But hold on a moment. How new is all this, and will it actually make any difference? The Government is right to carry out this review. It is right to scrutinise spending in the light of its priorities. But the triumphalism of the announcement underplays the Conservative government's own efforts to carry out a genuine review of public expenditure and overplays the scope for and prospect of radical switches in spending.
One of the innovations claimed by Mr Darling was an inventory of departmental assets, with a view to selling off any the Government does not need. No other Government hadachieved a comprehensive inventory before, he said. This is technically true, but the minister must have had his fingers crossed behind his back. The work is already under way as part of the shift towards more commercially orientated accounts for the public sector initiated by Kenneth Clarke. The former Chancellor's decision to move to "resource accounting", as it is known, will have radical consequences for judging public expenditure.
Actually altering public expenditure is another matter. Pamela Meadows, a former senior civil servant who now directs the Policy Studies Institute, has pointed out that when her department, Employment, underwent its last fundamental expenditure review, the idea of axeing government training schemes for the jobless was never considered. Yet all studies have shown that these schemes do nobody any good. Her point is that it is almost impossible to be radical about areas where ministers have invested political capital.
The chances are obviously better for a new Government. But even New Labour has its sacred cows. Will it axe all Government-funded training schemes? Absolutely not: it is offering training as one of four options for the young unemployed. Will it make pensioners pay for prescriptions? Not without a serious tussle between Gordon Brown and Frank Dobson at the Department of Health. The Chancellor and his team need to combine some sensible expectations about what the new comprehensive review can achieve with the stirring rhetoric of matching spending to the people's priorities.
ITV's consolidation has gone far enough
Every businessman aspires to monopoly, the late Roy Watts, former chairman of Thames Water, used to say. Those who tell you otherwise, he would insist, are just being disingenuous. He is as right now as he was then, of course, only our leading industrialists have since learnt to dress up the pursuit of monopoly in rather more seductive language. There's scarcely an industry worth the name that doesn't talk constantly these days about the need for "consolidation". If you want us to provide a decent service capable of competing internationally, then we must be allowed to consolidate in the home market, is the general thrust of the argument. Usually it is expressed in rather more subtle and beguiling terms than this, but that's roughly how it goes.
So it was yesterday as Gerry Robinson, chairman of Granada, became the latest businessman to beat the consolidation drum. ITV has already been allowed a high degree of it, with an original 15 franchises in 1993 now owned by just nine holding companies. But Mr Robinson wants to go further, much further. He wants ITV to be allowed to consolidate into just one consortium company, with ownership shared by ITV's present media barons. The present structure, he says, is ludicrous, costly and incapable of competing long term against Sky, the BBC, cable, and Channels Four and Five. Let us consolidate, he argues, and we would then have a superior service and superior programming which Britain plc could sell to the world.
Familiar stuff, but actually even more tenuous a justification for more consolidation when applied to TV than most other industries. ITV already provides its owners with a handsome return, even after payments to the Exchequer, and it still takes the vast bulk of TV advertising in this country. Furthermore, it already produces good, high-quality programming capable of competing with the best that others can offer. There is no evidence this programming would get any better, or that any more money would be devoted to it, if the industry were allowed further to consolidate. Nor, except perhaps in the case of high-cost period drama, would demand overseas be improved for what would almost certainly continue to be largely parochial British-based product.
Mr Robinson is talking baloney, though nobody can blame him for at least trying it on. He's not the first, nor will he be the last. Sky, cable and others may eventually eat sufficiently into ITV's traditional market to justify a rethink, but that time has not yet come. For the moment, consolidation in ITV has gone as far as it ought to.
Hambros must come clean about the Co-op
Sir Chips Keswick played a predictably straight bat yesterday over what Hambros has coyly taken to calling the "CWS matter". A distraction, dear boy, that we'll be able to put behind us just as soon as that wretched independent report is out of the way. Can't say if we'll publish the damn thing, of course, and, so sorry, can't say how much that regrettable little episode cost us.
It is easy to be seduced by the patrician grace of Hambros' chief executive, but digging the bank out of this particular pickle is going to demand a little less charm and a great deal more clarity. Hambros jumped into bed with Andrew Regan because it was desperate for business in its struggling corporate finance arm. If it is to gain better quality work than that, the least it must do is come completely clean about its mistakes.
One thing is for certain, the Regan camp will be pressing for publication of the Norton Rose report. Rightly or wrongly, it feels it has been made the scapegoat for this shabby affair and it won't rest until Hambros' role is out in the open. If it is all going to come out in the wash anyway, it is surely better to bite the bullet and issue a voluntary mea culpa.
Even then, Hambros remains in a bind. The sharp rise in its profits last year owed more to the booming housing market than any improvement in its core banking business. Strip out a fall in bad debts and banking profits were well down. Both insurance and investments were also lower. The circling vulture of Jim Mellon's Regent Pacific is unlikely to be impressed by what even Sir Chips describes as wholly inadequate returns.
It is frankly hard to see how Hambros can develop a meaningful role in the modern City. One of the reasons the bid for the CWS failed was the bank's inability to secure finance for the takeover quickly enough to pre-empt the society's highly effective defence. If it cannot secure funds then all it can offer is the quality of its advice. Backing Lanica Trust was hardly a ringing endorsement of its judgement.Reuse content