would school themselves not to get in the way.
Greed is back
Philip Augar is the merchant banker who wrote an obituary for his colleagues, called The Death of Gentlemanly Capitalism. Now he believes that there is life after death, so long as the capitalists are not....Well, his new book is called The Greed Merchants (Allen Lane, £20), so you get his drift. He argues that the big New York investment banks have cornered the world’s business, No one can challenge them, which is why they can reward their shareholders sufficiently and their performers richly. Morgan Stanley, he says, stands out as an example of a well-managed intricate business. Unlucky. It now looks more like a free fight at a Siamese cat show. I cannot believe that these banks are invulnerable. Mighty as they are, they stand exposed to the problems of running any business staffed with prima donnas, to inherent conflicts of interest, to the temptation to cut corners and, in queasy financial markets, to the danger that some swashbuckler will buckle when he should have swashed, and bring the house down. They might even find themselves with clients who prefer to deal with gentlemen.
Abuse of process
The war against terror throws up unexpected casualties. Soon after 9/11, we signed a treaty which would make it easier for American prosecutors to scoop up suspects here and extradite them for eventual trial there. Their word, in such cases, is our courts’ command. This process is now being used against British subjects when no link to terror is even alleged.The prosecutors want to scoop up Ian Norris, who used to work for Morgan Crucible and may be charged with price-fixing. They are tightening their grip on three bankers who used to work for NatWest and may be charged with defrauding it. This week Charles Clarke, the Home Secretary, waved their extradition through. Observe that this law is a one-way street. No comparable powers exist for scooping up American bankers for eventual trial here. Ministers say, as they always do say when abridging civil liberties, that the innocent have nothing to fear. The use and abuse of arbitrary powers is something we must all fear.
That sinking feeling
A case study for my Bad Investment Guide is Regal Petroleum. Last month this company raised £45 million to drill for oil in Greece. Last week it drew a blank. Now the boardroom’s revolving door is whirring, the director of exploration who was picked on Thursday changed his mind on Tuesday, and the shareholders who put up the money have lost three quarters of it, so far. A stock market proverb teaches us that many a good mine has been spoilt by sinking a shaft. That goes for oil-wells, too.