The.Economist.2007-02-10 (966424), страница 22
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The Conservatives havehad a clear policy in favour of a largely elected upper house for the past five years, even if plenty of theirMPs feel uneasy about it. Mr Straw prefers a mixture in which half of the peers would be elected and halfappointed (some, as now, by political parties), which sounds like a mess.
But plenty of thoughtful people(many of them in the Lords) are holding out for oligarchy.“Even electing 50% of the Lords would completely ruin it,” argues Lord Lipsey, a Labour peer who onceworked at The Economist. The expertise gathered in the Lords would, he says, be impossible to replicatewith elections. Lord Steel, a former leader of the Liberal Democrats, also argues that the Lords should beappointed from among the eminent in different walks of life, even though his party has long wanted tomake the place democratic (a Liberal government passed a bill in 1911 promising “a second chamberconstituted on a popular instead of a hereditary basis”).
Democracy might even bring the thuggish BritishNational Party onto the red benches. Such arguments were bolstered by a new poll by YouGov for theHansard Society, a charity, which suggests the public do not want a second chamber dominated bypolitical parties, a probable outcome were the Lords to be elected.Want an office to go with that office?Almost all big democracies have bicameral systems (an exception is New Zealand, which did away with itsLegislative Council in 1951). But not all upper houses wield the same power. Some, like America's Senateand Germany's Bundesrat, have real clout and can prevent bad (or indeed good) laws from going beyondproposals.
Others are there merely to advise, revise and slow down the whole lawmaking process.Canada's Senate, whose members are picked by the prime minister and cannot veto laws, falls into thiscategory, as does Britain's House of Lords. The only circumstance in which the Lords can kill a law is if thegovernment tries to pass a bill to make parliamentary terms longer.Powerful upper houses occur in federal states, and they are powerful because their senators are elected torepresent a discrete interest.
Since Britain is not federal, it is not clear whom the elected peers would bethere to represent. And, without a veto, they would be in the odd position of having a mandate from theelectorate but not much chance to exercise it.If, instead of asking who should be there, the question posed is what the Lords are for, most MPs willanswer that the house should remain a place “of temporary rejecters and palpable alterers”, as WalterBagehot, an editor of The Economist, described it in the 19th century. Even ardent democrats like AndrewTyrie, a Conservative MP who worries about power being concentrated in too few hands, do not want it tobecome a veto-wielding rival to the lower house.
And only a few people on the Labour left think the thingshould be scrapped altogether, which would at least be neat.Full democracy makes sense—but only if the role of the Lords changes. There seems little point in electingnew ones, paying their salaries and providing them with offices, just so they can do what the unelected lotare already doing for free.Copyright © 2007 The Economist Newspaper and The Economist Group.
All rights reserved.About sponsorshipA soldier's deathMistaken identityFeb 8th 2007From The Economist print editionThe row over “friendly fire” grows distinctly hostileALL cases of friendly fire are distressing, but when they involve one coalition partner shooting up another,there is anger of a different order. The delay in completing the inquest into the death of Lance Corporal ofHorse Matty Hull, a British soldier killed by American A10 pilots in Iraq nearly four years ago, required anexpression of deep regret by Tony Blair on February 7th.The soldier's family has struggled to find out exactly how he died. ABritish army inquiry in 2004 found more to criticise in the incident thandid its equivalent in America.
Certain material was withheld from thefamily—most importantly a cockpit video of the moments before andafter the fatal attack on Lance Corporal Hull's convoy. The Ministry ofDefence (MoD) denied its existence to his widow while others ingovernment subsequently tried to gain permission from Washington toproduce it.PAShortly before the public inquest began on January 30th, the MoDadvised the coroner that because the video had been classified “secret”by the Pentagon it would not be available for use. The coroner thenadjourned the proceedings in disgust—until the Pentagon was bouncedinto acquiescence when the Sun newspaper published a leaked copy ofthe recording on its website on February 6th.The recording itself is horribly predictable.
Pumped-up pilots—reservistseager for action before returning to base—are misled by controllers intothinking that no “friendlies” are operating in the area beneath them.The pilots convince themselves that the orange panels that mark theMan downvehicles as allies are in fact Iraqi rocket-launchers and begin the attack.Fear and remorse follow when they realise their mistake and its probable consequences.The row comes at a difficult time in the special relationship between Britain and America.
