The Guardian from London, Greater London, England • 2

2 I NEWS The Guardian Wednesday October 16 1996 Clarke's tough stance pays dividends as surge by sterling scotches calls for higher interest rates Pound hits two-year high Unfriendly way to swap statistics Larry Elliott and Mark Mllner Pound Trade-weighted Index (1990100) and Italian governments for monetary union has given sterling a "safe haven" status for some investors. Though the pound has climbed by almost 2 per cent in the last week alone, analysts believe it may have further to run, though they are divided about just how far it can go. Gerard Lyons, chief economist at Japanese bank, DKB, said: "Mr Clarke won't cut rates on the basis of sterling's strength alone. But if inflation stays low and the Budget is tight I can see him shaving another quarter point off rates." figures are released today and some analysts expect the recent rise in high street sales to be reflected in an improvement in tax revenues. City analysts believe other factors as well as the Chancellor's predicted Budget rigour have helped push the pound higher.

These include receding fears of a reflationary package from an incoming Labour government, a strengthening oil price, record share prices, and concerns that the single currency project may include some of Europe's weaker economies. The enthusiasm of Spanish cellor further ammunition in his long-running struggle to resist Bank of England calls to raise borrowing costs. The Bank is also calling on the Chancellor to use the Budget to reduce the Government's financial deficit and resist the temptation to stoke up an already strong consumer recovery with income tax cuts. Despite his avowed caution, however, Mr Clarke is expected to trim the basic rate of income tax by one penny in the pound on November 26, justifying the reduction by also cutting public spending. The latest public borrowing tion "if they can be afforded." In little more than two months, the pound has climbed almost 7 per cent in value against the German mark to more than DM2.43.

While the immediate benefit is being felt by UK holiday-makers travelling abroad, the lower cost of imports helps Mr Clarke to hit his 2.5 per cent inflation target. Sterling has appreciated by just over 4 per cent against a basket of world currencies since the summer a rise which, on the Treasury's rule-of-thumb, is the equivalent of a 1 per cent rise, in interest rates. That will give the Chan 1994 1995 1996 the novelist John Braine, who by then was very right wing indeed. He had been praising the United States at a dinner. Another guest, Donald Soper, sniffed: "It's all right if you're not black, I suppose." "But, you stupid idiot," roared Braine, "I'm not black!" The moment passed.

Mr Blair raised the state of the NHS (a London hospital is refusing to accept emergency patients if they are aged over 75). Some of our family income derives from the NHS, and like everyone involved with the service, we know that the situation is desperate and getting worse. The statistics, however, are more ambiguous. Mr Blair and Mr Major swapped a few, angrily. They were out of context and largely meaningless.

One would shout (or equivalent) and the other would reply "fifteen million!" "Less than 18 months!" says the first. "Ha!" says the other. "A rise of 10.2 per cent per year. I notice he does not answer that!" Either way, it was all more taxing than the Tory conference had proved to be. I was in a small minority who were unimpressed by the Prime Minister's ability to sound relaxed and confident in front of an audience of several thousand people, all of whom yearned to adore him.

There is a comedy club near us where stand-ups who have outstayed their welcome are cruelly dismissed with a cry of "Taxi!" The cab would have called for Mr Major after about a minute. Only Paddy Ashdown raised the Kwik-Kash for Kwestions scandal yesterday. He asked simply whether it was right for the Government to try to manipulate the outcome of the select committee looking into the matter. Mr Major agreed with Madam Speaker. This is the parliamentary equivalent of saying: "I am with God on this one He intended to follow her instructions and would not "bandy" allegations across the floor of the House.

(When do you hear that word in real life? Do children say: "Miss, miss, Darren was bandying allegations in class, Miss!" Or, "That Mrs Figgis next door. She's a real gossip-bandier and no TOUGH talking by the Chancellor, Kenneth Clarke, ahead of next month's Budget was reaping early dividends yesterday as a soaring pound put paid to pressure for a rise in interest rates. Sterling surged to a near two-year high on the foreign exchanges, helped by City expectations that Mr Clarke will stay true to pledges that there will only be tax cuts in the last Budget before the elec Big brothers: The Land Rover Simon Hoggart THE Prime Minister rose for his First Question Time since July to the time-hallowed, ritual cry of "Resign!" At least he had the satisfaction of knowing that, for once, it came from the Opposition side of the House. Ronnie Campbell had the first question. The relentless march of Estuary English has not yet reached Blyth, in whose interests Mr Campbell sits.

