The Clinton administration knew it had lost the game with Congress by early Monday evening. It was not long, however, before the complainers were shuffling into line.This had not been a common European opposition front – something the Europeans find difficult to muster at the best of times. The finality of the American administration’s presentation of the new Mexico rescue package caught not a few European central bankers on the hop.Words such as unhappy and premature were to be heard early yesterday morning in London, Paris or Frankfurt, about the sudden transformation of the grand American rescue package into something with dominant international participation. But then to refer on that basis, Mr Heseltine is going to have to rewrite policy.Europe caught on the hop There was that unmistakeable sound across Europe yesterday of out-of-joint noses being straightened. To take decision making away from the region and relocate it in an anonymous London head office is hardly likely to be in the region’s interests. There are no competition issues in this case but there are other issues of regional and public interest. Northern Electric is one of the few public companies based in the North-east.

Provided competition is not diminished, anything goes, has been the guiding principle to date. The parallel here is with the rash of TV bids last year, where in each case undertakings were given to the DTI to address legitimate competition concerns.That is not to say there is no case for reference in this instance. To do so, however, Michael Heseltine, President of the Board of Trade, would have to depart from the usual parameters of mergers policy. Utilities throughout the world are owned by conglomerates like Trafalgar House. Generally they run them just as effectively as the highly remunerated managements of our own independent regional electricity companies.Provided alternative safeguards are put in place to protect the legitimate interests of the regulator – separate accounts and an independent board – there seems no necessity to follow this route. What sort of price could an enforced minority command? Not much, is the answer It would be like paying a pound for 50p.

The idea that a utility needs in some way to be independent to be adequately regulated is equally absurd. To allow Professor Littlechild to construct alternative versions of the same thing would achieve nothing and be against most principles of private sector ownership.The notion that any company would buy another and then float 25 per cent is absurd. Either the privatised utilities conform with the usual practices and disciplines of the private sector, which means living with the threat of takeover, or they do not. If it is thought against the national interest that they do, then they should not have been privatised in the first place. The golden share, designed to give the utilities protection from takeover, was always meant to be of limited duration It has now expired. No doubt it would, but does a regulator with far greater powers of discovery and access than ordinary shareholders really need the assistance of a minority to do his job?Those who believe that utilities are best part of the private sector, as presumably Professor Littlechild does, cannot have it both ways. The existence of minority shareholders would be a powerful safeguard, seems to be the thrust of his thinking.

His concern is to ensure that Northern Electric is ring-fenced after the takeover in such a way that Trafalgar will not be able to pull the wool over his eyes by deliberately understating profitsor siphoning off cash to the detriment of the business and its customers. Fortunately for Trafalgar, few people at the Department of Trade and Industry do, for if it were given the official stamp of approval, it would undoubtedly be a deal killer.The electricity regulator’s motives are reasonable enough. The idea is so off the wall that it seems hard to take seriously. With the next Budget certain to see the Government attempting to deliver on the Tories’ 1992 election pledge, lower taxes, the case for cooling the economy radically ahead of the giveaway becomes overwelming.
Inane idea from Professor Littlechild The inglorious and relatively brief history of utility regulation is already littered with enough silly ideas and initiatives to fill a book, but few are quite as inane as the suggestion from Professor Stephen Littlechild that Trafalgar House, after it has bought Northern Electric, be made to refloat a minority shareholding in the company. The Chancellor will in any case have to raise rates soon as part of his planned and orderly approach to countering the inflationary effects of runaway growth He might as well do it now as later. Kenneth Clarke, the Chancellor, invariably attends his monthly meetings with Eddie George certain in his knowledge of what the Bank Governor will say – and that is not just because the Chancellor is a good reader of minds His officials will already have prepared the ground Today’s meeting could, however, be a different matter.

Last night’s half-point hike in American interest rates may have been well anticipated by the markets, but it will none the less concentrate minds at a meeting that would otherwise probably have had the Governor and the Chancellor in agreement on keeping UK interest rates unchanged for the time being

Now there is a new factor to take into account. However, the devaluation is expected to hit future earnings, Mr Trotman said.. Its share of the US car and truck market was 25.2 per cent, compared with 25.5 per cent a year ago. And the company’s share of the Western Europe market was 12.1 per cent, up from 11.8 per cent.Income included a one-time gain of $110m from the recent devaluation of the Mexican peso. In Europe, most economies are well into recovery now, and we expect continued improvement.”Last year Ford sold 6.63 million vehicles, compared with 5.96 million in 1993.