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Diary Note /0026
Wednesday 20 February 2002
for yesterday's thoughts

for earlier Notes, follow Diary Note Archive (left)

with acknowledgment to the Daily Telegraph , for comment see right

But first - 

Tony & Lakshmi 

Tony Blair is trying to do too much. That 23 July 2001 Lakshmi Mittal letter, backing the Indian tycoon’s £300m bid for the Romanian steel industry, was yet another minor error of judgment on his part. I bet it was all a matter of time. Insufficient time. How long did Tony Blair get to think about that signature, in the aftermath of the General Election? Not more than a minute, I bet. Literally, sixty seconds. Perhaps even less.

Peter Kilfoyle reasonably says “Someone in No 10 must be held responsible for the impression that the publication of the letter had created”. He is right. I blame the draftsman, myself, and Tony’s frenetic timetable. And that timetable itself signals the excessive concentration of political power. That’s where the Kilfoyle culprits are to be found.

The worst feature of the letter, for me, was the naïve use of the phrase a British company. The PM was set up to gush - “I am particularly pleased to say that it is a British company which is your partner”. The Tories in Parliament waxed apoplectic about using the magic term “British” to describe an offshore Dutch Antilles company privately-owned by an Indian citizen.

That is not my objection. Mine is sheer astonishment that there is a naïve draftsman in the Foreign Office or No 10 (for both were consulted, and it now said that the draft came straight from the UK Ambassador to Bucharest, the colourful Richard Ralph) who thinks that any company can be seriously assigned national characteristics. The draftsman should be rooted out and sacked, or assigned to menial duties, even if he is the Ambassador.

For there can be no such thing as a British, or French, or German or “American” company. Companies have no passports, no nationality. They are like an odourless vapour, wills-of-th-wisp. Companies are merely artificial persons, mere abstract robots (abdroids, I call them) which brainlessly move at the beck and call of manipulative natural persons, in this case Lakshmi Mittal. A company has no emotions, no loyalties, no relationships, no morals. Anyway, I understand that it was Lakshmi Mittal personally, not anypart of his labyrinthine company empire, who gave Labour £125,000.

This episode touches my personal experience quite closely. In the mid-1970s I served the Labour Government as its Industrial Adviser on Construction, working as a full-time salaried Under-Secretary at the Department of the Environment [ 1974/76 see Biog ], and advising the Civil Service (not Ministers direct, which practice was far less common, those days). During the 1970s the Middle East construction market was rapidly expanding, as the Gulf States started to spend their increased oil incomes. And it was part of my job (the DoE was the “sponsor” of the construction industry) to provide support and assistance for UK construction firms bidding for Middle Eastern contracts. Letters of recommendation sprinkled like confetti from our pens for Ministers to sign, in support of Taylor Woodrow, Costains, Bovis, Wimpey, Laings - you name it, we backed it. The Civil Service negotiated contractbonds to suit every occasion, with the Export Credit Guarantee Department. Every competing international firm submitted sackfuls of supportive letters from their respective Governments. The Blair letter simply continues the same tradition.

The difference is that, since the 1970s, business has moved into global networks of bewildering complexity. As the bewildered Mr Nastase (the Romanian Prime minister, no relation) commented
"Some considered our partner LNM somewhat ineffable, dwelling somewhere in the Caribbean isles and with a PO Box as headquarters. Therefore I welcome the British confirmation that the LNM Group is an extremely reliable partner, setting off a sound economic endeavour".
Really? Was Tony Blair really saying that? I don't think so.

And that's the saddest part of this whole sad episode. The Blair letter was indeed accepted by an inexperienced Romanian Government as a trade reference, confirming the solidity of an insubstantial PO-Box-based Dutch Antilles company. It can only have been a mistake for the PM to have given such an impression, and we must hope that the misrepresentation has no significant adverse consequences for Romania. I hope that I would not have made such a mistake, in 1976. And since '76, the problems have become far more intractable - because the whole corporate world has changed so much. It has moved offshore, finessed national jurisdictions, embraced cyberspace, legitimised systematic tax evasion, developed new skills in regulatory evasion and commercial obfuscation (in the manner of Enron). It occupies a nasty and dangerous place.

Tony Blair should give himself longer to think about such letters, before he signs them. Better still, he should not sign them himself at all: give the job to Jack Straw or Stephen Byers, or even Gordon Brown. That's my advice.

Selling Access

The Lakshmi saga triggers a second personal recollection, far more recent and more relevant. In late 1996 I took the initiative to form, with five colleagues from the Labour Finance & Industry Group, Common Campaign Limited a company to be dedicated to raising funds for Labour, within the business community. We wanted to "do our bit for the War effort" to evict the Tories, and we all thought we could use our business contacts to raise modest funds for that purpose. There was a real groundswell of concern, in our business circles, about Major's failing Tory Government, and we all felt we could make a useful contribution. I became Managing Director of Common Campaign, and we looked forward to the campaign.

