Please Mandy, let’s not say Tata to another £2.3 billion

The company betrayed the self-deceit common to all carmakers that the fifth car left unsold on the forecourt would be someone else's.

Surprise surprise, it hasn't worked out like that. The price of fuel may be at its lowest for three years, but the world has changed. Driving a Range Rover or a five-litre V8 supercharged Jaguar XFR emitting 292 grams of CO2 per kilometre is no longer considered clever. Not only have we found that the Japanese have made cars so reliable that we have no need to sell the one we've got, but most of us can rub along without a massive metal monster rotting away in the drive.

This is the background to the latest crisis in the car industry. From the calm of the Other House, Lord Mandelson can say what he likes without being howled down, but bailing out the man-ufacturers of these gas-guzzling dinosaurs is economic lunacy, especially from the government that thinks it can save the planet by banning the sale of 100-watt lightbulbs.

We have been down this road before, with similarly dismal results. The state-sponsored sale of Rover for £10 to four chancers who could see how to make a quick buck still ranks as one of this blighted administration's most cack-handed interventions. The jobs of the Rover workers that the deal "saved" did not last long.

As reality returned to Longbridge, they found themselves out of work, older and less employable than they would have been and with much worse redundancy payments, since the money BMW had put up to fund them had been squandered.

This latest transfusion from the taxpayers is set to go down the same drain. As Kevin Morley, a former managing director of Rover, put it: "There is little point spending money to send workers back to build more cars that people don't want."

Across the world, carmaking is a modern-day version of the 1960s steel industry, when every dictator from Rumania to the Congo needed his own steel mill, as a badge of national virility. There is something about the motor trade which causes sensible politicians like Mandelson to go mad. Perhaps it's because even the dimmest among them can grasp that cars are important, or perhaps it's because there are marginal constituencies in the places where they are made.

We can manage quite well enough with fewer retailers, but there are plenty of other manufacturing industries whose plight is fully as bad as that of the carmakers. Unfortunately, industrial widgets just don't cut it in front
of the cameras the way that shiny new cars do.

You can tell that the Government hasn't a clue when a £2.3 billion gift is called a loan, and is dressed up as an "investment in lower-carbon initiatives". The waste of our money would be less painful if the industry really did start making green cars, but the average Jaguar owner probably thinks that just means British Racing Green.

Tesco stays on the inside track to success

Can you see a pattern here? After months of due diligence, Tesco has found itself a new finance director. The appointment of Laurie McIlwee, above , won't encourage the headhunters who don't eat unless they can parachute outsiders into top positions, since he's been with the company for nearly nine years. Yet as the table shows, by Tesco standards, he's a newcomer. The executives are, with the exception of his predecessor and Lucy Neville-Rolfe, all lifers, and she served for a decade before joining the board.

It may be just coincidence that Tesco is one of our few world-class companies, but it's more likely that promoting people who have learnt the ropes is a better way to success than appointing a high-profile outsider who cannot know anything about how the business really works.

Whatever the question, his answer is the GFC

There is still time, if you're quick, to dash over to Davos to get into a Conversation with Gordon Brown on Saturday morning, although some of us, like Evan Davis, will be washing our hair that day. He might have concluded his own conversation with the Dear Leader on the BBC with the words "I give up", rather than the customary "Thank you, Prime Minister".

As he signed off, my radio had a near-death experience against the bathroom wall, the innocent victim of the outpourings of Brown sludge. Before his performance disappears into the landfill of political garbage, it's worth marking just how impressive a mountain of rubbish he managed to produce in just 17 minutes, 42 seconds.

His answer whenever Davis managed a question was always the same: the "Global Financial Crisis." Had Davis asked about Andy Murray's flu, flooding in the West Country or the new series of Shameless, the answer would have been the same. Brown used the phrase, with tiny variations, 12 times.

This GFC, he explained, is quite unlike any other. In the world according to Gordon, they all followed attempts to control inflation, but he couldn't have anticipated this one, because his control of inflation has been such a triumph.

His invention of an index that left out the cost of everything that went up meant that house prices, footballers' salaries, council tax, fine art and commodities including (a special mention here for the man who sold it at the bottom) gold, had nothing to do with inflation. Pull the other one, Gordy.

Will Barclays give us all a discount?

With one bound, John Varley was free.

Dear Everyone, the Barclays chief executive wrote on Monday, everything in our fine bank is absolutely tickety-boo. We've got more reserves than the game parks of southern Africa, more liquidity than Niagara Falls, and any day now we're going to declare profits that make the analysts look like a bunch of surrender monkeys. How are we going to do that? By the magic of mark-to-market. We've marked the value of our assets to market, but hey, what's sauce for the goose... The traders think our own debt is rubbish, so we've marked the liabilities to market as well, adding £850 million to profits.

This symmetry may get past the auditors, but it's nonsense. If your creditors fret about your debts, the market price falls. The worse your balance sheet looks, the bigger the fall, so the bigger the profit you can book by marking your debts to market. Your balance sheet looks stronger, but it isn't, unless you actually buy those debts in at a discount.

To provide Barclays with the cash, you might offer to repay your mortgage at a discount. Do not expect a positive response from John Varley.