The.Economist.2007-02-10 (966424), страница 23
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When the group re-floated Debenhams in May 2006 they quadrupled the£600m they had invested in it, partly by cutting its capital spending sharply. Those (mainly institutional)investors who took it off their hands have fared poorly: Debenhams' shares have fallen by 14% since theydid. Buy-out firms may try to repeat the trick with Sainsbury's and slash spending.
If they do, they willprobably find themselves learning the lesson Mr Sainsbury mastered in 1882: that grocers fare best whentheir stores are a treat to be in.Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.About sponsorshipBird fluUnruffledFeb 8th 2007From The Economist print editionAFPMoney—not health—is most at risk from Britain's first big bird-flu outbreakGet article backgroundTHE relentless westward march of avian flu from its Asian home had, until last week, left Britain mostlyuntouched. A dead swan washed up on the Scottish coast was found last April to have died from the H5N1 strain,the most virulent version of the disease.
Later that month an outbreak of the less worrisome H7 strain led to theslaughter of 35,000 chickens in Norfolk. But when on February 3rd laboratory tests confirmed that thousands ofturkeys at a Suffolk farm had died from H5N1, Britain's first big outbreak had begun. Over the next few days,officials culled almost 160,000 birds that might have been exposed.Disappointingly for a disaster-hungry media, the government seems to have handled the problem well. An earlymisidentification of the disease as a relatively harmless bacterial infection was quickly corrected. A restriction zoneof 2,100 square kilometres (807 square miles) was placed around the farm, requiring other poultry farmers toisolate their flocks from wild birds and ask for permission before moving them.
Worries that the disease mightspread to humans remain just that; although a vet and a poultry worker have been taken ill with flu-likesymptoms, both were later given the all-clear.The most damaging effects are likely to be economic. The farm is owned by Bernard Matthews, one of the biggestpoultry producers in Europe. Decades of homely advertising have made the company—which had sales of around£400m ($740m) last year—a household name. Yet it has been plagued of late by image problems. One of itsproducts—the Turkey Twizzler—became a byword for the cheap junk-food fed to many British schoolchildren andwas eventually discontinued. Two of its workers were convicted of animal cruelty last year.The bird-flu outbreak has provided ammunition for opponents of industrial farming, who argue that crampedconditions make it likelier that fowl will catch a disease.
Others maintain, however, that intensive farming makes iteasier to keep birds away from wild animals that may carry the virus and to contain any outbreaks that do occur.Britain's poultry producers—who earn some £3.4 billion a year—are looking fearfully at France, where a similaroutbreak last year led to a 30% drop in sales.
Yet so far shoppers seem unruffled. Supermarkets report noperceptible change in sales, and the National Farmers' Union says the same seems true of wholesale markets. Butforeigners are taking no chances: as The Economist went to press 13 countries (including one EU member,Ireland) had announced restrictions on poultry imports from Britain. Total sales abroad normally bring in some£400m a year.Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.About sponsorshipPublic-sector efficiency driveFlaky figuresFeb 8th 2007From The Economist print editionMore doubts emerge about claimed savingsEVER since the Labour government started spending like a drunken sailor, ministers have felt vulnerableto the charge that they are securing poor value for taxpayers' money.
In July 2004 Gordon Brown made apre-emptive strike by announcing an efficiency drive. The chancellor of the exchequer endorsed the aim ofmaking annual savings of £21.5 billion by 2007-08—worth 7% of departments' current spending. Theefficiency gains would be ploughed back into “front-line” public services, he said.The target sounded ambitious, but Mr Brown's pre-budget report in December revealed encouragingprogress.
Annual efficiency gains already amounted to £13.3 billion. The government was thus well on theway to achieving its objective for the next financial year.The National Audit Office (NAO) punctures the chancellor's optimism in a report published on February8th. The auditors vouch fully for only a quarter of the economies claimed by Mr Brown. They are dubiousabout half the savings, which “represent efficiency but carry some measurement issues anduncertainties”. And in effect they rule out the remaining quarter of efficiency gains, saying that theseeither have not been demonstrated yet or may be substantially incorrect.Even this downbeat assessment is more favourable than the NAO's first look at the efficiency drive a yearago, which concluded that all the reported efficiency gains should be treated as provisional.