Immediately, I was invited to a meeting at the offices of one of the pro-Labour parliamentary lobbying-firms to meet others engaged upon the same task, including senior representatives of the Labour Party. At 61, I stood out among the Twenty-Somethings and Thirty-Somethings in attendance. I soon found myself disconcerted by their discussion of raising funds by arranging meetings with Shadow Ministers: that seemed to be the primary mode of fund-raising envisaged. "You must be very careful," I said in stern parental mode - "because you surely cannot be seen to seen to be charging for access to Shadow Ministers!" All faces turned to me in astonishment. "What do you mean?" was the response - "Access is all we have to sell!" They ignored me and carried on their discussion. I left.

Our fund-raising project got nowhere, stopped in its tracks.

I was never invited to the group again.

Ni cheir da o hir gysgu

For the benighted majority without even a nodding acquaintance with the language of heaven, perhaps I should translate. The headline means No good comes of long sleep . In Welsh, of course.

Most proverbs reverberate throughout Europe, popping up in several different languages. Stitches in time save nine, early birds catch worms, birds in hand are preferred - in many different European languages. But it is only in Welsh (not French, not German, not Russian) that I have ever found the proposition that No good comes from long sleep. Yet that is precisely what was reported this week to the American Association for the Advancement of Science {see "Too much sleep can kill you", Daily Telegraph) This survey, with 1.1 million participants, was the first large-scale six-year study to take into consideration variables such as age, diet, exercise, health problems and risk factors such as smoking. You are at greater risk of early death, the study says, if you find yourself sleeping more than 8 hours a day, or less than 4. The study average turnedout to be6.5 hours.

Good to know that Welsh traditional medicine got it right first time.

Awful Bureaucratic Mistakes II

The MoD's withholding of full disability pensions from old soldiers from WW2 onwards, on a sloppy and mistaken view of tax law, marks a dark moment in Civil Service history [ Check out Centralised Incompetence ]

But the sequel is even more appalling. It now transpires that the same mistake was made from 1919 onwards in an unbroken 83-year saga of negligence and incompetence. We should all learn from this, and entrust as little as possible to the fragile and suspect machinery of central government. In every province, every city region and neighbourhood, we should start learning to govern ourselves.

Back to Top 		  >> NEW IDEAS for new democratic institutions - Advocates, Trustees and Questors Check out Special Supplement

Safe Haven, Scotland

Fox-hunting is not important, in Scotland. There are just ten working hunts, all in the Borders, adjoining England. Highlanders and Lowlanders alike can unite in a common righteous frenzy about fox-hunting, without discomforting themselves or their friends and neighbours in any way. 'Tis sad that Scotland's bright new Parliament should be preoccupied with such trivialities [ Check The Guardian Scotland bans fox-hunting ] My hope that that the UK Parliament will not devote valuable legislating time to such a peripheral exercise.

Let me, however, spell out two important constitutional lessons to be learnt from the Scots' recent ban on fox-hunting.

First the Government of Scotland Act lists all those subject-sectors where legislative power is reserved by Westminster (Defence, police, the economy, social security and the welfare state) and declares that where no such express reservation is made, the Scottish Parliament is free to legislate for Scotland. No mention was made of fox-hunting, therefore it was OK to legislate. For Wales, the reverse is true: the statutory List works in the opposite direction. The Welsh Assembly can only legislate if the power to do so is specifically listed under the Government of Wales Act . The Welsh Assembly has no unconstrained residual power to legislate, as has the Scottish Parliament.

I consider the Scottish constitutional formula to be profoundly unwise. It is divisive: every time the residual power is exercised, it will generate conflict with the rest of the UK. All the pressures will push Scotland closer and closer to secession, in the long-term. That is what has happened with the fox-hunting legislation, if you read the Letters columns. The Welsh formula is far more satisfactory, and constitutionally more robust.

But there is a second lesson to be learnt from this episode. It is that the Scots manage to pass perfectly satisfactory legislation, using their own Parliamentary staff, and without a revising Chamber . Horrors! Did you realise? Edinburgh has no equivalent of the House of Lords! At Westminster, we are told that Parliament could not function without the vital "revising function" of the Lords, carefully scrutinising the waywardness of a negligent Commons. How can the Scots possibly function on a single-chamber basis? Perfectly well, thank you.

The truth is that Blair got this right, for Scotland. No Legislature really needs a revising chamber. Unicameral government is simple, readable, straightforward, sensible and economical, as in the Scottish model. Labour at Westminster should learn the lesson, and abolish the Lords completely [ Check out Lords Must Go! ]

Autocracy, Secrecy, and
the Abuse of Rights

These are the key failings of the company laws which govern international business life. The network of legislation is fundamentally flawed, and the problems will not be resolved without fundamental reform.

Corporate lobbyists are already trying to confuse the Enron issues by focusing public attention of trivial side issues. The Auditors are being set up as fall-guys - but they are also-rans, small-fry. They must not be allowed to take the rap for the Big Fish. The Senate Commerce Committee, investigating the collapse of Enron, is similarly being diverted into trivialities. Even my hero Sherron Watkins (she must be of Welsh origin, surely, with a name like Watkins) focuses on trivialities, personal identities, shredding machines, E-mails ignored. O dear o dear o dear.

