Behind the scenes, the Treasury also put the kibosh on DTI proposals to introduce profit sharing into economic regulation of the privatised utilities. This was once a fully fledged policy for government when Labour was in opposition, proposed as a way of targeting supposedly excessive profits among the utilities. Since then it has been watered down and watered down. I'm told it has now been quietly buried altogether.
Then there was Mrs Beckett's speech to the British Chambers of Commerce annual meeting in Birmingham in which she chose to defend her record mergers policy. This went down like a lead balloon, not because anyone wildly disagreed with what she was saying, but because the subject of global mega mergers is about as relevant to the ordinary everyday concerns of small to medium sized business as a ten-bob note.
Now it looks as though she's about to get the final slap in the face before being put out to pasture in the summer reshuffle. This comes in the form of the coal review, about which there was heated toing and froing between the Treasury and the DTI all this week. There could hardly be a more poignant old versus new Labour issue than this one. At stake are 5,000 jobs in the coal mining industry. This is obviously a large number and for many of these people, there is no alternative employment near the pits where they work. Furthermore, mining has a special place deep at the heart of the Labour tradition.
In the scale of things, however, these jobs are a drop in the ocean. Certainly they wouldn't seem to justify the sort of intervention in the energy market needed to save them. Nonetheless, Margaret Beckett supported by the Paymaster General Geoffrey Robinson, who has clung to the coal review like a rock in the midst of all his other troubles, think the price worth paying. They want the present moratorium on all new gas fired power stations extended indefinitely. The effect of this would be to save remaining coal fired power stations from absolute extinction and thus guarantee a continuing market for the pits.
An ingenious way has been found for dressing up the policy. This would not actually be interference in the market, it is claimed, but rather an attempt to make the market more competitive. The new gas fired capacity hasn't increased competition at all, it is argued. Because most of it has been built on the basis of sweat heart deals with electricity distributors, it has instead distorted the market and prevented coal from getting a fair hearing.
All the same, an absolute ban on gas fired stations when there are still plenty of companies around who want to build them cannot in the end be seen as anything other than an infringement of free market principles, whichever way the argument is cut. The result is likely to be a messy compromise, a partial ban which allows both sides of the debate to claim partial victory.
But underneath the rhetoric, Margaret Beckett and the forces of old Labour will have lost again. Ironically, given how many policy disagreements there seem to have been between the Trade Secretary and the Chancellor, Gordon Brown may be the only one who can save her. They are old political allies and Mr Brown is nothing if not loyal. Alternatively, the time may have come to disband the DTI altogether and subsume its functions into the Treasury and elsewhere.
Given the regularity with which the Trade Secretary is losing the policy battle, it does rather leave you wondering what purpose the department now serves. The Treasury has always hankered after a wider role in the UK economy than that of controlling the nation's purse strings. Its time may finally have come.
I'M INFORMED by our New York correspondent that press coverage of the Goldman Sachs flotation in the US has been but a tiny fraction of the huge quantity of column inches devoted to it here in the UK, even though Goldman Sachs is a US based investment bank.
Moreover, the tone of the reporting has been quite different. In the US the $35bn float has tended to be treated as a straight business story and the analysis has concentrated on the merits or otherwise of converting from a partnership into a joint stock company. In the UK, a vast amount of space has been devoted to the story outside business pages, and usually it has been reported as City fat cattery.
This tells you a lot about the continuing cultural differences between the US and the UK. Despite the Thatcher reforms of the 1980s, we are still generally suspicious and jealous of uninherited wealth, unless it is made by sports and rock stars, which seems to make it somehow alright.
I don't want to act as a mouthpiece for Goldman Sachs (I'd get paid a lot more than I am if that were my role), but personally I can see nothing wrong with the firm's partners and employees enriching themselves in this way. The raison d'etre of an investment bank is to make money. Some investment bankers pretend to a higher purpose - we're there to help advance the general prosperity of the world and other such guff - but actually the most successful investment bankers are those wholly focused on the fee and the turn.
In the case of Goldman Sachs, this is their own business which is about to be floated, it is their hard work, commitment and expertise which has helped make it into the world's most profitable and successful investment bank, and nobody, apart perhaps from future generations of aspiring Goldman Sachs partners, is being disadvantaged or ripped off by the change.
The moral point about whether anyone "deserves" such wealth is an irrelevance. Nobody "deserves" wealth on this scale for it is surely more than anyone could sensibly spend in a lifetime.
Nonetheless, we work within a tried and tested economic model. A system that encourages the concentration and realisation of wealth through honest endeavour seems to be better capable of creating wealth for all of us than any of the alternatives.
There is still a lot of hypocrisy in Britain when it comes to money. The Goldman Sachs partners should be held up as a role model for all, not pilloried as City fat cats.Reuse content