View from City Road: Useful experience of infighting

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The Independent Online
Jonathan Aitken does not bring a glowing City reputation to the post of Chief Secretary to the Treasury. Rather, he is best remembered for the longest-running soap opera of the Square Mile, the squabbles of a little financial services group called Aitken Hume International, which he founded with his cousin, Timothy.

To be precise, Aitken Hume was not in the City but just outside it, on the southern fringes of Islington. But it provided entertainment of a high order, though small importance, as Jonathan, Timothy and a string of aspiring financial high-flyers played out their dramas and departed one by one.

Having wine thrown in his face by Anna Ford was surely nothing compared to the emotional traumas of the Aitken boardroom over the years. Jonathan, the chairman, stayed longest, and did not quit as a director until 1992 as a result of his move into government.

Of course, a chief secretary's job is to control public spending. Experience of infighting with senior colleagues is therefore a pretty useful qualification. Perhaps the markets should read Mr Aitken's boardroom record as a hopeful sign that he can fill Michael Portillo's shoes.

The departure of Stephen Dorrell from the post of Financial Secretary should be of rather more immediate concern to the City.

Mr Dorrell is the minister charged with reviewing savings. He has stirred up a hornet's nest with his criticisms of the high level of dividends paid by British companies and been accused by Lord Hanson of sounding like a Labour politician. The review could be a prelude to another Budget attack on the tax privileges of pension funds.

However, a great deal of lobbying has been done to persuade Mr Dorrell, an open-minded sort of chap, to adjust some of his flakier early ideas about the way financial markets work. Those who have been in to see him recently report that his grasp of the complexity of the relationship between dividends, taxation, pensions and corporate investment has improved enormously.

Now the lobbying process has to begin all over again with Sir George Young, Mr Dorrell's replacement. He has always been known as a wet, and is said to have a social conscience despite an unfortunate remark about beggars being the sort of people you step on when you come out of the opera, not to mention his recent pronouncements on single mothers.

But his thoughts on such technical matters as pension funds and dividend payments are anybody's guess, even if he has bothered to contemplate the subject at all. The City has until the September pre-Budget Treasury meetings at Dorneywood, when the tax options will be set out, to get Sir George on side.