Consider what Mr Lang had to say about the desirability of such concentration of power as recently as May. The occasion was a utilities conference and his speech was mainly directed at the electricity and water industries but his comments could have applied equally to any sector. His words are worth repeating in full. "Some people argue that competition should not be my top priority, but that I should use my powers to encourage the creation of large utility companies which have the scale to compete in world markets. I believe that this argument misses the point. It is not the place of competition policy to engineer the creation of so-called national champions. Of course we all want world-class companies, but the best prospect of a company becoming a successful global competitor is the experience of a demanding competitive market at home."
Now compare and contrast. Should Bass acquire Allied Domeq's half-share in Carlsbergy Tetley, then the merged group will supply nearly half the beer drunk in Britain's pubs and control four of the country's top 10 brands. Following Scottish & Newcastle's acquisition of courage last year nearly 70 per cent of the UK beer market will be in the hands of just two brewing groups.
Mr Lang, however, appears to have bought the argument that this does not matter. It is true that the beer industry and the market it serves has undergone some fundamental changes in the last few years. Since 1990 the proportion of beer sold through pubs tied to brewers has drooped from more than a half to under 40 per cent and is projected to fall further to 30 per cent by the end of the decade.
Large independent pub chains have emerged with real purchasing power to counter the dominance of the big brewers while booze cruise imports from the Continent continue to chip away at traditional markets, so much so that the off-trade accounts for three times the volume of beer sales it did in 1980. The brewers have responded by closing nearly 10 millions barrels of capacity, virtually eliminating overcapacity.
The Bass lobbying machine has told the DTI that the Carlsberg deal would enhance competition, not reduce it, by releasing Allied Domeq's 4,000 pubs from the tie with Carlsberg Tetley. Bass has also let it be known that if it were able to consolidate at home then it could really get down to business by exploiting the burgeoning markets of China and eastern Europe where it already has a toehold in the Czech republic. These sound suspiciously like the overtures of a "national champion" and Mr Lang looks suspiciously like responding favourably to them.
Norwich Union must think again
It is several months since it became public knowledge that Norwich Union's investigation of a possible demutualisation and flotation in the first half of next year had firmed up into preliminary decision that it should go ahead. But the insurer is being a bit coy about admitting it publicly, before the formal announcement of the pounds 4bn flotation, scheduled for October.
It is worried about carpet-baggers, as well as possible complaints from regulators that it is encouraging people to buy long-term policies for the wrong reasson, by hinting at short-term cash windfalls.
As a pre-emptive measure, the insurance group took powers at its annual meeting in May to set a cut-off date for membership. This was to prevent opportunist new members speculating on a pounds 700-a-head average payment at the time of the flotation. In fact, the risk of a rush of new business, building society style, is quite small because the ownership profile of a mutual insurer is quite different from that of a building society.
Societies live off short-term deposits which are highly mobile. When they convert, they cannot afford to alienate recently enrolled members by paying them little or nothing, because they might not win enough votes to win approval of the demutualisation.
A life insurance company has a different membership profile since many policyholders are long-term by definition, and do not switch from company to company as rates change. So if the rewards of flotation are skewed heavily towards long-term holders there is less risk than with a building society that the conversion will be voted down.
Norwich's payout will almost certainly be structured to discriminate against carpetbaggers. Indeed, there is no reason why they should get anything at all. Scottish Equitable, for example, paid nothing to new policyholders when it converted and sold out to Aegon. It is this long- term relationship between member and mutual society that distinguishes insurance companies from building societies.
The bigger societies have already become almost indistinguishable, except perhaps in brand image, from retail banks. A life insurer needs to make a far stronger case for losing the benefits of mutual ownership.
Ferranti's forgotten message
A long time ago a company called Ferranti, which does not now exist, bought another company called Interational Signal and Control, which no longer exists either, after taking professional audit advice from KPMG. The business turned out to be constructed on a gigantic fraud and KPMG duly settled out of court on the advice of its insurers to the tune of pounds 40m.Why the history lesson, you may ask. Well, the accountancy profession's top disciplinary body has just got around to clearing KPMG of any professional failure on the grounds that ISC's founder, James Guerin, had duped everyone. You may think that seven years is a long time to wait only to hear that everyone is in the clear. There are reasons for the delay. Michael Chance, the solicitor who conducted the inquiry, only got to work on the case in June 1993 partly because the executive of the Joint Disciplinary Scheme have to wait for one of their sponsoring bodies, made up of the accountancy institutes to request an investigation..
All in all, it is an unsatisfactory state of affairs that has its roots in the professional bodies' determination to retain a regulatory role alongside their position as representatives of and lobbyists for their members. To be fair, investigations must be swift as well as thorough. In the interests of saving time and money, some truly powerful bodyshould be set up with the intention of investigating events and responsibility for them as soon as they occur. That way we might get the results of inquiries before we have forgotten what led to them.