Labour pains

FOR a while even the diehards of the City bought in to Labour's slogan 'Things can only get better'. But the last week has left those who are not fuming at this Government's lack of business acumen barely able to contain their sniggers.

First came the inglorious Railtrack U-turn from hapless Stephen Byers, who threw £300m on to the table at the first threat of a City backlash after earlier pledging not to give a penny of taxpayers' money to wounded shareholders.

Then, as the price emerged for securing the undoubted talents of Allan Leighton at Consignia for anywhere between £550 and £2,200 a day, it was announced that the Post Office jobs toll would be even higher than the mooted 30,000.

By the end of the week, the Government's much-vaunted strategy of turning us into a nation of digital TV watchers before the end of the decade lay perilously close to tatters as the appallingly managed ITV Digital finally fell into the hands of the receivers.

But more embarrassment lies in store. Patricia Hewitt, the Trade and Industry Secretary, faces humiliation in her attempts to find a business executive of note to lead her review into the role of nonexecutives.

Spurned by Sainsbury boss Sir Peter Davis, Hewitt offered the job to Sir Christopher Hogg, the new chairman of Glaxo SmithKline, as well as Roger Carr, boss of Chubb.

At least one of these two is believed to have turned her down and even the high rollers in the City are not prepared to wager their next bottle of Bollinger that the other will take up the challenge.

More damagingly though, Hewitt could also be heading for a bruising over her review of competition in the small-business banking market.

Having looked at the issue for almost two years following Don Cruickshank's conclusion that banks were ripping off customers to the tune of £5 billion a year, Hewitt finally published recommendations for small and medium business banking this month.

Now many of the participants and experts at investment bank Schroder Salomon Smith Barney say the proposals will merely entrench the 'complex monopoly' enjoyed by the four big banks, Barclays, Lloyds TSB, HSBC and Royal Bank of Scotland.

When details of the review emerged, new entrants such as Abbey National and HBoS, which had targeted a sizeable chunk of small firms' bank business, tried to put a brave face on the report, which called for banks to provide interest on current accounts or operate them for free.

However, it was precisely by offering to pay interest that the new players had hoped to differentiate themselves from the Big Four - which pay nothing - and gradually eat away at their business. Hewitt's recommendations deprived them of their strongest and most obvious competitive advantage. Now even her Enterprise Bill has sparked panic among businesses.

Relief from this catalogue of blunders came only with the announcement of business-friendly measures from Gordon Brown, many of which will already be familiar to readers of Financial Mail.

Things can only get better, can't they?

Pension partnership
NOT for the first time, the John Lewis retail partnership has kept its head when all around are losing theirs. Last week, the group said that far from closing its final salary pension scheme, it intends to increase its contributions to ensure a rosier retirement for its staff, or partners, as they are known.

On the same day, House of Fraser said it planned to close its final salary scheme to new staff and may even shut it for 3,000 existing employees.

This month, Marks & Spencer, once one of this country's most benevolent and paternalistic employers, signed the death warrant on its generous defined benefit scheme.

John Lewis partners enjoy the benefit of not having to make contributions from their pay packets into a £1bn pension fund.

Now, in return for staff agreeing to give up part of this year's bonus, the company has said it will put an extra £64m into the scheme.

It is a small price to pay for long term peace of mind, particularly as the TUC last week estimated that the switch from final salary pensions to riskier money purchase schemes is equal to a £40 a week pay cut for the average employee.

The John Lewis partners are already among the most empowered workers in the UK, having an unrivalled say in the way the business is run and with access and input to management which is the envy of many. By showing its rivals a clean set of heels on pensions, John Lewis has done its recruitment prospects no harm at all.