Norris needs Labour bailout

THE future of Jarvis as a publicly-quoted vehicle is looking increasingly dicey. The latest plunge in the share price means that the company is now worth just a tenth of its value nine months ago and is facing choices between radical restructuring or administration.

As lenders Royal Bank of Scotland and Barclays move to protect their own interests, shareholders can all but kiss their equity goodbye.

The crisis of Jarvis is also a test for the private finance initiative. The government's effort to inject private sector expertise into the public services is welcome.

But there has always been a suspicion that this is simply an exercise to shift borrowing off budget and that some of its partners have not been properly tested for their management skills and probity.

It would be a tragedy for dozens of schools and universities in which Jarvis has been involved if the company found itself in administration, delaying construction, hampering management and putting many necessary projects in doubt.

The problems at Jarvis have been obvious for some time. There has been a series of reports about the company's failure to pay its bills to subcontractors on critical contracts.

Its general incompetence in managing railway engineering works has been there for everyone to see. Only yesterday an offshoot was fined £400,000 for maintenance failures that led to the derailment of a coal locomotive. The judge noted it was a matter of good fortune that it was not embroiled in 'a disaster involving a passenger train'.

Despite this tawdry history, the government has shown precious little interest until now in putting up a safety net in the event of Jarvis's demise. The Lib Dems are demanding action to prevent 'chaos' in schools and on campus.

We now have the intriguing spectacle of a Labour government having to rescue Steve Norris, the Jarvis chairman since November and defeated Tory mayoral candidate. Perhaps they deserve each other.

Abraham's duty

THE last best hope of compensation for the larger body of Equitable Life policyholders is the Parliamentary ombudsman Ann Abraham.

In the run-up to the Commons summer break she is coming under enormous pressure. She faces petitions from 250 MPs and 2,500 policyholders and interested parties to reopen the case.

In his report released in March, Scottish judge Lord Penrose failed to directly nail government officials. But it pointedly criticised the Government Actuaries Department and officials at the Department of Trade & Industry.

This should be adequate grounds for a probe. Abraham appears to be stalling because of the potential complexity of any such inquiry, let alone the bill that would fall on the government.

Clearly, it would be easier for Abraham to decide if the company and the policyholders' groups were singing from the same songsheet.

But Equitable chairman Vanni Treves and EMAG, representing policyholder activists, are engaged in a running squabble. After a tongue lashing from Treves at Equitable's recent agm, EMAG forged a new leadership team and made a peace offering.

Treves is having none of it. In a hard-hitting letter, Treves accuses EMAG of simply 'shuffling positions' and propagating untruths on the Motley Fool website.

Equitable can afford to feel more confident now that the Financial Services Authority (see below) has excluded the possibility that the company will face a large-scale claim from policyholders over bonus practices in the 1990s.

What is really needed is a final push to persuade the ombudsman that the government has a case to answer. There is a misleading impression that Equitable Life savers don't deserve compensation because they are too wellheeled.

This is stuff and nonsense and it is time for Abraham to show her independence by examining the evidence of maladministration.

Marks' challenge

THE phoney war over the future of Marks & Spencer is drawing to a close. Within the next 48 hours we expect M&S to go to the City Takeover Panel and demand that Philip Green either put up or shut up by making a formal offer for the company.

One of the purposes of the informal City code is to prevent companies, their shareholders and employees being put under siege.

But this will not be game, set and match for M&S. Stuart Rose and his advisers may yet have to start answering some of the questions, beyond the pensions deficit, which accompanied Green's 16 June offer.

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