No Such Thing As Society by McSmith Andy

Author:McSmith, Andy [McSmith, Andy]
Language: eng
Format: epub, mobi
Publisher: Constable Robinson
Published: 2010-12-15T22:00:00+00:00

In 1976, the Labour government had passed a law to break up such cartels, and the Office of Fair Trading (OFT) had pronounced that the Stock Exchange’s protective demarcation lines were illegal. This led to a seven-year legal stand-off, until Parkinson sent for Sir Nicholas Goodison, the chairman of the London Stock Exchange, and offered a deal: he would instruct the OFT to call off its legal action if the Stock Exchange could come up with a reasonable scheme to set its own house in order. The only catch was that he wanted a reply before July 1983, when the Commons started its long summer break. Sir Nicholas knew a good offer when he saw one. It was very likely that the Stock Exchange would lose the court case that OFT was bringing, which was due to be heard in January, and would have to disentangle its centuries-old customs in one chaotic Big Bang. After consultation, he came back to Parkinson and said that the Stock Exchange would comply with the law, and organize its own Big Bang, but not yet. Instead of doing it almost overnight, as Wall Street had already done, they would have a gentle three-year changeover. Parkinson agreed.

There followed a slow explosion in the City. Size was going to count in a deregulated money market, so firms merged and recruited, and salaries spiralled, sweetened by huge golden hellos, golden handcuf s and other perks. House prices shot up within miles of the City as banks and finance houses encouraged their young employees to take on huge mortgage commitments in the hope of tying them down. This gold rush would not have lasted so long and would probably not have produced such rich rewards if Parkinson had not allowed the City those three years of preparation, which financial commentators did not think he needed to have done. ‘The government has caved in to pressure from the City at an odd time,’ the Economist commented.3 The financial editor of the Financial Times concurred:

There was not much to be said for the hasty cobbling together of a settlement by Mr Cecil Parkinson and Sir Nichol as Goodison behind closed doors and constrained by a wholly artificial deadline imposed by the holidays of the courts and Parliament . . . The agreement has turned into something of a public relations disaster.4

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