Christopher Fildes

Back from the grave and ready to party — that’s the London Stock Exchange

Back from the grave and ready to party — that’s the London Stock Exchange

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Asked what he did in the French Revolution, the Abbé Sieyes explained that he survived it. Against all the odds, this has been the London Stock Exchange’s achievement. It is still there. Its dreary old building looks better as a hole in the ground, but the Exchange has found itself a new perch in Paternoster Square, and remains an independent British entity. You could have bet against it. Not long ago its only choice seemed to be whether to surrender to the Germans or the French: ‘Levez les mains’ or ‘Hande hoch’? Not so long before that it agreed to join up with the Frankfurt exchange, Deutsche Börse, whose Swiss surpremo, Werner Seifert, would come in and run the merged business. This half-baked dish — I labelled it a horse-and-rabbit pie — was too much for the shareholders to swallow. They voted it down, the chief executive lost his job and the chairman did not last much longer. Since then the Exchange has recovered its corporate nerve. It has also been lucky. When Mr Seifert tried to prompt Deutsche Börse into bidding, his own shareholders revolted and he, too, was ousted. Euronext (Paris-based) never quite got so far. Both now find their own customers complaining to the European Commission that integration is another word for oligopoly. In London, the bidder of the month was Macquarie, an ambitious Australian conglomerate which operates a toll road in the English Midlands. The Exchange tried to laugh its advances out of court and, this week, succeeded — but, as the old Abbé knew, before you can relax, you need to be sure that the revolution is over.

The sole survivor

The Exchange can fairly claim that its own business is brisk. From far and near — from Russia, in droves — little-known companies are hurrying to bring their shares to market. From far and near, too, buyers are rushing forward for established British companies, now deemed to be for sale — at the right price, of course. Which isn’t? This seems to be open season. P&O has sailed away to Dubai, and an airborne Spanish armada is circling Heathrow and preparing to land. Other buyers are sharpening their pencils, for few companies are now too big to be beyond the range of private equity. It all helps to keep the City busy, but the Exchange must be losing its stock in trade, and that must be death to a business which lives by arranging for stocks to be traded. If the last remaining major British company still listed on the London Stock Exchange proves to be the Exchange itself, I am not sure that its independence will have been worth keeping.

Solution seeks problem

To every business problem, there is a McKinsey solution, and who better to carry it through than a chap from McKinsey? The Confederation of British Industry picked three of them in a row, and the third, Adair Turner, has gone back to consultancy on the grandest scale, collecting a peerage and telling us all what to do about pensions. I thought and said that his plans represented the wrong answer to the wrong question, but then, I am not a consultant. Now the CBI says that they would hurt businesses, raise costs, threaten jobs and do nothing in total for savings. (A businesslike Brummie took over the wheel there.) Another McKinsey chap, as chairman of the Stock Exchange, served up the notorious horse-and-rabbit pie. Another, who has gone on to great things, once put a McKinsey scheme up to Sir Arnold Hall, Hawker Siddeley’s cerebral chairman. Sir Arnold looked puzzled: ‘My dear chap’, he asked, ‘to what problem could this possibly be the solution?’ Well, perhaps to McKinsey’s.

The Competent People

It had to happen. The long arm of the European Commission, made even longer by the Health and Safety Executive, has stretched out to the Bluebell Railway and reached for the brakes. What the Bluebell now needs, says my railway correspondent, I.K. Gricer, is a Competent Person. Several, probably. As things stand, railways like the Bluebell — and there are 70 or more of them, puffing up and down the country — are overseen by Her Majesty’s Railway Inspectorate. Changes that might affect safety need the inspectors’ approval. These arrangements have worked well for most of the railway age, so now, of course, they are on their way out. The EU Rail Directive has prescribed a new regime and although this only applies to mainline railways, the health-and-safety folk have not missed the chance it offers. They have given ‘heritage’ railways a new sub-regime of their own. The inspectors’ work will be taken over by Competent People. No one yet knows who they are, but the railway has to find them, and if it fails, or picks Incompetent People, it may find itself in the scrapyard, or even the dock.

Send for GricervIn this hour of need, my correspondent is minded to offer his services. He will, of course, charge for them, and his professional indemnity insurers (if he can find any) will, of course, charge him. Between them, they will run up quite a bill. He will be careful to err on the cautious side, for that is the side on which his bread, and his insurers’ bread, is buttered. The safest railway of all will be one with no moving parts. He will say so. Railways like the Bluebell depend on goodwill and on volunteer labour, and their finances will range from the sound to the desperate. Some will fall foul of the new regime. Others will go out of business. They will not be mourned in Health-and-Safety House, whose inmates will assert that it all makes their case for more staff, wider powers and grander offices. (Only this week 21 of them had to be rescued when the roof fell in on a safety meeting.) They assume that their objectives are infinitely desirable, and that cost therefore does not come into it. That goes for wheelchair access, qualified ladder-holders and other good causes. In fact, though, health and safety are both of them relative, and cost always finds its way in. Day after day, some ambitious or well-meaning regulator finds another reason to pour sand into the machinery. It then becomes less efficient, more rigid, less able to adapt to its customers’ varying needs. The economy sputters and chokes. That can only be bad for our health and, in the end, for our safety. Just ask any competent person.