I beg you not to be misled by these diversions. Take another look at my earlier comments Taming the Corporations >> Enron: Missing the point >> How to trim the Fat Cats' claws

The drive to curb corporate power is the great political challenge for to the Left, throughout the world. And it is a battle that can be won. But not by following the company spin-doctors down a myriad cul-de-sacs: we must go straight for the jugular.

We must confront the Triple Crown of corporate power - autocracy, secrecy, and the abuse of rights. And that means drafting a new international company statute, and negotiating for its adoption throughout the leading trading nations. The process will take at least ten years, it will be a very long haul. But Labour should make a start.

Nobody else will do the job.

The Enterprising Young

I'm ecstatic! It seems that my Government may at last have grasped the importance of commercial acculturation, in the promotion of new business enterprise. Our teenagers should learn the ways of business as a way of life . It is rumoured that £86m will be devoted to the UK-wide promotion of Young Enterprise , when the 2002 Comprehensive Spending Review is announced, later this year.

Young Enterprise came into my life in 1980, when I was working as Director of the Swansea Centre for Trade & Industry, in the 1980s. The movement is a UK imitation of the very successful Young Achievers movement in the United States. Young Achievers was in turn an imitation of the US Young Farmers movement (4H), which had pioneered the idea that the children of farming families should always be given a small part of the farm enterprise to run themselves, as its own profit centre. They should be assigned a pig, or a cow, or the chickens, or the geese, meeting the costs and receiving the attributable income, so that they understand what is involved in taking personal responsibility for a trading enterprise.

With other forms of business enterprise, it has never been quite as simple. But the same principle has been successfully applied, and it would be marvellous if the Government were to support its extension throughout the UK. In 1980/81, I eventually succeeded in getting Young Enterprise accepted within the Swansea city region, and at the peak of the movement there were 26 YE companies operating around Swansea. Twenty-four of them were school-based, and two free-standing. Each had 12/18 members, running their own micro-businesses - buying and selling, making and wiring, sewing and knitting, cutting and glueing, printing and drawing, selling, exhibiting and delivering. Hundreds of teenagers had their first experience of business through Young Enterprise. YE is an educational charity, producing the explanatory and educational material which provides a framework for this marvellous process.

There are certain pitfalls. The teaching profession still regards business with disdain, as being unsuitable for able children. One of my keenest recruits in 198O suffered agonies because, as Head Boy of a great comprehensive school and Oxbridge "material", his parents and his Headteacher intervened to force him to withdraw from Young Enterprise. I pleaded my own experience: as a Cambridge First (in History and Economics), I have always found business to be the most challenging, widest and intellectually most demanding of assignments, certainly no less demanding than practice at the Bar. But I was unsuccessful. He was forced to withdraw, in Autumn 1980. I wonder what has happened to him?

The UK practice of locating YE companies within schools has its own hazards. In the USA, they insist that Young Achievers is organised quite separately from the school system, as an independent extra-curricular activity, like 4H. Early in its UK development, Young Enterprise was forced to make common cause with Education Authorities, and that alliance has remained in place. It is however not unproblematical, and I would favour using Government funding to establish an independent movement. Business innvotaion and management are not to be seen as "just another career option", and I fear the influence of the teaching profession in diminishing their importance.

Finally, Young Enterprise should remain, in the UK, a charitable project. Secretary of State for Industry Patricia Hewitt is reported as saying that participants should be allowed to "keep the profits" themselves, rather than donating them (as at present) to local charities. She is wrong. Properly understood, business is not about any narrow personal profit motive, any more than is the profession of doctor or teacher or candlestick maker. Profitability is of course an essential prerequisite of business success, for the project - but does not go to personal motive. Most successful businessmen are motivated by quite other concerns - cultural integration, social status, personal recognition, personal fulfilment, parental expectations, the discharge of a family destiny, all powerful driving forces.

Trading skills are vital, and should be much more widely developed. But we should then encourage our children to deploy those skills throughout society - in government and in the voluntary sector, not just in conventional commercial trading. Our children should not be taught that personal profit, and the pursuit of greed, is an acceptable or desirable personal motive. Leave that to the movies..

The Politics of History

As a History graduate, nothing delights me more than the growing success of history on TV. I welcome the decision by Channel 4 to retain Dr David Starkey for a full 25-hours of history programming over four years [ See Daily Telegraph ].

But history can be taken too far. We must learn to keep it in perspective. Above all, old "historical" claims to territory continue to do enormous damage, in the Balkans, the Middle East, Northern Ireland. And this week brought another reminder of the ravages of history. In Morocco, the descendants of Muslims expelled from Spain protested, and demanded a formal apology. 270,000 Muslims were expelled from Spain, without compensation.

When was that? In 1502. Five hundred years ago, this month. One descendant Mohamed Azzuz said "We are like the Palestinians who keep the keys to their houses, for their return. Our expulsion was a disaster, a form of ethnic cleansing perpetrated by the Spanish". Now that could prove a very ticklish problem indeed..

What do you think? Drop me a line.

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