The reason for believing this is firstly that at least two of the fund managers at the centre of the scandal in the US also have considerable fund management operations in Britain. The other reason is that almost every fund manager you meet admits to having been approached by the hedge fund industry to participate in the market timing scam, but somehow or other managed to resist its siren calls.The British fund management industry is also more open to this kind of abuse than the American one, if only because most prospectuses in the US specifically ban short term traders from the funds, whereas in Britain there is no such rule in most cases. Eliot Spitzer’s crusade against Wall Street has sometimes been of questionable validity and motivation. The US mutual funds industry seems to have adopted very much the same attitude in agreeing to allow hedge funds to take advantage of market timing opportunities to make a fast buck at the expense of ordinary investors.Of all the abuses discovered on Wall Street this past three years, this is undoubtedly the worst, because it is so plainly dishonest and so obviously disadvantages funds meant for the little guy in favour of money grabbing financial professionals. Belatedly, Britain’s Financial Services Authority has clambering aboard the bandwagon.To date, the British fund management industry has been able to characterise market timing abuse as almost entirely an American problem. But by alighting on an abuse that everyone can understand and directly affects millions of small investors, the New York Attorney General has hit the spot with his market timing revelations.

He’s a card, that Mr Hiscox, and the remark at least had the merit of being quite genuinely funny. Yet his candour in suggesting that investors are only sheep to be fleeced was also a shocking admission of an always half suspected truth. You’ve more chance of getting hell to freeze over than achieving an internationally agreed rate of tax on aviation fuel. So suggest you start work pronto on a system of tradable emission quotas.

In the long term, this would not only reduce emissions, but we could also tax it very effectively Duty calls The baby’s crying again. Yours Gordon.”Timing abuse”If God had not meant for them to be sheared, he would not have made them sheep”, Robert Hiscox, a former deputy chairman of Lloyd’s of London, once said of the insurance market’s “Names”. I gather you think our best chance of tackling this problem would be to obtain EU or wider international support for taxing aviation fuel Oh dear You are obviously a virgin in these matters. In any case, I’ve decided that we are not going to have any more increases in rates of tax this side of the election, environmental or otherwise.

So reluctantly, I’m going to allow you to keep the proposal out of the white paper on expanding airport capacity in the South-east.But before you begin the celebrations, a word in your ear. We mustn’t get ourselves into a position where the tax on air travel is more than the cost of the ticket itself, which in a large number of low cost fares it would be if we doubled the rate. Quite apart from the implications for growth, such an outcome might ultimately lead to a reduction in the level of tax raised from the duty, and we don’t want that.Worse, it would very likely cost us votes. All the progress we are making in reducing greenhouse emissions will make no difference at all if we do nothing about aviation, which for reasons of economic growth, we are rather keen to encourage.The problem with air passenger tax is it has no beneficial impact on the environment at all unless raised to a level of such onerous proportions that it begins to reduce the number of flights coming in and out of the country. This is a shame, because as you know, the public finances could have done with the £800m such a measure would have raised.Yet regrettably, I don’t think the public would weather it. As you know, the airline industry is fast becoming Britain’s biggest polluter, yet as things stand, it pays virtually nothing towards the cost of the environmental damage it causes.