THE MT DIARY: Howard Davies

Fuelled by a Shell power breakfast, our diarist ponders top-up fees and a Tory revival.

The Hansard Society publishes useful research on the workings of the British constitution. A recent paper, for example, discussed the accountability of regulators. The Society also aims to promote more constructive working relationships between government, parliament and business. To that end, Richard Holme, the Liberal Democrat peer, organised a breakfast at the top of the Shell Centre, hosted by Clive Mather, the boss of Shell UK.

The first two speeches, by Clive himself and George Cox of the IOD, were excellent. Modesty forbids any comment on the third con- tributor. The fourth speech may be quickly summarised, since Nigel Griffiths, the Consumer Affairs minister in the DTI, did not show, and nor did his promised replacement.

Some around the table took this as good news. Perhaps the DTI had been abolished? Sadly, this was not the case. In the absence of the DTI, agreement was reached around the table on the need for pre-consultation on major pieces of legislation, and on the benefits of pre-legislative scrutiny committees involving members of both Houses. The breakfast was good, too and, in the minister's absence, we all had a little more.

Oliver Letwin, by contrast, did turn up, precisely on time, for a rigorous examination at the LSE. And the timing, just a few days before the assassination of IDS, could have furnished a reasonable excuse.

The audience was too polite to ask about his views on Lambeth secondary schools, but he faced an inquisition on the different roles of equality and equity in Conservative social policy and on the whereabouts of the mysterious island on which asylum seekers will be assessed. On that we emerged none the wiser, and X still marks the spot. But we did learn that the adjective from chimera is chimerical. Only Oliver Letwin has that word as part of his active vocabulary on the hustings.

A future prime minister? No way, he say. He would like to be Home Secretary and Chancellor, however. I suggested that, even for a man of Letwin's intellect, holding down both jobs could be a stretch. He clarified that these ambitions are sequential - good news for his colleagues.

Michael Howard looked suitably sphinx- like at the JP Morgan dinner marking the opening of the National Art Collections Fund exhibition at the Hayward Gallery, London. (There must be an adjective derived from sphinx, but sphincterical doesn't sound quite right for the leader of the Opposition).

Margaret Thatcher was there, too, but none of the three intervening leaders, who were now, we learn, working the night shift. The polls still suggest that dawn's rosy fingers remain, shall we say, chimerical. But the Party may at least have got to the first law of behaviour when in a hole.

The university world, while politely interested in the Tory leadership change, is - as you might expect - more worried about the Government's proposals on top-up fees.

This is an odd debate. The phrase 'top-up fees' is highly misleading.

It's proposed that students no longer pay an up-front fee of £1,100, but should repay up to £3,000 from earnings after graduation. So the word fee is confusing. And as for 'top-up', the maximum allowed is still well below the cost of delivering a university education, even taking the Government's grant into account.

The second odd feature is the party line-up. In the red corner are the Liberal Democrats, committed to funding expansion of higher education through a 50% tax rate on high earners. In the pink corner are the Conservatives, against any concept of fees and, again, committed to support through public spending - though with no commitment to further expansion. In the blue corner we find Labour, committed to raising more money directly from those who earn a degree.

This topsy-turvy line-up has confused backbenchers in each party. A genuinely free vote would produce a fascinating snapshot of parliamentary opinion.

Would there be more Blairites on the Conservative than on the Labour benches?

It would be a close run thing, I suspect.

I imagine that Michael Green and Iain

Duncan Smith are not natural bedfellows. But they may have experienced a sense of fellow feeling, as both were unceremoniously ejected under mysterious voting procedures.

For some time, the observation that shareholders must accept their responsibilities and vote their shares has generated a murmur of assent around City dinner tables, perhaps because the alternative was seen as some kind of Government intervention. But when shareholders flex their muscles, the table becomes more pensive.

Who are these fund managers, they ask, who think they have the right to overrule a board? That is quite easily answered. They put up the money.

But a second question is trickier. How do these people reach their views, and how do they account for them to the people who really own the shares, and on whose behalf they are acting?

I suspect that shareholder activism is here to stay, so fund managers will need to produce a better answer to that question than they have so far offered. It may be no consolation to Green, but his downfall has focused attention on just how fund managers make their decisions, which will be beneficial to the markets in the long run.

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