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FInancial Times: Shell a sure thing as a national champion

Feb 3rd, 2006
by admin.

By Jonathan Guthrie
Published: February 3 2006
Cometh the hour, cometh the multinational. Earlier this week the Trades Union Congress unveiled a splendid plan for the government to adopt “national champions” to fight the UK's industrial corner. With uncanny timing, Shell yesterday announced profits of £13.12bn, the highest ever from a UK business.
What better champion for the UK than this huge oil business? Imagine how much higher Shell could soar on the rocket fuel of Department of Trade and Industry training grants and Business Link marketing advice. Shell could soon challenge ExxonMobil for the title Most Profitable Company Ever. If you need a champion, you train up the biggest bruiser you can find, right?
Wrong. Unionists were frosty when Notebook nominated Shell to participate in their scheme. “Shell's multibillion profits suggest it can stand on its own two feet,” sniffed one official. Mindful that if you lose one bet, you might win the next, Notebook then suggested Mittal Steel. After all, Lakshmi Mittal has already benefited from Tony Blair's altruistic help and is pluckily bidding for Arcelor, Johnny Frenchman's favourite steel company.
“Mittal Steel isn't really British,” quibbled a unionist. Neither is the Royal Family. We still subsidise them. But it transpires the TUC's preferred champions would be companies that need propping up. This seems a loser's strategy, like supporting Peterborough FC in preference to Chelsea. You can imagine who the TUC's sectoral sweethearts would be: automotive – MG Rover; telecoms – Marconi; retailing – Courts. The painful truth is that the only business the state can safely help is one that needs no assistance. Such as Shell.
Notebook has retreated from the debate with wounded feelings. The fuss yesterday over Shell seemed pretty silly anyway. Large companies will go on producing record profits as long as the world economy grows and inflation erodes the value of money. People have simply picked on the hapless oil company because it sells a commodity whose price has risen sharply. Even though the government, via tax, has been the main beneficiary in the UK. The conclusion? Don't be a messenger. You get shot.

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