Old school tie fudges the issue of fair treatment

COMMENT

The City practice of blackballing has always been an imperfect and unsatisfactory one. It works like this. The Bank of England or one of the other City regulators decides you are not fit and proper to hold a position of responsibility in the City or offer investment advice. It is not necessarily obliged to give any reasons and most of the time does not. In the Bank of England's case there is a lengthy and mysterious appeals procedure, all heard in private you understand, which most agree breaches all principles of natural justice. But so what, it might be said. Whatever the system's faults, if it succeeds in keeping the rotten apple out of the barrel, then it can be no bad thing.

Now, courtesy of the Securities and Futures Authority, we have a new twist - the blackballing which is not a blackballing. Thus Peter Baring and Andrew Tuckey, though cleared of responsibility for the failure of their bank (a subtle point, this, since it was they who ran the show), have been asked for assurances that they will not seek to re-enter the investment industry. Mr Baring has given that undertaking but Mr Tuckey has not.

In Mr Tuckey's case a compromise has been agreed. If he limits himself to corporate finance advice, then he's OK. While this will clearly restrict him, it is obviously a fudge bordering on a show of old-school-tie favouritism. Mr Tuckey has continued to work for Barings as a consultant, despite all that has happened. Either the SFA believes Mr Tuckey is accountable, in which case he should be properly blackballed, or it does not, in which case he should be fully cleared. Proper rules and guidlines need to be laid down in this area. If the City is going to blackball, the process has to be seen as fair and equitable. The other ranks, meanwhile, look set to get it in the neck. The SFA's silence on the others can only mean it intends disciplinary action against them.

Yorkshire finally grasps the nettle

It has taken Yorkshire Water longer than it might have done, but finally the nettle has been grasped and the two most senior positions in the company, chairman and managing director, are to be vacated and filled with new blood. There is always the possibility, ofcourse, that Yorkshire will receive a takeover approach, that Sir Gordon Jones and Trevor Newton, like Keith Court at South West Water, will have to be "persuaded" against retirement so that the barricades can be manned and the invading hoardes seen off.

Joking apart though, the oddest thing about the Yorkshire duo's departure is that the company won't admit it has anything to do with last year's drought. No, neither has been sacked, the company insists, they are just retiring. Cute stuff this. While it may be just about believable in the case of Sir Gordon Jones, who is in his late sixties, it is not in Mr Newton's. He is just 52 and gold plated though the remuneration packages of utility bosses tend to be, that is not an age at which anyone willingly retires.

Mr Newton is the man who famously urged his customers not to take baths, and then was caught taking one himself in a neighboring water region. In his public relations, Mr Newton was plainly inept. This was also the man who at one stage was spending hundreds of thousands a week tankering water around Yorkshire to cope with the company's inadequately prepared water infrastructure.

There is another odd feature about all this, however. Normally managements are turfed out because of discontent among shareholders. That is not the case with Yorkshire where the City was generally supportive of encumbant management throughout last year's drought. Ironically, Yorkshire's management was thought of as amongst the most enlightened and sensitive of the water companies. Furthermore, neither man is leaving with any kind of pay-off or pension top up. In that sense they are genuinely "retiring", doing the honourable thing after a year in which they were lambasted and ridiculed by their customers for failure to anticipate the drought. Their departure has nothing to do with failure to deliver shareholder value.

Nor are their successors - Brandon Gough and Kevin Bond - the utility fat cats of legend. The new chairman comes in at "just" pounds 120,000 a year and Mr Bond at pounds 135,000, no options, no bonuses and no long-term incentive packages. These are not large sums for a company of Yorkshire's size - it is honest pay for an honest job. Could this be stakeholder capitalism in practice? Neither the departures nor the rates of pay reflect the normal priorities of the City. Rather, they are a response to the demands of ordinary customers.

US prospects suggest a happy ending

It has all the hallmarks of a disaster movie; the runway lies directly ahead, but the pilot cannot see in front of him, the panels are giving erratic readings and there is a blizzard buffeting the aircraft. The story of the US economy has been a cliffhanger for the past six months or more, but after the latest figures the soft landing scenario is coming to seem the most likely once again. The pace of activity is now showing clear signs of picking up after lingering dangerously close to recession. Inflation is low and will remain so - at least until much later in 1996. Like the movies, a happy ending is in prospect.

The markets do not like it, of course. They would have preferred a crash landing guaranteeing the demise of inflation and an injection of cheap money to revive the economy.This is short-termism with a vengeance. What could be better for the profitability of American companies than faster growth with inflation well under control? The stock market has been overlooking the fact that the tilt towards recession which would have led to lower interest rates was starting to hit profits too. Fourth-quarter earnings have disappointed analysts' expectations. The fact that the economy appears to have pulled out of the nosedive will help improve earnings this quarter. The pick-up might carry the penalty of higher inflation towards the end of the year but there is no sign of it yet. Meanwhile, chief pilot Alan Greenspan has his craft back under control.

Fokker's failure cheers the sceptics

Eurosceptics are bound to take heart from Fokker's predicament. It will confirm their claims about the impact on industry of joining a strong and rigid currency area dominated by the mark. Fokker is certainly a case study in how a middle-ranking company, operating in world-wide dollar- based markets, is likely to have a dreadful time if it is based in whose currency is harnessed to the mark. But this was not the only factor behind Fokker's demise. Daimler-Benz Aerospace, the controlling shareholder, also failed to get a grip on strategy. It spurned the Franco-Italian ATR consortium's attempt to consolidate the European feeder aircraft industry to reduce costs and strengthen marketing. Instead, it demanded that the business should be concentrated around Fokker and Dornier, DASA's turbo- prop subsidiary. That sealed Fokker's fate.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Attenborough with the primates
tvWhy BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
News
Campbell: ‘Sometimes you have to be economical with the truth’
newsFormer spin doctor says MPs should study tactics of leading sports figures like José Mourinho
Sport
football
Life and Style
Agretti is often compared to its relative, samphire, though is closer in taste to spinach
food + drink
News
Kelly Osbourne will play a flight attendant in Sharknado 2
people
News
Down-to-earth: Winstone isn't one for considering his 'legacy'
people
News
The dress can be seen in different colours
i100
Sport
Wes Brown is sent-off
football
Voices
Lance Corporal Joshua Leakey VC
voicesBeware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Life and Style
Alexander McQueen's AW 2009/10 collection during Paris Fashion Week
fashionMeet the collaborators who helped create the late designer’s notorious spectacles
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor
Alexander McQueen: The catwalk was a stage for the designer's astonishing and troubling vision

Alexander McQueen's astonishing vision

Ahead of a major retrospective, Alexander Fury talks to the collaborators who helped create the late designer's notorious spectacle
New BBC series savours half a century of food in Britain, from Vesta curries to nouvelle cuisine

Dinner through the decades

A new BBC series challenged Brandon Robshaw and his family to eat their way from the 1950s to the 1990s
Philippa Perry interview: The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course

Philippa Perry interview

The psychotherapist on McDonald's, fancy specs and meeting Grayson Perry on an evening course
Bill Granger recipes: Our chef recreates the exoticism of the Indonesian stir-fry

Bill Granger's Indonesian stir-fry recipes

Our chef was inspired by the south-east Asian cuisine he encountered as a teenager
Chelsea vs Tottenham: Harry Kane was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope

Harry Kane interview

The striker was at Wembley to see Spurs beat the Blues and win the Capital One Cup - now he's their great hope
The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?