It seems the best way out at the time. Under pressure, you set up a commission to let you duck the awkward questions. Unfortunately, the commission develops a life of its own, and whether it’s called Leveson or Tyrie, all too soon it’s back with an answer you really don’t want to hear.

Andrew Tyrie’s enquiry was set up to fend off the attacks following the Libor scandals, and like Leveson, the inquisitors couldn’t resist poking into the whole industry. Indeed, it appears that only fear of being seen to have gone too far prevented Tyrie’s tirade from calling for the break-up of the Royal Bank of Scotland. If George Osborne did have some idea of what to do with  RBS, his Mansion House speech made it clear that he hasn’t a clue now.

As CEO, Stephen Hester’s responsibility was to all shareholders, and if he believed that splitting the bank would damage the minority’s interests, he couldn’t agree to it. UKFI, the body holding the state’s share in RBS, had to believe two mutually contradictory aims, so it’s hardly surprising that it has been useless.

The Chancellor will do whatever he thinks will help his re-election (because that’s “in the public interest”) but at least the idea of dishing out soup coupons marked RBS seems to have gone away. The bank is unsaleable in its current form.  The minority shareholders now have to wait and see whether there is any value for them from trying to get bankers to operate for the benefit of the customers, rather than the other way about. Best of luck with that.

Displacement activity

If Mr Osborne’s displacement activity was the Tyrie commission, then the prime minister’s is the call for a crackdown on international tax avoidance. Not quite illegal (that’s tax evasion) tax avoidance is merely somehow unsporting, like hitting low-flying birds. The rule which allows companies to set interest costs against taxable profits is the low-flying bird for the private equity industry; structure your company with enough debt, and corporation tax disappears.

Without this device, the returns from private equity are much like other equity investments. But that’s not why we load up with debt, says Tim Hames of the industry’s trade body. “It is wrong to suggest this policy is used for tax avoidance”. Sadly, he couldn’t find the space to say what else it’s used for, or to explain the beneficial effect of high gearing on options awarded to the private equity partners.

High gearing here does not necessarily mean high risk to the shareholders if they structure the debt to favour them. For example Borealis, in the frustrated bidding group for Severn Trent, is a shareholder in Scotia Gas, UK pipeline operator. The shareholders have kindly advanced loans to Scotia – with a coupon of 12.5 per cent.

Actually dealing with this sort of avoidance, as the Prime Minister has been advocating this week, is more difficult than describing it. If interest was not tax-deductible, the avoidance machine would move on, perhaps to leasing or renting. The textbook answer is to cut the rate of corporation tax, but as Mr Cameron can point out, the UK has been doing that aggressively ever since he came to power, with little apparent impact on the likes of Google or Starbucks. No wonder he’s looking for some displacement activity.

No touting here, thanks

Ah, the sounds of summer: rain falling gently on sleeping bags, soggy strawberries, and the dulcet tones of the ticket touts, or market-makers as they’re called in another part of town; yup, it’s Wimbledon fortnight. The traditional crackdown gets tougher each year, and for many of these entrepreneurial individuals, it’s no longer worth the bother.

This is a shame. Market-making is one of London’s skills, but the All-England Club refuses to see the value in matching willing buyers and sellers. Unfortunately, the practice of altering the price in the middle of a trade, not always to the customer’s advantage, has given this exchange a bad name.

The answer is for the club to take control. The airlines have educated us into understanding that the same product can sell at different prices, and with a little outside advice the club could capture the touts’ profits and make the process transparent. What’s not to like? Or love, even.

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