The MT Diary

Branson's snowstorms; Blackpudlians in bed with bishops; Gordon's tartan Budget.

by Howard Davies
Last Updated: 31 Aug 2010

For a few years in the mid-90s, my children were obsessed by SimCity, a computer program that allows the user to design the city of the future. When you get the combination of buildings and services right, little Simizens turn up and populate your creation. But if you forget, for example, to fund the fire brigade properly, whole city blocks go up in flames and a dystopian urban nightmare takes shape.

Whoever plans Dubai must own at least a 7.0 version of SimCity - one with an option that allows you to build on the water. On a recent trip, I flew over Palm Island and the Map of the World, a constellation of manufactured sandbanks on which, if you have a few million dirhams to spare, you can build a self-contained mansion, with its own desalination plant and hydrofoil jetty.

Sounds wonderful, until you learn that your next beach neighbour might well be Richard Branson. Can you take the risk of him popping over on a Sunday morning for a cup of sugar, or the loan of your beard-trimmer? I think I'll stick with my sodden field in wildest Dorset.

The Branson-Murdoch TV spat has been one of the joys of this uncertain spring for the neutral observer. And no references, please, to Dr Johnson's injunction on disputing the precedence between a louse and a flea. Our family's experience of NTL, now Virgin Media, has been that channels go dark or transmit snowstorms at regular intervals, so a few more disappearing from the spectrum went unnoticed.

But we did note that the price didn't go down as a result, and that, when we looked, there were better deals available elsewhere. We were shaken out of our 'inert consumer' posture.

So, sadly, we shall not be contributing our mite towards the holiday island off Dubai. One fewer Cornetto for Sir Richard and his guests, maybe.

It's a pity that Blackpool, where Cornettos can be sold without refrigeration for 10 months of the year, hasn't come up with a Dubai-style wheeze. Famous for fresh air and fun, as the poet has it, but also for run-down boarding houses and dodgy Scottish tenners in the pubs, it has been in need of a new idea ever since the decline of the Wakes Week holidays in the 1950s. Its good burghers thought the mega-casino could be just the ticket, but an obscure government-appointed committee was not persuaded. Manchester got the nod instead.

But the Government underestimated the low cunning of the Blackpudlian, and was ambushed in the Lords by an odd alliance of seasiders and bishops, who blocked east Manchester's casino and sent culture secretary Tessa Jowell back to the drawing-board, the crap table or wherever the Government's weird and wonderful gambling policy is dreamt up.

You would have to be hard-hearted indeed not to get some innocent pleasure from that embarrassment for HMG. Will Gordon Brown wish to breathe new life into this dead parrot of a policy? I expect a move from the drawing-board to the back-burner.

One clue came in the Budget, which was not friendly to the gamblers or 'the gaming industry', as we are invited to call it. Remote gaming duty was set at 15%, higher than expected, and the revisions to onshore gaming duty scrapped the lower rate and added a new 50% band for high-rollers. Nor was there any relief for housey-housey, 'the bingo industry'.

The lobbyists were disappointed, though why they expected any largesse from the Iron Chancellor is unclear. He doesn't look like a man who orders in a deck of scratchcards with the Irn Bru and the deep-fried Mars bars for a night at home with Sarah, Ed and Raith Rovers.

And in any case, he had bigger fish to fry this year. The Budget was a very complex production: a push-me-pull-you package with lots of one hand giving back and other hands picking pockets. The net of it all, in terms of the fiscal balance, was almost exactly zero - so why the fuss?

Well, after 15 years of uninterrupted growth, with a house-price boom still under way and no election in prospect, a touch on the fiscal tiller leading to half a notch of belt-tightening might have been a wiser option. Did I say 'no election'? Not this side of the border anyway. Was this, in fact, a Budget for Scotland?

If governments now have to dance to the Scottish Parliament's tune, as well as Westminster's, there may never be a good time to tighten fiscal policy in future. The Bank of England will have to work that much harder to keep inflation under control. Thank goodness there are no Scots on the Monetary Policy Committee (MPC): no-one who has outed themselves, anyway.

This month marks the 10th anniversary of the formation of the MPC. It remains Brown's greatest achievement. Surely a celebration would be in order. Perhaps 6 June (when the first proper meeting took place in 1997) could become a national holiday on which effigies of Baroness Thatcher and others who refused Bank of England independence could be burnt on a bonfire of price and income controls. The governor could process through his home town of Birmingham on a white horse. An anthem, 'Two per cent: nor more, nor less', could be commissioned from the Master of the Queen's Musick. Beacons could be lit ... (That's quite enough - Ed). - Howard Davies is the director of the London School of Economics.

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