Howard Davies: Hollande's joke bites back

MT DIARY: Singapore gets ready for the GP, history according to the ONS and the radio interview that left me lost for words.

by Howard Davies
Last Updated: 03 Oct 2014

I find it surprising that Singapore is prepared to carve up the central business district with tall steel fences and crash barriers, making it impossible to walk from hotel to office, in the interests of staging a Grand Prix. But the Singaporeans are the most rational people on earth. They make the Swiss seem impulsive and happy-go-lucky. So I guess they have worked out the positive Net Present Value of hosting a Formula 1 race in their usual careful way.

Since Singapore is also one of the cleanest cities anywhere, it must double its transport carbon emissions for the year. Ecclestone Inc have just woken up to the fact that their 'sport' is the least environmentally friendly activity you can imagine. Their response, however, seems rather to miss the point. They have set up a new Formula E (for electric) series of races, in addition to the noisy ones. Since the electricity to power the batteries must come from somewhere, and they don't carry a portable wind farm around, that must make their carbon footprint even heavier. Though I guess it does show they have a sense of humour.

If you can hear what people say above the noise of the cars, the economic mood in southeast Asia is not so positive. There are worries everywhere they look. The Hong Kong democracy movement could have unpredictable consequences, no one knows quite what to make of the new Indonesian president, the new Indian government is still an unknown quantity and the Chinese financial system is going through one of those phases when it emits steam and odd cranking sounds.

Financial repression, which involves holding bank deposit rates below inflation (sound familiar?), is having some exotic consequences. The internet group Alibaba launched a mutual fund last year that attracted $92bn in 12 months from savers desperate for a better return than they get from their bank. The financial crisis has rightly caused us to be anxious about deep pools of liquidity sloshing round the system, and this is one in which many financiers could easily drown. So the prudent Singaporeans are nervous.

Nervous doesn't quite capture how the French feel, of course, as unemployment continues to rise and confidence in the government plumbs new depths never seen before in the Fifth Republic. Even in the US the mood is very cautious. Unemployment isn't coming down as rapidly as expected. Indeed, the UK is now easily the most cheerful place I spend time in. The good news just keeps on coming. Why does that make me feel anxious? What are we doing so right, and can we continue to keep our heads while all around are losing theirs?

Part of the answer seems to lie in the Office for National Statistics' fascinating exercise in rewriting history. It turns out that the 2007 boom was nothing like as booming as we once thought, and the subsequent bust was therefore not so catastrophic. Maybe Gordon did abolish booms and busts after all. So some of the puzzle as to why unemployment didn't fall further and why productivity seemed so weak has been adjusted away by the stroke of a statistician's pen.

But we are still doing better than expected, given all the clouds on the horizon, in Asia and Ukraine. Another bout of sterling weakness, thanks in part to the Scots, has helped, and the Bank of England has been very accommodating. George Osborne seems to have that quality Napoleon most valued in his generals: luck. The prime minister must hope he stays lucky for another eight months.

Francois Hollande could do with a bit of what George has got. Mrs Osborne wrote a rather entertaining book about one of her errant ancestors called The Bolter, but shows no sign of doing a runner herself, while Valerie Trierweiler both bolted when she learned about her rival, Julie Gayet, and returned uninvited six months later with a kiss-and-tell blockbuster that is flying off the shelves in Paris, while the French pride themselves on focusing on 'the issues' and not on their politicians' private lives. Tosh.

The details of Francois and Valerie's fights over sleeping pills are unseemly and unsuitable for a newspaper that your wives or servants might read. Mme Trierweiler has done herself no favours there, and Hollande will survive those stories. But real damage has been done with her revelation that the president talks of the poor as 'les sans-dents' - the toothless ones, and is very amused by his clever little joke. For a man who once said he didn't like rich people, this is a touch awkward. The phrase 'les sans-dents' has since gone viral to the left and to the right of him. 'Better no teeth than no balls' is the cry from the grass roots, and I think it is not intended as a comment on the electoral chances of our own shadow chancellor.

Meanwhile, my Airports Commission carries on commissioning. We decided to leave the wading birds unmolested on their marshes, which did not thrill hizzoner the Mayor, but was welcome to Kentish men, and probably to men of Kent, for all I know. I fear my name may have dropped off the City Hall Christmas card list as a result, and if an e-card does find its way into my email box from that quarter, it is more likely to be loaded with a lovebug virus than with love and kisses. One unusually empathetic radio interviewer asked me what I had done in a past life to deserve this job. I couldn't think of a witty answer, or indeed any answer at all.

Howard Davies is the chairman of the Airports Commission. Follow him on Twitter at: @howardjdavies.

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