COMMENT: Another quiet exit from Threadneedle Street

Never apologise and rarely explain is a principle that has served rulers well in the course of time. Central bankers have always applied it liberally, for to admit a failing is to undermine authority. As Howard Davies arrived yesterday for his first day at the Bank of England as deputy governor, it emerged that Brian Quinn was likely to bow out quietly next February at the end of eight tough years as a director and a 15-year involvement with banking supervision.

You can bet that Mr Quinn will retire with full honours, as befits a senior member of the Bank's court. Supervision is the unglamourous part of the Bank's work and also its most thankless. It was Mr Quinn's unlucky lot to have been involved in supervision during all of the last big banking collapses - Johnson Matthey Bankers, BCCI and Barings. If past form is any guide, nobody at the Bank will make any public comment about Mr Quinn's retirement, which might remind us that he held office during a period when the Bank was criticised in the report on Barings by the Board of Banking Supervision.

When Johnson Matthey Bankers was ripped apart by fraudulent clients under the Bank's eyes, the debacle was serious enough to prompt a new Banking Act. But all that visibly happened at the Bank was that the executive director responsible for supervision was moved blamelessly sideways - to take charge of the Bank's input into new international supervision rules.

After the BCCI collapse and the report on it by Lord Justice Bingham, the only detectable change at the Bank was an early retirement of a manager in the supervision department, to denials all round that there was any connection between the two events.

There has been one resignation at the Bank as a result of the Barings report - Christopher Thompson, a middle-ranking manager in the supervision department. You could call that progress, since this is the first time the buck has publicly stopped anywhere. But while the Barings report did not criticise senior people at the Bank, it contained enough material on the weaknesses of supervision to justify the buck stopping rather higher.

When Mr Quinn goes, expect to hear that his decision is entirely personal, in the belief that after a long and difficult stint in the same job it is time for a fresh eye. The Bank's closely-knit culture being what it is, that claim will be true. Mr Quinn is such an old hand that he will be the first to know when his time is up, without any prompting from his colleagues.

The people demand consumer champions

Those who want to see North West Water's bid for Norweb referred to the Monopolies and Mergers Commission will not, it seems, be getting much help from the two industry regulators involved. Consultation documents are rarely what the name implies. Most of the time the ministers, civil servants and regulators involved in their construction have already made up their minds. It might be possible to make changes at the margin, but that is all.

So it appeared yesterday with a joint consultation paper - a first, this - from the water and electricity regulators Ian Byatt and Professor Stephen Littlechild on North West Water's bid.

In essence, what this document amounts to is an admission that even had they wanted to do something about this bid, they are powerless to do so. No wonder Sir Desmond Pitcher, chairman of North West, was so confident of regulatory clearance when he launched his bid; yesterday's document amounts to virtually that.

There is plenty of huffing and puffing, some suitable thumping of the chest, but beyond demanding appropriate licence amendments to safeguard transparancy of accounts, the regulators have been unable to put up any fundamental objection. There might be a case for a reference, the regulators concede.

A view must be formed, for instance, on whether the merger will bring about an undue concentration of economic power. But this is a public policy issue that goes beyond our remit, they conclude.

They are, of course, right. The powers and duties of regulators are narrowly defined and when it comes to changes of ownership, they are restricted in what they can do. In declaring their impotence, however, they have put their finger on all that is wrong with Britain's system of regulation.

What the people demand is consumer champions, regulators tough and powerful enough to carry out the public will. What we have are regulators who are also duty bound to pay safeguard the interests of shareholders and investors; in so doing, the consumer appears to have had a raw deal. The present takeover free-for-all only strengthens the case for fundamental reform of the regulatory system.

The bright idea returns to haunt the minister

Tim Eggar, the industry minister, has deservedly been getting some of the credit for the bright idea of a special dividend planned as a preliminary to the flotation of the National Grid, now owned by the regional electricity companies. It has, however, come back to haunt him in the shape of four grid directors who will benefit mightily if it is allowed to go ahead. Mr Eggar wants them to relinquish their claims, which he finds politically embarrassing.

The background to this little bit of fat cattery bears some repeating. If the Grid is sold with its present low levels of debt, it will produce a familiar animal; a potentially very lucrative utility with gearing in single figures. As the regional electricity companies have already shown, privatising utilities in this state can translate into a bonanza for investors.

Mr Eggar's bright idea is to raise the Grid's gearing before the flotation by paying a special dividend of perhaps pounds 850m to the recs that own it, replacing the funds with loans. Though this will have little effect on the Government's tax take from the sale, Mr Eggar believes it will help in presentational terms. The special dividends already out of the way, the National Grid, when floated, will not be quite the same bloated animal as the RECs were.

Unfortunately, the government did not remember until rather late in the day that the grid was not entirely owned by the RECs. Directors of the Grid have some too, which makes them entitled, along with the RECs, to the dividend. David Jeffries, the chairman, is alone entitled to nearly pounds 200,000. Whether he deserves it or not is beside the point; the idea that moral blackmail should be used to prevent shareholders of any kind taking up their legal entitlement is worrying.

In this case, the entitlement stems from decisions made by ministers at the time of privatisation. Furthermore, the controversy ultimately arises because of the Government's serious underpricing of the sale of the electricity industry. The government constructed this bed of nails for itself and it would be more dignified if Mr Eggar agreed to lie quietly on it.

News
people

Actress sees off speculation about her appearance in an amazing way

Arts and Entertainment
Serge Pizzorno of Kasabian and Noel Fielding backstage at the Teenage Cancer Trust concerts
musicKasabian and Noel Fielding attack 'boring' musicians
News
peopleLynda Bellingham's tragic final Loose Women appearance moves audience to tears
Arts and Entertainment
'Right Here' singer Jess Glynne is nominated for Best Newcomer at the MOBO Awards 2014
musicExclusive: Jess Glynne hits out at 'ridiculous' criticism of white artists nominated for Mobo Awards
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Separated at birth? Frank Sivero (left) claims The Simpsons based Mafia character Louie on his Goodfellas character
arts + entsFrank Sivero sues Simpsons studio over allegedly basing mobster character on Frank Carbone
News
Carl Bernstein (left) and Bob Woodward (right) with former 'Washington Post' executive editor Ben Bradlee
people

The Washington Post editor helped Bob Woodward and Carl Bernstein bring down President Nixon

News
news

Voices
Stephanie first after her public appearance as a woman at Rad Fest 2014
voices

Arts and Entertainment
Laura Wood, winner of the Montegrappa Scholastic Prize for New Children’s Writing
books

Children's bookseller wins The Independent's new author search

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Helpdesk Analyst

£23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London