At that stage,many projects covered by the drive had not even established baselines against which the supposedefficiency gains might be counted. That glaringly obvious deficiency has now been put right, but doubtsabout the exercise persist.For one thing, there is nothing new about efficiency drives, which featured regularly under the previousConservative government. In a striking continuity, John Oughton, the man in charge of the programme atthe Treasury, was head of John Major's “efficiency unit” between 1993 and 1997. Furthermore, a bigchunk of the economies would have happened anyway because of previous investments, for example ininformation-technology projects that can slash costs.
These savings are counted in the tally, yet thecapital expenses are not taken into account.A larger worry is whether the efficiency drive can succeed, as ministers intend, without harming thequality of public services. The indicators used to monitor quality are often too broad-brush to pick up thespecific impact of the cost-saving measures. The government is cutting the number of civil servants at thedepartments that collect taxes and administer welfare, but this could prove a false economy if it results inrevenue losses and overpayment of benefits.What is not in question is that the target will ostensibly be met. At some stage in the next year or so, MrBrown will trumpet the claim that the government has achieved the full £21.5 billion of savings.
Sadly,few people will believe him.Copyright © 2007 The Economist Newspaper and The Economist Group. All rights reserved.About sponsorshipThe attorney-generalIn the firing lineFeb 8th 2007From The Economist print editionThe top law officer's role is under challengeLORD GOLDSMITH, the attorney-general, is under fire from all sides. In the past week the House of Lords,the House of Commons and the Commons' select committee on constitutional affairs have all devotedspecial sessions to scrutinising his role. The tensions inherent in his dual responsibilities as bothgovernment minister, on the one hand, and independent guardian of the public interest and the rule oflaw, on the other, are no longer constitutionally sustainable, says Lord Falconer, the Lord Chancellor.Harriet Harman, the constitutional-affairs minister, called this week forthe attorney-general's normally confidential advice to government to bemade public.
“For public trust to be maximised, secrecy must beminimised,” she said. The Tories want a more accountable and lesspolitical attorney-general. The Liberal Democrats would like to see hisfunctions split between an elected minister responsible for the justicesystem and an attorney-general outside parliament who would be incharge of prosecutions.
Gordon Brown is reportedly considering a radicalreform of the office if he becomes prime minister.PAThe ambiguities of the attorney-general's dual role have long been thesubject of controversy, not just in Britain but also in the manyCommonwealth countries that have adopted a similar system. But threeissues have brought matters to a head: the continuing dispute over LordGoldsmith's secret advice to government on the legality of the Iraq war;his likely involvement in any decision to bring charges in the cash-forhonours affair; and his suspected role in the decision to drop criminalproceedings against BAE Systems for alleged bribery in its Al Yamamaharms deal with Saudi Arabia.Lord Goldsmith continues to insist that the decision in the BAE case—which in fact was taken by the Serious Fraud Office (SFO)—was correct. Fending off his criticsIn deciding whether to bring any prosecution, two factors had to betaken into account, he said in the Commons committee hearing on February 7th: the strength of theevidence and whether prosecuting would be in the public interest.
In the BAE case, Saudi Arabia, a crucialpartner in Britain's war against terrorism, had threatened to cut off all intelligence co-operation withBritain if investigations continued. British lives were at risk. The public interest outweighed the desirabilityof prosecuting alleged bribery.Certain offences cannot be prosecuted without the attorney-general's consent. They include offencesunder the Official Secrets Act, international terrorism and certain types of corruption, especially thoseinvolving public officials. Which of his hats would Lord Goldsmith don if the Crown Prosecution Servicedecided to prosecute ministers in the cash-for-peerages matter, MPs asked: that of loyal cabinet colleagueor independent law officer? Lord Goldsmith repeated his pledge to seek advice from independent legalcounsel and to publish that advice in full in the event of a decision not to prosecute.His reply nevertheless amounted to an admission that his role can involve serious conflicts of interest, andthis is an increasing problem as his role is perceived to be growing more politicised.
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