Consequently his accent makes Gazza sound like Brian Sewell. "Us uh wukkin' class worrier luck muself," Mr Campbell began. (He meant "a working class I shall now drop this futile attempt to render his accent.) He then took off his jacket, no doubt in imitation of Mr Major's performance at the Tory conference last week. Both of them should know that wearing shirtsleeves does not make you resemble an honest son of toil. Instead you look like an estate agent with his jacket on a hook inside the Mondeo.

Mr Campbell asked whether the Prime Minister could confirm that he had sent his children to private school. A great "Whooooah" of fake surprise rose from the Labour ranks. What did Mr Campbell expect? That the Prime Minister would break down sobbing: "Yes, I am a hopeless hypocrite! Yes, I claim to want a classless society, yet sent my own children to the very institutions which perpetuate the class divide! I resign, and you, Mr Campbell, shall take my place!" Instead he easily batted the question away. "I believe in choice, and I do not seek to deny it to other people. Choice, of course, for those like Mr Major who can afford it.

But that wouldn't trouble him. I was reminded of Sir Kingsley Amis's story about PHOTOGRAPHS: DAVID SILLITOE, GAVIN FOGG Land Rover aims to throw They're friends but is it art? welly image with birth of new baby The Peugeot Asphalte sports BMW is extending a strategy already adopted by Land Rover of moving its products up-market. Although the core of the Land Rover business used to be the Defender, a workhorse used by farmers, the military and emergency services, much of the glamour of the marque stems from the Range Rover, now considered a luxury car. The company recently launched the Discovery, an Chris Barrie Business Correspondent IT HAS long been the farmers' workhorse and plaything of the green wellies brigade. Now, though, Land Rover is targeting women, increasingly important players in the vehicle market, in a 300 million attempt to revamp its crusty image.

The company, now part of the German group BMW, is to develop a small 4x4 sports utility vehicle that will, executives hope, leave car. off-road vehicle designed to bring some of the attraction of the Range Rover into the reach of the middle class. With 07 per cent of the current Land Rover range built from United Kingdom parts, BMW estimated that the project would inject 3.5 billion into UK industry over the lifetime of the vehicle. The project will also be a fillip for the West Midlands, where many Peter Hordern, Gerry Malone and Sir Andrew Bowden. Sir Gordon's office said last night that the commissioner's task was to conduct a "preliminary investigation" by reading the papers sent to him.

He will send a report to the Commons standards and privileges committee without questioning any witnesses or lawyers involved in the case. Sir Gordon, a former Treasury official and Comptroller and Auditor General Parliament's financial watchdog has also emphasised the contrast between court proceedings and his own inquiry. "I don't have the powers to force people to co-operate," he has conceded. His report would be passed to the committee before it is published and the committee Show in Birmingham. Below: Asphalte sports car have been designed with women drivers in mind.

Garel Rhys, of Cardiff Business School, said yesterday that all car companies were trying to sell cars to women more seriously than in the past. Although many women bought small cars, that was because they often had more limited budgets. In general, they preferred large cars for security. may be Sir Gordon Downey: 'rules dictate private affair' to study documents and in the Guardian's case to pursue a paper trail which led to the discovery of further range on display at the Motor off green its traditionally muscular image far behind. To be built on a new seven-acre factory complex at Solihull from late 1997, the vehicle will secure the jobs of 12,000 people and create work for hundreds more at suppliers and construction companies.

The vehicle, announced at the Motor Show in Birmingham, highlights the motor industry's preoccupation with the potential market now represented by women car owners. Even Jaguar's latest sports car, the XK8, and the Peugeot libel trial had it gone ahead. Mr Hamilton and Mr Major have said only that they will give Sir Gordon documents passed for the purposes of the trial to the Guardian's lawyers and papers they consider It remains unclear, for example, whether Mr Major considers that a note of a conversation between Sir Geoffrey Johnson Smith, a senior Tory member of the Commons standards and privileges committee, and David Willetts, is relevant to the Hamilton affair. It took experienced lawyers from both sides several weeks Land Rover suppliers are based. However, there will be no new jobs at Land Rover, which has taken on 2,000 people in the past two years.

Walter Hasselkus, Rover chief executive, said the investment underlined BMW's commitment to Land Rover and Rover Cars, with 1.5 billion invested already. BMW hopes that the new vehicle, to be smaller than existing models, will send production soaring from last year's level of 120,000 vehicles to more than 200,000 vehicles. Three years ago, when BMW bought Rover, production was just 68,000. The German car company is aware that it is tapping into a growing market for 4x4 vehicles, some of which never get any closer to off-road activity than motorway service stations. The market is up by 12 per cent this year, with booming sales in the US, Japan and Germany.

