Public life, private problems

A GOLDEN rule for investors ought to be to avoid companies with politicians at or near the helm.

The deepening crisis at Jarvis, where would-be Tory mayor of London Steve Norris is chairman, comes hard on the heels of bus maker Mayflower's descent into administration shortly after John Major stepped down from the board.

It also is worth remembering that Nigel Lawson, the former Chancellor, was deeply involved in GPA, the Irish airline leasing firm which folded a decade ago.

One supposes that Kenneth Clarke, as deputy chairman of BAT, regards himself as the exception to the rule in that he works for a firm which generates shedloads of cash. But it is also a group with a fair share of ethical worries, ranging from allegations of cigarette smuggling (now resolved) to ongoing tobacco lawsuits.

As for Jarvis, it has all the characteristics of a company heading for trouble. There have been two profit warnings in a period of eight weeks. Finance director Robert Kendall has suddenly resigned.

The share price has bombed 27% and it recently was pilloried over allegations on the BBC's Money Programme that sub-contractors were going broke because Jarvis was slow to pay bills.

All of this might be seen as an everyday story of entrepreneurship were Jarvis just an ordinary engineering contractor. But it is not.

Despite the blame it took for poor maintenance over the Potters Bar rail disaster, last month it was awarded a new contract for renewal of infrastructure in the region which includes the crash site.

Jarvis also is a big player in the government's Private Finance Initiative where, among other things, it is involved in school building. It has just been revealed as the preferred bidder for a university accommodation contract and four new schools.

This would be all very well were the firm well capitalised, but when net debt has risen to £120m and banking covenants are in danger of being breached, one must wonder if it is really a good custodian for demanding government work.

In a matter of months, profits have been revised downwards by the broking community from £80m to £47m - £52m and the group has signalled that the final dividend will be slashed.

Norris and the former Parliamentary Commissioner for Standards Elizabeth Filkin, who provide adornment to a distinctly lacklustre board, must be wondering if it will ever be safe to jump off this train before the buffers loom.

Marathon misstep

AS a nation, Britain's levels of charitable giving are pathetic. The £818m dished out by our largest companies in 2002-03 - the last year for which there are figures - is a pinprick when one considers the philanthropy of corporate America. It is the sort of donation that Bill Gates alone commits to good causes each year.

So when Britain has an event like the London Marathon, which attracts charitable giving, it is critical that every penny finds its way to charity.

On the eve of Sunday's marathon, it emerges that this will not be the case. A poor understanding of the VAT rules among the smaller charities who effectively are charging participants entry fees means that they will have to cough up 17.5% of the cash raised to the Chancellor.

The bigger organisations, such as Cancer Research, have structured the wording on their entry forms so that no VAT is incurred.

The government, as always, claims to have good reasons for not bending the rules to accommodate the small charities who failed to heed Customs & Excise advice.

It fears that to do so would breach European rules on zero VAT and might encourage athletic clubs and others, who compete for the sake of the race rather than charity, to cheat. That is poppycock.

Gordon Brown, to his credit, has provided better tax breaks for voluntary giving than almost all of his predecessors.

He should now make sure that no registered charity raising cash through the Marathon has to pay any VAT. The rules be damned.

Retail star

NOT all British retailers have feet of clay. GUS, the Argos-to-Homebase retailer, managed to lift likefor-like sales growth by 4% in the six months to March, boosted by electronics and homeware sales.

Brokers are now raising full-year profits forecasts to £825m and next year's outlook to £892m.

It looks like the group - well steered by chairman Sir Victor Blank and chief executive John Peace - will be overtaking Marks & Spencer as it slips down the retail league.

Wouldn't GUS's founder, the late Sir Isaac Wolfson, be proud.