Last October New Labour brought out its big gun in the form of a pledge by BT to cable up every school and library in the land for free provided it was given the right to broadcast entertainment services on its network.
Now we know what the Government's secret weapon is - an offer from none other than Rupert Murdoch to place a satellite dish on top of every classroom in return for unfettered access to digital television - the technology of tomorrow.
BT and BSkyB are serious players and their willingness to line up on either side of the political trenches speaks volumes about the opportunities, not to mention the profits, to be had from the superhighway.
As an act on one-upmanship it must have given the Deputy Prime Minister, Michael Heseltine, much pleasure in signing up the News Corporation chairman after all the cosying up Tony Blair has done to Mr Murdoch.
But on closer inspection there is something that differs crucially between the two pacts with BT and News Corp. In BT's case Labour first has to deal with the small matter of getting into power. It is only then that the hard bargaining will begin. Meanwhile the party can bask in the reflected glory that comes from being in the vanguard of the technology revolution. without actually having to deliver.
In the case of Mr Murdoch, however, the Government already appears to have delivered on its half of the bargain.
It may, of course, be pure coincidence that shortly after Messrs Heseltine and Murdoch hatched their plan over a discreet lunch six weeks ago, the Government introduced an amendment to the Broadcasting Bill that allows News Corp's 40 per cent-owned BSkyB full control of a licensed UK-based satellite service. At a stroke this would allow Mr Murdoch to send a digital satellite into space to beam back to UK homes. This in turn would free capacity on his existing Astra satellites, which are operated from Luxembourg, for use by BSkyB and its European pay-TV partners whilst radically extending the depth and spread of its reach in the UK through the much greater capacity that digital can handle.
The Government amendment could, of course, also give the Mirror Group the ability to operate its own domestic satellite service, but the most obvious beneficiary is News Corp.
Panic on the streets of Zurich
Anxiety and alarm were rampant yesterday in the corridors of the Canary Wharf operations of CS Holding and the Broadgate offices of UBS, three miles away in the City of London. This is hardly surprising.
SBC's takeover last year of Warburg was a vivid demonstration of the pain caused by rationalisation in an investment bank. Large chunks of UBS and CS Holding's investment banking operations in London overlap.
The consequences do not need spelling out for the highly paid employees of the two banks. The next couple of years will be hell if the merger gets off the ground.
The rapidly emerging consensus in London and Zurich yesterday was that a full merger is unlikely to be achieved, regardless of what comes out of the UBS board meeting this afternoon.
Brokers' analysts who attended a meeting with Mathis Cabiallavetta, the UBS chief executive, did not come away with an impression of a man raring to go in for some Anglo-Saxon-style financial engineering and corporate restructuring.
The real difficulty lies not with integrating the investment bank offshoots in London and New York, where the synergies in corporate finance and equities may well outweigh the disadvantages in overlapping fixed interest and derivatives businesses. On paper, the idea of what would essentially be a transatlantic alliance - because of CS First Boston's strength in New York - does look rather attractive for Swiss bankers with global ambitions.
The problem is with the overbanked domestic Swiss market. UBS appears to have gone further down the road towards rationalising its branches than CS Holding, which has recently bought not one but two smaller rivals in the home market and is in the process of digesting them. There does not seem much appetite inside UBS's boardroom for sharing the pain with another bank that has not done as much or as fast.
However, it would be dangerous to dismiss the talks as ephemeral, or to see the leak on Tuesday as no more than a ploy by UBS to take investors' attention away from Martin Ebner, the dissident shareholder who next Tuesday plans to vote against the election of Robert Studer as the new chairman. This week's events may be the start of a long-winded process that does lead to some form of co-operation and rationalisation.
By all accounts, the pressure within Switzerland to sort out the overpriced, overstaffed and overbranched banking market is very great. The concern that something must be done is shared by the Swiss Banking Commission. For UBS and CS Holding even to discuss a merger is a breakthrough of a sort.
If UBS were smaller, CS Holding might short-circuit the board's opposition with a hostile bid which - contrary to widespread belief - is not completely out of the question in Switzerland, in spite of the country's very different views on corporate governance. CS Holding made a hostile bid for Bank Leu in 1990. It is sheer size and the complexity of shareholding structures that rule out a hostile attack among the big three banks.
Colour-coding at the CBI
Memo to Sir Colin Marshall: You may not take over as president of the Confederation of British Industry until May but the important thing to bear in mind always is that this is a "non-political" organisation.
We appreciate that your Better in Britain booklet is designed to promote our economy and the joys of doing business here.
But to the untutored eye it could look like a piece of Conservative Central Office propaganda. Perhaps it has something to do with all that blue on the cover or the accompanying letter from Mr Major or the role of Sir Tim Bell in putting it all together.
Or perhaps it has something to do with the booklet's striking resemblance to the last Tory party political broadcast and the cut of the other chaps who have lent their endorsement. Lord Hanson is, after all, not renowned for his socialist instincts.
The folk at the CBI run a mile from being branded political animals, which is perhaps why they have declined to endorse your effort.
But don't worry - you'll be seeing a lot of the president's council in the year ahead. At least two of them are on your side.Reuse content