Bunhill: Poisoned chalice awaits the intrepid forecaster

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The Independent Online
FEVERED speculation grips the numerate classes as to whether the Government's new-look economic policy is going to necessitate a fresh set of faces among its advisers.

Word has it the Chancellor is already casting around for another special adviser to work alongside Bill Robinson (pay said to be a paltry pounds 50,000; but then public service is its own reward).

The idea would be to provide a contrasting, if not necessarily more enlightened, source of counsel and comfort. A monetarist, they say - someone who will be able to work out which (if any) monetary targets should be followed and what (if anything) they are indicating.

Tim Congdon, Gerrard & National's prickly economic guru and a man who has stuck with monetarism through thick and thin, is rumoured to be the preferred choice, but he is unlikely to be willing to quit his current comfortable eyrie and is adamant that he has not been offered anything.

The name of Professor Gordon Pepper, of City University's business school, also crops up with regularity. Pepper has the right sort of credentials - as former head of Greenwell Montagu he would give the markets some comfort - but he is also an aggressive proponent of such impolitic causes as an independent Bank of England and handing over monetary policy to a Fed- style open market committee.

Indeed, the likelihood of a reshuffle is the subject of much heated dispute. The existing team of Bill Robinson, Sir Terry Burns, Alan Budd and Sarah Hogg is arguably too closely associated with recent debacles.

The first three also cut their teeth at the London Business School, giving rise to complaints that government policy has been too dominated by one institution.

Yet few envisage mass departures, not least because potential replacements who have done any better at forecasting the current sorry state of the economy are few and far between.

Burns, as the man most closely associated with the failure of the Treasury model to predict the strength of the 1980s boom or the depths of the 1990s recession, is receiving the greatest flak. But as Permanent Secretary to the Treasury, Burns is a top mandarin and they are never sacked - merely sidelined. Budd, as chief economic adviser to the Treasury since last year, is too recent an appointee to carry the can, and as personal special advisers to the PM and the Chancellor respectively, Hogg and Robinson are not thought unlikely to go.

Nevertheless, potential nominees for this quartet of poisoned chalices include Congdon's fellow monetarist dissenter and member of the Liverpool Six, Patrick Minford - though he is widely held to be too prone to producing controversial wild cards like cutting benefits to encourage the unemployed back to work.

There are those who would prefer a safe pair of hands - a 'sound' academic like Charles Bean of the London School of Economics or even the venerable Professor Charles Goodhart of the same stable.

But the most talked about idea is a new body that would widen the traditional circle, in which case count on it including an obligatory industrialist, such as the CBI's Doug McWilliams or Dick Freeman of ICI.

THE recent dusting off of such nostalgic concepts as a 'wages freeze' and 'an industrial policy' is but one aspect of the current vogue for all things Sixties.

What next? Will desperate PMs (or their sidekicks) in search of a populist package be seen frantically perming any six from the following list?

Nationalisation/Social Contract/ National Enterprise Board/Temporary Employment Subsidy/Prices and Incomes Board/Regional Policy/Pay Comparability/Credit Controls/'The Pound in Your Pocket'/Investment Income Surcharge/Supertax.

SINCE Victorian times, pimply youths from Balliol College, Oxford, have been in the habit of composing 'Balliol rhymes' aimed at deflating the egos of their more self-important contemporaries.

The original such ditty concerned an undergraduate destined for a brilliant future, though with a reputation for pomposity:

My name is George Nathaniel Curzon

I am a most superior person,

My skin is pink, my hair is sleek,

I dine at Blenheim once a week.

More recently - 35 years ago, in fact - another such ditty ran:

My name is Rodney Leach, and when

I gaze upon my fellow men,

I look upon them from afar

And think what bloody men they are.

Last week, the said Rodney Leach, a former director of Rothschilds, was appointed to the board of Trafalgar House to represent Jardine Matheson. Trafalgar House has been warned.

YOU CAN tell how close Bill Clinton is to being the next President of the US from the behaviour of Washington's business community. A politically fashionable hairdressing salon not a million miles from Capitol Hill recently suffered a secret defection of its stylists, who went off to form a new establishment.

'Where will your customers come from?' a loyal client asked the excited crimpers. 'Well,' came the reply, 'we've called a lot of existing clients. But what we're really hoping for is a change of administration.'

As indeed are many others in Washington. When they can be torn away from such vital issues as the dismal state of house prices, the chattering classes are consumed by who will get which job if Clinton wins. A hot favourite for a plum, the Council of Economic Advisers, is Larry Summers.

The Harvard whiz-kid, who boasts two Nobel laureates in economics among his uncles, is chief economist at the World Bank and, as a battle-hardened veteran of the disastrous Dukakis campaign, a fully paid-up liberal Democrat. But his World Bank experience may be what really swings it.

The Clinton economic programme - buzz words are investing in 'people' and 'infrastructure projects' - is sounding increasingly like a World Bank rescue package for a desperate developing country.

Makes sense, I suppose. After all, life expectancy is shorter, and child mortality higher, in New York City than in Shanghai, a fifth of America's children live in poverty, and about a third of the population has little or no health cover.

LAST spotted heading towards Tibet was Sir Peter Holmes, Shell's peripatetic chairman. Tibet is often off-limits to foreigners, but the intrepid Sir Peter is (officially) there to poke around for oil. Doubtless he will have remembered to tuck his camera under the seismic maps, however. A keen photographer, Sir Peter already has two Shell-sponsored travelogues under his belt. Stand by for number three.

(Photograph omitted)