Something was missing from Marks & Spencer’s shareholders’ meeting. It was the man from the Pru, standing up to propose a vote of thanks. This used to be one of the City’s most regular fixtures. Neither M&S nor the Prudential are quite the forces they were, but in those days the Pru was M&S’s biggest shareholder, and had been for years, and was happy. Now its place has been taken by Brandes, an American fund which looks for ‘active value’. Investors like the Pru and the pension funds no longer dominate the market in the way that they did. They have bought bonds and sold shares, at the instance of their regulators and in the supposed interest of safety. Their successors will be even more susceptible to a quick turn and a quick fix, and less inclined to let the dog see the rabbit, however much Stuart Rose, top dog at M&S, might wish it. This company, so he could fairly say, had been going wrong for years and will take time to put right, but he is as likely to do it as anyone else, and at least he is a retailer. (He took over from a consultant.) It would be easier for him if his board was less like a basket full of squabbling Pekes, and if Charles Wilson, his golden retriever, had not suddenly bolted off into the bushes. All the same, what this dog needs most is a good owner. Warren Buffett would do. When so many other investors think of the long-term as teatime, the sage of Omaha has prospered by buying good shares and keeping them. Just like the Pru in the old days.
Make it short
I was grateful to Edward Heath for his advice on how to speak to a Balliol audience. ‘Make it short,’ he told me. ‘Make it funny. Don’t try to teach them.’ That could be his style, too, but not on formal occasions, and his most vivid turn of phrase was thought to be a misprint. When he called Lonrho the unacceptable face of capitalism, he had apparently meant to say ‘facet’, but his typist dropped the ‘t’. Capitalism was not at its best in his reign as prime minister. The stock market peaked and then tumbled, and went on to lose two thirds of its value. Famous companies folded or were propped up to pursue a posthumous existence. Abroad and at home the pound’s value dwindled away. All of this had been a long time coming, even if some of his policies contrived to make it worse. Wiseacres told us that our economy was doomed to secular decline and that the only hope of salvation was to merge our fortunes with the dynamic economies of continental Europe. Edward Heath believed that this was our destiny. Nowadays it looks less manifest.
At least Europe’s cows can relax. Their subsidised incomes are safe for another decade, or so Margaret Beckett says, and she should know. The Prime Minister may have been provoked by Jacques Chirac into doubting whether French farmers represent good value for the British taxpayer, but his minister of agriculture (now relabelled Defra) went hurrying off to Brussels to tell everybody that the Common Agricultural Policy was safe. All that people were talking about, so she said, was the new financial perspective, beginning in 2014. That would certainly leave enough time for a fact-finding trip to New Zealand, where they could learn what happens when a policy like this is scrapped. It took some doing. New Zealand’s farmers had relied on their long-established British market until the 1970s, when we signed up for the CAP and told them to get lost. They were left with their own agricultural policy, complete with producer boards, marketing boards, support schemes and guarantees — quite like Europe’s, really, and in its own way just about as expensive. Every sheep derived a third of its income from the taxpayer.
In the end the sheep were made to stand on their own hooves. All the support schemes were phased out. The farmers had to adjust to a competitive world. They found new markets in Asia, and within a few years farm incomes were rising again. Farming turned out to be subject to the same economic laws — the law of supply and demand, for example — as every other kind of business. Perhaps Mrs Beckett will propose that, in nine years’ time, Europe should follow New Zealand’s example, or that Britain should show the way. I doubt it, though. Cows, stand easy.
Tilting at windmills
A cool breeze from the House of Lords, where two chancellors and a governor of the Bank of England, now ennobled, grace the select committee on economic affairs. Global warming is their topic of the moment, and they plainly think (though they are too polite to say so) that the figures used to frighten us are by-products of the windmill industry. They want the Treasury to get a grip on this arithmetic. They want to see costs and benefits properly measured. They suspect that the pronouncements of the Intergovernmental Panel on Climate Change (there’s a boondoggle for our times) are subjective and self-serving, and that the rules laid down in Kyoto were naive. Our own policy, they say, is based on dubious assumptions about renewable energy: windmills, in other words. Carry on tilting.
Splendid news from Michael Winner, the foodie and film-maker. He says that he intends to leave his house to the nation as a museum. I take this to be the house in Melbury Road, off Holland Park, which was built by Norman Shaw for Luke Fildes. There he painted ‘The Doctor’ for Mr Tate’s new gallery on the site of Millbank Prison: ‘A woefully out of the way place. Nobody will go.’ Here King Edward VII came to pose for his swaggering state portrait. He is standing on a flight of marble steps which are, in fact, linoleum, hurriedly purchased in Kensington High Street. Admire them in the National Portrait Gallery and note the painter’s tact in taking two inches off his sitter’s waist and adding them to his height. Not that the King was flattered: ‘Mr Fildes, to whom I am sitting for my portrait, is under the impression that I am a short, stout man.’ Mr Winner must not misunderstand me when I say that I am looking forward to the opening of the Fildes Museum. I may finish up there myself.