Risk assessment is the mantra of our time. You cannot organise a girls’ school hockey match without having to assess the risk that the combatants will bark their knuckles. The baskets of flowers that used to hang outside the Ring of Bells pub in Norton Fitzwarren have been assessed as a risk to passers-by who, if they were more than eight feet tall, might have to step into the road or bump their heads. Trustees of charities and pension funds must assess their risks or take the consequences. Much good all this did for us on the day when City and suburban life developed a new kind of hazard: the risk of being blown up on the way to work. The markets had to assess it and, in their own way, they did. They stumbled but picked themselves up, and by this week they were moving ahead. No doubt they were telling us that risks like these had been priced in. We learned in New York that financial markets were themselves in the line of fire, and then in Madrid that lines of transport were soft targets. Any assessment of risks would have pointed to London, and must have concluded that London could cope. I wish that I could find myself so sanguine.
Just in time
We have been reminded once more that the foundations of our prosperity are fragile. For decades now we have seen the world’s trade grow, as goods and services, money and people have been able to move freely and easily. Technology has made it possible for communication to span frontiers and to make distance irrelevant. The world has moved closer to a ‘just in time’ economy, efficient in itself but vulnerable to disruption. From all this, Britain has stood to gain more than most, as a nation open to trade and as the home of an international financial marketplace whose growth, in these years, has been prodigious. We would be foolish to assume that life will always be so helpful. We can guess, now, that freedom of movement has its price. We have seen that the technology of communication can be turned against us. Mobile telephones — how quickly we have come to take them for granted — are part of the terrorist’s armoury. It would be something if these attacks could teach us to distinguish between risks that are real and risks that are flights of fancy or have been devised to keep the health and safety industry in business, at the expense of every other industry. At least markets must try to assess reward, as well as risk.
King and I
Being on The Spectator’s board with Lord King was like sitting next to a rumbling volcano. You had to be aware that his deafness could be tactical. In his heyday at British Airways, no one could have been in any doubt. ‘King Air’ bore his stamp. An inspired choice of Margaret Thatcher’s, he picked up a floundering subsidised airline, turned it into a business, and ran it — sometimes on the aircraft steps at Heathrow, sometimes by telephone from the back of his hunter. He was a good friend of The Spec, and served as a director for many years and for no fee except a good dinner (bought by Algy Cluff, the chairman) once a quarter. Now he has gone, and no one quite like him remains on the business scene. Today’s British boardrooms are duller, and more codified, and more expensive.
Hat-rack for a moose
If it had not been obvious ten days ago, it is certainly obvious now: London needs the 2012 Olympic Games as much as a moose needs a hat-rack. They will be a distraction, at best, from its continuing attempts to earn its own and other people’s living. The point had been made for us, well in advance, by Lord Coe, the Games’ promoter. The dealing factories in Canary Wharf, he said, would have to adjust their hours of work, so as to make room on the Docklands Light Railway for spectators on their way to the new stadium in the Hackney Marshes. Just now this stadium is, of course, a gleam in its designers’ eye, and the same could be said of the estimates for the whole seven-year run-up, 17-day binge and subsequent hangover. The general rule for builders’ estimates is that they represent half as much, in terms of time and money, as the project turns out to require. Of all these reckonings, the one most certain to overrun must be the figure of £200 million put down against security.
Delays and cancellations
Willing to look on the bright side, my fellow travellers argue that money will now, at long last, be spent on London’s infrastructure. So it will, but not in ways that will help them, or not unless they live at New Cross Gate and can take the revamped East London Line to work at Dalston Junction. It is already too late to build the lines that would make a difference. Crossrail (east–west) and the misleadingly named Thameslink 2000 (north–south) can neither of them be ready by 2012, and will therefore slip even further down the tables of punctuality and probability, and Canary Wharf will still be where it is now: that is, 25 stations (and one change) on the Underground from its principal international airport. If only the promoters had heeded the wise words of Baron Coubertin, translated and updated: with the Olympic Games, what counts is not to win but to finish second.
The retiring type
Sir Peter Middleton, the City’s greatest master of retirer pour mieux sauter, is at it again. So far, he has retired as permanent secretary to the Treasury, as chairman of BZW and as chairman of Barclays, with parties of increasing splendour marking each retirement. These days he is chairman of Camelot, which runs the National Lottery and will need to be at full stretch from now until 2012 and beyond. In his spare time he chairs the British Bankers Association and must try to keep his former Treasury colleagues off his former banking colleagues’ backs. Now he has found one or two days a week in his diary to be chairman of Marsh. This is the London end of the world’s biggest insurance broker, now under fire from Eliot Spitzer, the pistol-packing attorney general of New York State. Sir Peter’s arrival signifies that his end of Marsh is bullet-proof, or very soon will be. I note that the Treasury now has a vacancy in his old job. Could he do it on Fridays? An example to us all.