Even supportersof the Iraq war feel let down by the Bush administration's handling of its aftermath. This incident alsorevives memories of a similar tragedy in the first Gulf war, when nine British soldiers were killed by anAmerican A10.Nor does Britain's MoD escape unscathed. Not only is it accused of withholding evidence; it is alsocriticised for failing to produce something more sophisticated than fluorescent markers to protect itsvehicles from friendly fire.That last charge may be a little unfair. Identify Friend or Foe (IFF) systems for ground forces are still afew years away.
And since 2004 the MoD has been trying to find the money to allow British forces tooperate effectively within America's command and control structures. But whatever the technology, thefog of war and the accidents it brings will never be entirely eliminated.Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.About sponsorshipSainsbury'sA trolley too farFeb 8th 2007From The Economist print editionBarbarians at the check-out as private equity prepares to pounce“EXTRAVAGANCE”, said his critics, who predicted failure whenJohn James Sainsbury in 1882 covered the walls and counters ofone of his early shops in rich brown and green tiles, layering thecounter-tops with Italian marble.
But where his detractors sawsquander, Mr Sainsbury's customers saw cleanliness andfreedom from that great bane of Victorian-era shopping: the riskof taking home a mouse with the eggs and milk.More than a century later the family firm faces a similardilemma—whether to invest for the long term or manage forcash in the short term. On February 2nd three of the big namesin private equity, CVC, KKR and Blackstone, said they wereconsidering a bid for J. Sainsbury, Britain's third-biggestsupermarket chain. Texas Pacific Group, another private-equityfirm, joined the CVC group on Wednesday.
Should a formal offerbe made and accepted, the deal could be worth about £9 billion($18 billion), making it Europe's biggest leveraged buy-out todate (see article).Sainsbury's is a tempting target. The firm churns out cash which could usefully be employed in paying offwhatever debt an acquirer piled on to its balance sheet in order to buy it. But the real prize is its propertyportfolio, which has grown in value as commercial-property prices have risen. They went up by 18% lastyear alone.
Selling the shops and leasing them back would not be difficult, given current demand, and itcould produce more than £7.5 billion, says Greg Nicholson of CB Richard Ellis, a property consultancy.But that carries its own risks. Sainsbury's now spends most of its cash, about £700m a year, on buildingnew stores and refurbishing those it already has. Leasing back its shops could add about £350m to itsannual rent bill, while interest payments on the debt that a private-equity buyer would probably saddle itwith might well consume the rest of its cash. That would leave little margin for financing growth or justholding on if competitors slashed their margins and started a price war.People close to the bid say that the private-equity group expects gains from more than just nifty financialengineering. They argue that the buyers would hope to widen the firm's operating margins, which, thoughimproving, are still much narrower than those at Tesco, Britain's biggest supermarket.
One way of doingthat would be to cut costs. Another would be to sell goods with fatter margins such as clothes andwashing machines; Tesco already makes about 20% of its income from selling such non-food items,compared with about 4% at Sainsbury's. But pursuing either strategy at a firm that is well-run alreadywould not be easy. “It's hard to see how much more efficient Sainsbury's could be,” says Tarlok Teji, headof retail analysis at Deloitte, a consultancy.The biggest impediment to a successful deal, however, is timing. The firms circling Sainsbury's would havedone better to bid two years ago, before interest rates started rising and after the company posted itsfirst-ever loss.Since then Justin King, appointed chief executive in early 2004, has turned around the company andhalted the fall in its market share.
Sales in the last quarter of 2006 were a respectable 7% up on a yearearlier, compared with a 4% increase for supermarkets as a whole. That has helped lift its share price by65% over the past year. At this level, private-equity buyers would struggle to make the returns—at least20%—that their investors usually demand.Clued-up institutional investors are another obstacle to the success of the deal.
They are learning the wilyways of buy-out firms and some have realised that existing bosses can re-engineer their own company,shifting the gains to public shareholders rather than to private-equity investors. Sainsbury's, for instance,could easily respond to a buy-out bid by selling properties and passing the profits on to shareholders,points out Neil Darke, an analyst at Collins Stewart, a stockbroker.Institutional investors have also learned to kick the tyres and look under the bonnet after their experiencewith Debenhams, a department store that was bought out in 2003 by a group of private-equity firms thatincluded CVC and Texas Pacific.
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