I'm surprised we haven't seen any Labour ministers speaking out about Lord Simpson's £1m pay-off from Marconi. After all, I recollect Ian McCartney, now holding the post of Pensions minister for his sins, protesting with a "King of the Fat Cats" outside a British Gas AGM a few years ago. And usually when the Daily Mail rails against something, as it has been doing all week with Simpson's bounty, this brings a Pavlovian response from the Blair Politburo.
But then again, George Simpson is "one of us". He is among the band of industrialists who signed up with New Labour when the party was pushing to ditch its old affair with the unions to become a friend of business. Lord Simon of Highbury, Sir Peter Davis, Martin Taylor, Bob Ayling and Lord Simpson all became friends of Tony in the months after the 1997 election victory.
And what happened to them? David Simon went into Government, back out again, and back in, as if he was playing a game of political hokey-cokey. Sir Peter quietly gave up Welfare to Work when he moved from the Pru to Sainsbury's. And Taylor, Ayling and Simpson – who was made a Labour "working peer" by Tony – all lost their day jobs and were awarded seven-figure pay-offs.
This highlights the trouble with Labour and business. It tends to be an unnatural cohabitation. The party was created to represent the interests of the workers, not the capitalists, and however much Labour tries to escape its shackles it cannot. That is because Tony Blair and Gordon Brown and Jack Straw did not join the party to hobnob with captains of industry – even if that is what they feel they must do – while Iain Duncan Smith and Ken Clarke did. Archie Norman might be not be the greatest opposition spokes-man, but he was damn good at running a supermarket group.
Labour has a bad track record with businessmen. There was Geoffrey Robinson and before him Robert Maxwell. Then the old Labour leader, Neil Kinnock, did not cover himself with glory with his comments when Captain Bob died, appearing unwilling to join the condemnation of the tycoon until the evidence of his malfeasance was all too obvious.
Tony Blair is trying to turn Labour into the UK version of the Democratic Party. It never represented the interests of Labour and so can quite easily accommodate multimillionaires from Wall Street – such as Robert Rubin, Robert Corzine and Felix Rohaytn – into its ranks of supposedly socially aware politicians.
But Bill Clinton, although close to business, kept a critical distance. Blair has shown a worrying lack of judgement on whom he should trust. In that way he is in danger of embracing business the way George W Bush does, lying down and letting the likes of Bill Gates walk all over him. Not speaking out against the Marconi debacle is not as bad a crime as letting Microsoft off the antitrust hook. But it is a nod in a similar direction. Labour should not let its desire to make business its friend obscure what is right and what is wrong.
COLT's bizarre bond buy-in
Maybe I have a reader in Peter Manning, who enjoys the splendid title of president and chief executive officer of COLT Telecom. When I suggested Marconi bought in its bonds – something which will be even more smart to do next week if it wants to draw down some money from its foolish bankers – it might have triggered a thought in Mr Manning's head. That is why COLT spent £85m buying in bonds at a discount last week.
However wise this might appear, it is actually a bizarre move. COLT is not cash-rich. Indeed, before it made these purchases it had a funding gap (that is a shortfall between its financial resources and what it needs to fulfil its network building plans) of £600m. It now has a funding gap of £685m.
Mr Manning must be confident he can bridge that gap. And given that the bond market is not keen on COLT, he will have to do this either via the banks or through the equity market. If it is via the equity market, this means COLT's controlling shareholder, Fidelity Investments, has agreed to underwrite a further rights issue. Given the preponderance of Fidelity on COLT's board, they must know this, therefore Fidelity is in possession of inside information and COLT should make an announcement.
Alternatively, this bond buy-in could merely be window dressing to make COLT more attractive to a purchaser. But who? The only rival with any spare cash is Cable & Wireless, and Graham Wallace claims he is not interested.Reuse content