There is still time, if he is quick, for BHP’s’ chief executive Andrew Mackenzie to make a virtue of necessity. The company’s dividend is clearly unsustainable, and trying to pretend otherwise threatens to do more harm than good to the business. Just how unsustainable is shown by the historic yield of over 10 per cent with BHP shares at £8. No share anywhere has a sustainable yield in double figures.

Mr Mackenzie has a choice. He could cut the payment, accompanied by the usual blather about a new base dividend, confidence in future increases and more talk about how BHP is such a low-cost producer that everyone else will fall down first. Since metal prices have confounded all the big miners, we should take his predictions with a tonne of $40 iron ore.

However, should he say instead that the Samarco dam disaster is deeply shocking to such a responsible company as BHP, that lessons will be learned, and that it would be most inappropriate to pay dividends until they have been, he might just manage to keep BHP’s credit rating, the company’s reputation in Brazil, and his job. Better get on with it, though.

One of these prices is wrong

It seemed like a good idea at the time. The Enquest 5.5 per cent 2022 retail bond had fallen to £65. It would repay £100 in seven years, with a yield of 8.5 per cent in the meantime. What could possibly go wrong?  The oil price, that’s what. It carried on down, and Enquest, a sort of North Sea scavenger, has carried on down with it.

The retail bond can now be picked up for less than £40, a price that says us holders won’t see £100 in 2022, or at all. Next month’s update will make pretty grim reading, since at $40 the oil price now barely covers the marginal cost of getting the stuff out, let alone contributing to any return on the sunk capital. Yet if the bonds are worth less than half par value, surely the shares should be worthless?  They did come down with a bang last year, but at 23p Enquest is still capitalised at £180m, implying rather more than option value for the equity.

This disconnect between bond and share markets is not that rare. Gulf Keystone Petroleum’s bonds have been signalling corporate distress for months, yet it’s only this week, as the Kurds missed an agreed payment for GKP’s oil, that the share price finally fell below 20p. The company is still capitalised at £200m. As with Enquest, either the bond prices are wrong, or the share prices are..

.No point sugaring this pill

“The collection of any taxes which are not absolutely required, which do not beyond reasonable doubt contribute to the public welfare, is only a species of legalised larceny.” Little has changed since President Calvin Coolidge argued thus nearly a century ago. As chancellor, Nigel Lawson had an admirable policy of scrapping at least one tax in each Budget – abolishing capital gains tax on government securities actually increased revenues, thanks to gilts’ long-term bear market.

None of his successors has seen fit to follow, and it’s dispiriting to see the Financial Times advocating yet another new tax. The latest suggestion for “legalised larceny” is the proposal for a sugar tax, dressed up as a contribution to the public welfare by the Commons health committee. That the committee also wants to control all “unhealthy” food and drink betrays just how much the members are itching to tell us what to do.

Specific taxes are nearly always a bad idea. They raise little, have marginal impact unless applied at tobacco-sized draconian rates, and are expensive to administer. Even defining a plastic carrier bag took four parts, 19 paragraphs and seven schedules. We British do indeed eat too much sugar – we eat too much of almost everything except fruit and green vegetables. Lawson’s mantra says that taxes should be simple, low and compulsory. That is a case for imposing VAT on all food, as other countries have done without starving the poor, but a sugar tax would be a bad precedent for a negligible impact on our excess avoirdupois.

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