The Evil Diaries: Bang on the Hutton

Evil discusses Will Hutton’s Selling Off Britain…

On Saturday evening I tuned in to concentrate on Will Hutton querying the absence of representation of the public interest when foreigners take over UK-based incorporations which Hutton thinks are of national significance.

There is a considerable sympathy vote for such enquiry since various journos keep banging on about the lack of wisdom etc. etc.. Quotes include that takeovers by foreigners remove “the very marrow of our nation” and “giving up the social glue that holds this together” – I am not making up this twaddle. However, the journos never set out a proper measurement of the relevant criteria and therefore the chance of any realistic assessment of their proposals is difficult, probably impossible.

Of course, there are journos such as Brummer of the Daily Mail who bang on about the iniquity of these takeovers. But he is only put up to it by Dacre since Dacre knows that a majority of the Daily Mail’s readers, potential and in fact, are against such takeovers. This is hardly science in action but merely populism.

Hutton’s position is different. He has been a stockbroker and must know something of capital markets. He is however a New Labour yapper and, although now the principal of Hertford College Oxford, has got a fixation which he has yet to grow out of.

For instance, on Saturday evening, he banged on about the Cadbury takeover by Kraft, now known as Mondelez. He tried to develop the idea that this was a destruction of working Britain etc. etc.. But I well recall this balance sheet which was virtually nil net tangible assets with £10bn of goodwill/brands value stuck on top.

I think chocolate is a cretinously simple business to reconstruct and I respect Warren Buffett’s comment (he was a Kraft shareholder) that he doubted this takeover. Put another way, Buffett foresaw Cadbury being replicated. So Hutton was really trying to engage, albeit incompetently, in populism. He should know better.

He also covered the water industry and claimed that Britain had given these profits away. It is impossible to argue that this is the case since water profits are decided by the regulator, Ofwat. If selling prices are too high the cash shows up in the accounts and a lot of squawking breaks out. If prices are too low water companies cease to invest for the future production of water and will be given a kiss and make up cuddle from Ofwat. In short these companies are inevitably monopolistic in nature and, like all monopolies, readily debagged. Hutton should think again.

Curiously, he had no sooner demonstrated his incompetence than he strayed into considering some engineering business based around Silverstone which is clearly adding value and making a lot of money. Hutton applauded this company. He should do so because Brits are good at imaginative engineering and simply not competitive at putting wrappers on chocolates.

Hutton is, as I noted above, a yapper. This does not of itself matter as long as people do not get taken in.

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I do not know whether this is in fact the case (I find it hard to believe) but I have just read that chicken sexers get paid £40,000 p.a.. The work is stunningly boring but extremely simple. The successful incumbent feels the genitals of the chicks and chucks out males. That’s it. Possibly there is hope for Hutton.