Peugeot's baby, page 21 "could do what they liked with He has acknowledged that his office has no "set and freely admits that he faces a "much bigger inquiry" than anything he has been asked to do before. He has said his investigation would be a "private under his terms of reference. However, nowhere do the 1996 standing orders which set up his post say inquiries should be held in private. They say only that the commissioner can "receive, and, if he thinks fit, investigate specific complaints from MPs and from members of the public in respect of (i) the registration or declaration of interests, or (ii) other aspects of the propriety of an MP's Leader comment, page 18 Yvan, who at first claims to see different colours in the painting, agrees it's a piece of shit. The audience roars its approval.

But a work of art is an object that gives pleasure. And if Serge sees, as I do, subtle variations in the painting in different lights, why is he to be denied? Behind the play's palpable wit lies an easy populism. But the acting, in Matthew War-chus's stylish production, is so brilliant you scarcely notice. Albert Finney plays the truth-telling Marc superbly, like a burly version of Moliere's Al-ceste in The Misanthrope, and he is never funnier than when he tries to hide his seething rage under a mask of formal politeness. Tom Courtenay's Serge is an equally remarkable creation: a man who prides himself on his taste and sensitivity, yet is capable of extraordinary emotional cruelty.

And Ken Stott punches his weight as the hapless middleman caught between these two prowling panthers: for sheer bravura, and breath control, it would be hard to beat the scene where Stott launches into a neurotic tirade about the inter-family wrangles over his impending wedding. When they hand out the acting awards, they are going to have to devise a hydra-headed statuette to cover these three blistering performances. Add Mark Thompson's pristine white-walled set and Gary Yershon's score, and you have an evening that gives undeniable pleasure. But the real test is whether the play encourages audiences to embrace modern art or reject it: I have an uneasy feeling that Reza's play, for all its manifest cleverness, panders to popular prejudice. Key documents withheld from Downey Richard Norton-Taylor on the uncertainty which surrounds watchdog's inquiry Michael Billington Art Wyndhams Theatre YASMINA Reza's Art, translated from the French by Christopher Hampton, is sharp, witty and clever.

It is also superbly acted and directed. But, although it will rightly give a lot of pleasure, something in it disturbs me: the way it panders to the popular belief that modern art is a conspiracy against the public. Its real theme is art as a test of love and friendship. Serge, a divorced doctor, buys an abstract painting: a pure white canvas costing 200,000 francs. His friend and mentor.

Marc, is outraged: he scorns the canvas as a piece of shit. A mutual friend, Yvan, a stationery salesman and a natural trimmer, tries to reconcile their differences, only to be turned on by both. The initial situation is worthy of a modern Moliere; and Reza turns it to great dramatic advantage. She shows, in 90 minutes, how an argument over a canvas opens wider disagreements: Serge and Marc represent not just the the modern and the traditional but differing views of friendship. Serge has always been the pupil and Marc the teacher, but investment in the canvas reverses the roles.

Reza pursues the argument with crisp intelligence. But as long-festering resentments come to the surface, you can't help wondering what bound the three men together in the first place. The play also subtly implies that Serge is a bit of a chump for having paid so much for a plain white canvas: the clinching moment comes when OUR papers. Some were disclosed to the newspaper's lawyers. However, Mr Hamilton withdrew from the libel action before the judge had the opportunity to inspect further government documents handed to him by Charles Gray QC, counsel for ministers the Guardian had subpoenaed.

Mr Hamilton's decision to drop the libel case also prevented the judge from deciding whether additional papers relating to Mr Hamilton's relationship with Ian Greer, the lobbyist, or the MP's tax returns should be disclosed. It remains unclear whether Sir Gordon will investigate the relationship between Mr Greer's company and other Tory MPs, including Tim Smith, Sir Michael Grylls, Sir KEY documents relating to the cash-for-ques-tions affair may be withheld from Sir Gordon Downey, the parliamentary commissioner for standards, it emerged last night. Sir Gordon faces the task of reading hundreds of papers already sent to him by the Guardian, as well as other documents which Neil Hamilton and John Major have promised to give him. However, it is far from certain whether he will see potentially crucial documents which were made available to Mr Justice Morland, who would have presided over the 50TH BIRTHDAY INVITATIONS ARE GOING OUT SOON. THE THIRD AT 50 CONTINUES THE CELEBRATIONS WITH THE SECOND INVITATION CONCERT, CHOSEN BY NICHOLAS KENYON.

BACH, BRAHMS, MACHAUT AND OCKEGHEM LIVE FROM ST GILES' CRIPPLEGATE. TOMORROW AT T9,.