COMMENT: When the family silver starts to run out

"Together these two privatisations could conceivably be worth £8bn, which would pay for 3p off income tax. Both are likely to prove unpopular, however"

Post Office privatisation is definitely off, air traffic control will not be sold before the election, if at all; the only bits of family silver left for the Treasury to sell, it seems, are railways and nuclear power. For a government as low in the polls as Mr Major's, this is a dreadful hand to have to play. Everything has its price, but for the City, too, this is an unappetising choice between two dogs.

It is the political implications that will most worry the Government, however. Together these two privatisations could conceivably be worth £8bn, which would pay for 3p off income tax. Both are likely to prove unpopular, however, even if unashamedly aimed at the retail investor. Railway privatisation has raised widespread fears about standards of service, safety and prices, especially among the middle-class commuting voters to whom Labour is increasingly attractive.

By comparison, nuclear privatisation has a superficial attraction to it; by cancelling the nuclear levy the Government could cut electricity prices in England and Wales (but not Scotland) by as much as 10 per cent. On the other hand, with the Post Office debacle still fresh in the Government's mind, it may seem a risk not worth taking. Every last radiation or safety- related issue, from disposal of low-level hospital waste to shipping reprocessed fuel to Japan, will be pinned onto privatisation, whether related to the generators or not.

A government under less financial pressure would be sensible to delay one or both of these privatisations. There were suggestions yesterday, hotly denied by the Department of Transport, that the victim would be rail. If anything, however, the nuclear sale looks more vulnerable. Railway privatisation is well under way. The three Roscos, the leasing companies that own the passenger rolling stock, are already on the auction block this year and they alone could fetch up to £2bn. The sale of the first passenger franchises has gone past the pre-qualification stage. Railtrack itself, to be floated next year for perhaps £2.5bn, may account for less than half of total rail privatisation proceeds.

Certainly it would be possible to delay Railtrack's flotation while scooping up the revenues from the Roscos and the rest, but it is hard to see what would be gained.

It is the sale of the franchises, not Railtrack, that is causing most public concern; that process needs to be stopped now if it is going to be at all.

Nuclear power privatisation, by contrast, has hardly got to first base. The City, for the most part, remains deeply sceptical and at this stage there must be a risk of serious delay. The only conclusion it is possible to draw from all this is that ministers are attempting to hedge their bets. The Treasury needs about £5bn of privatisation proceeds in the run- up to the election to meet its forecasts and give itself credible scope for tax cuts. It therefore needs to push both these privatisations as hard as possible in the hope that it gets one through on time.

Labouring towards a policy on the City

When it comes to clichs and platitudes, the politician usually has a short head on the journalist. In the spirit of competition, which Gordon Brown is keen to see furthered in industry and commerce, we offer up the following analysis of the speech he made yesterday, entitled the dynamic market economy. This was an initiative that was long on rhetoric and short on detail. In most of what it covered, it posed more questions than it answered. For vision Mr Brown registered a good eight out of ten, for practical solutions, he would hardly thank us for reporting the score. In short, it was about as woolly as an unshorn sheep, pure flannel.

To be fair on Mr Brown, it wasn't that bad; on the other hand a great deal more thought is clearly required to prevent the civil servants strangling most of it at birth. To make utility charges the object of public inquiry, for instance, may be desirable, but it can hardly be regarded as any more practical than doing the same with taxes. Nor, judging by what he said, has the Labour Party yet fully thought out its position on City regulation, which would end up on these proposals as an unsatisfactory mish-mash of the statutory and non statutory. One thing the likes of Lord Hanson might take comfort in, however:there is not a hint in there of the dividend curbs recently given an airing by a high-ranking Tory minister. It seems that in these things Mr Brown is less of a socialist than Stephen Dorrell.

Pre-empting the tardy Bank

It is not often that large-scale executive dismissals are so comprehensively flagged as those yesterday at Barings. Within a couple of weeks, at the most, of its purchase of the bust merchant bank, ING had a pretty clear idea of who it wanted out. The new Dutch owner spoke privately of the cleansing process needed to restore faith and morale among staff and clients of this traumatised business. Anyone with a managerial line of responsibility for derivatives trading in the Asia region was being targeted for the chop the moment ING assumed control.

Nonetheless, it held back, largely it now transpires because of a misunderstanding with the Bank of England. The Bank had assured ING in late February the investigation into Barings would take six to eight weeks. To anyone used to British ways, that naturally meant three or four months. The Dutch took it literally as a commitment, and were aghast when things turned out otherwise.

Clearly it made little sense to wait for a report that, as far as ING was concerned, would shed little new light on the affair. To restore the credibility of Barings with clients, ING had to act sooner; hence the axeing (sorry, honourable resignations) of 21 executives.

No doubt the Bank of England's investigation needs to be a more complex and precise surgical operation than the one just applied by ING. Even so, the dragging pace of the Bank's inquiry, is worrying.

Beneath the heavy cloak of what it calls a semi-judicial inquiry, the Bank's painstaking approach to the task may seem as much a function of a hidden agenda, beyond the stated one of understanding the facts of the fall of Barings. The Bank's committee of supervision is presumably going as fast as it can, but to the outside world it must seem as if the inquiry is as much about defending the Bank of England, protecting its reputation as a regulator, thwarting the efforts of the Singapore authorities to offload responsibility for the debacle onto London, and keeping those pesky politicians off its back, as anything else.

News
peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
Sport
Romelu Lukaku puts pen to paper
sport
News
Robyn Lawley
people
Arts and Entertainment
Unhappy days: Resistance spy turned Nobel prize winner Samuel Beckett
books
PROMOTED VIDEO
News
people
Life and Style
Troy Baker and Ashley Johnson voice the show’s heroes
gamingOnce stilted and melodramatic, Hollywood is giving acting in video games a makeover
News
i100
Life and Style
Phones will be able to monitor your health, from blood pressure to heart rate, and even book a doctor’s appointment for you
techCould our smartphones soon be diagnosing diseases via Health Kit and Google Fit?
News
people
Extras
indybest
Travel
Ryan taming: the Celtic Tiger carrier has been trying to improve its image
travelRyanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
Life and Style
Slim pickings: Spanx premium denim collection
fashionBillionaire founder of Spanx launches range of jeans that offers 'thigh-trimming construction'
News
Sabina Altynbekova has said she wants to be famous for playing volleyball, not her looks
people
News
i100
Life and Style
tech'World's first man-made leaves' could use photosynthesis to help astronauts breathe
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

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

BA/PM,EMIR/Dodd-Frank,London,£450-650P/D

£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...

Senior Analyst - ALM Data - Banking - Halifax

£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...

Java developer - Banking - London - Up to £600/day

£500 - £600 per day: Orgtel: Java developer - Banking - London - Up to £600/d...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star