Bunhill: Dragon's tale of excesses in Wales

Click to follow
The Independent Online
AT THIS time of year, every columnist recommends holiday reading matter - light novels and racy biographies suitable for beach consumption. In the non- fiction department, I can heartily commend Welsh Development Agency Accounts 1991-92, by the House of Commons public accounts committee ( pounds 17 from HMSO).

It's not an enticing title, I admit. But, for a parliamentary document, it's a lively page- turner complete with model girls, private detectives, a conman, blustering public servants, flights on Concorde, pay-offs galore, and above all money, money, money. All of it taxpayers', a lot of it heading in unorthodox directions.

You may recall how the committee criticised the agency, set up to attract inward investment to Wales, for lack of financial controls and accountability. Among the questionable activities were hiring a convicted fraudster as marketing director, payments to model agencies and unnecessary redundancy payments.

As in the best stories, some mysteries are never fully resolved in the 81-page report - why, for example, the agency spent pounds 39,542 on private dicks over three years. Or precisely what services were rendered by the Shapes Model Agency in return for pounds 3,330 from the taxpayer.

Other Commons committees have thrown light on the shadowy area of how much City professionals charge for their time. The social security committee's investigation into the Maxwell insolvency, for example, showed the average charged by accountants from Price Waterhouse as pounds 120 an hour, while lawyers from Norton Rose opted for a judicious pounds 191 an hour.

The WDA report shows how merchant bankers can match the bean counters and solicitors pound for pound. Barclays de Zoete Wedd was secretly hired in 1989 to advise on the possible privatisation of the WDA. Its charging agreement with the agency runs as follows:

pounds per day

Directors 1,920

Assistant directors 1,400

Senior managers 1,120

Managers 960

Executives 800

These prices naturally exclude expenses and VAT. BZW also demanded underwriting commission if the agency came to be privatised, or a success fee.

BZW assures me that graduate recruits must have two or three years' experience before they can be hired out as executives at pounds 800. 'They're usually at least 25.'

SIR NORMAN FOWLER is on his hols until the beginning of September. I'm surprised he has the time. Not only is he chairman of the Conservative Party (famous for losing safe seats) and a director of Group 4 Securitas (ditto, dangerous prisoners), he has also accumulated several other jobs.

He gets more than pounds 10,000 a year as a director of National Freight Corporation and another pounds 25,000 for chairing Midland Independent Newspapers, which publishes the Birmingham Post.

Then there are his constituency duties as MP for Sutton Coldfield (pay: pounds 30,854) and as Privy Counsellor. He also, as Private Eye pointed out last week, receives pounds 25,000 a year as a non-executive director of Bardon Group, the quarrying company, and has been favoured with share options.

The 87,000 options are unlikely to do him much good quite yet. They can be exercised at 114p and the Bardon share price is languishing at the 50p mark.

What Lord Gnome does not point out in Private Eye is that by having options at all, Sir Norman is breaking rules on boardroom conduct laid down by Sir Adrian Cadbury's committee on corporate governance. Cadbury says that in order to safeguard their independent position, non-execs should not participate in share option schemes.

Peter Tom, Bardon's chief executive, says he is well aware of the Cadbury report and stresses that the options were issued three years ago. It is no longer policy to give share options to non- executives, he says.

NICE TO SEE that Michael Julien is back in the saddle, largely recovered from the mysterious virus that laid him low last year. The former Storehouse chief was appointed last week to chair Owners Abroad, the tour operator.

Like most of corporate Britain, Julien is not actually in the country at present. I eventually track him down to his remote 18th century farmhouse in the Loire Valley, where he has spent much of the past year.

'I'm adequately recovered to be a non-executive chairman,' he says. 'But the medical advice is that I shouldn't go back to being the old Julien of working 15 hours a day.' He expects the new job to take three days a week, falling to two or less once he appoints a group chief executive.

He refuses my invitation to respond in kind to Sir Terence Conran, who last month, in the adjacent column to this one, described hiring Julien at Storehouse as 'my biggest mistake'.

'It's always been a great sadness to me that we did fall out, and I'm sorry he still feels so bad about it,' says Julien. 'As far as I'm concerned, it's all in the past.'

But bygones aren't entirely bygones. 'I'm told', Julien confides, 'that if anything I was too patient with him.'

WHILE THE CHANCELLOR takes his vacation on the Continent, I can only hope his advisers are following the excellent suggestions sent in by Bunhill readers for nuisance taxes - levies that would both discourage irritants and fill the Treasury's empty coffers.

This week's bottle of bubbly goes to Richard Foxcroft of Stevenage, Herts, who writes: 'Who hasn't at this time of year been irritated or had their whole weekend ruined by the curse of the lawnmower? It is no longer the gentle push and whirr and pleasant aroma of freshly cut grass, but the roar of petrol mowers and strimmers shattering the peace and quiet of countless gardens and polluting the atmosphere.'

He calculates the Exchequer could rake in pounds 1.1bn by charging pounds 20 for an annual strimmer licence, pounds 40 for petrol mowers under 5HP, and pounds 100 for larger models and tractor mowers.

'The message is LEAVE THE HAY, OR PAY,' he says, perhaps spurred into writing by a particularly cacophonous Sunday morning. But the lawns of leafy Stevenage can still be cropped. 'Hand mowers, shears, sheep and goats would be exempt.'

(Photograph omitted)