We have never been, nor will we become, crassly opportunistic or speculative in our corporate development activity.”Mr Varley added that while the group would always remain open to the possibility of making further acquisitions if they were the right “fit”,the group’s principal strategy was to concentrate on growing organically. Depending on acquisitions for growth was a “dangerous” strategy to follow, he added.Mr Varley said the bank’s impressive first-half profits were driven principally by strong growth in the group’s investment banking division Barclays Capital, its asset management arm Barclays Global Investors (BGI), and in its private client arm. Profits in the retail banking division were 6 per cent higher at £1.2bn.So far Barclaycard has weathered vicious competition for customers, the start of interest rate rises, and even Mr Barrett’s own comments to the Treasury Select Committee that you’d be crazy to borrow on a credit card because it is so expensive. The business is likely to slow, but don’t get things out of proportion. Barclays has more credit card business than the average but less mortgage business and, on balance, ought to outperform as rate rises put the brakes on borrowing.The strong results yesterday came despite considerable investment in new staff, both in branches and across the other parts of the empire. There was a surprisingly good showing from the investment banking business Barclays Capital, and a 73 per cent jump in operating profits at Barclays Global Investors, the fund management business which specialises in equity market tracker funds and bonds. All these, and the famous Barclaycard credit cards division, are poised to expand abroad.Half-year results yesterday were another record, showing a 25 per cent leap in earnings per share.

Expect this and dozens of other concerns to give Mr Fletcher and ministers a headache between now and December.. Its director of environmental protection, Andrew Skinner, said: “It is important that there is a clear process for companies to secure funding for this [further] work and we will be reviewing the ‘change protocol’ proposed by Ofwat today to see if it meets that need.”The regulator said its determination “left scope for all companies to outperform” and be rewarded for this through an upgraded incentive mechanism.Ofwat will assume a post-tax cost of capital of 5.1 per cent. While this is at the low end of City expectations, the message here too is that investors can live with it. For instance, ING, the broker, said the overall proposals ought to allow United Utilities to maintain its high dividend payout.While not a disaster for consumers, environmentalists or companies, each of these groups wants something better and will lobby furiously between now and December.A one-off scheme that Thames Water and the green lobby will push hard on is the so-called Thames Tideway. This is a £2bn project to tackle the problem of London’s Victorian sewage system, which releases raw sewage into the Thames if drains overload (as happened with heavy rain this week).Ofwat yesterday said this particular scheme required ministerial approval and could not be included in its draft determination.The Environment Agency said a feasibility study on the subject had just been completed and the regulator’s five-year plans were the only mechanism for getting the Tideway built. But the reason investors haven’t revolted is that, in the main, he has had a successful five years in the executive hot seat.
He has kept things ticking over nicely in Barclays’ core high street banking operations, despite very tough competition.

Matt Barrett, the moustachioed chief executive of Barclays, has suffered all sorts of criticism for his impending move up to the chairmanship Overpaid, perhaps Poor corporate governance, certainly. This will become apparent to the consumer only if and when those extra schemes get the go-ahead, and certainly that will happen the other side of the election.The Environment Agency yesterday picked up on this point and the rather murky procedure to change things after the regulator’s final settlement. If Ofwat had accepted the companies’ proposals, there would have been a politically uncomfortable 13.4 per cent hike next year.However, by leaving the door open to further projects coming in during the 2005-2010 period, bills could rise much more steeply during this time than the regulator is now allowing. That will mean a 7.6 per cent average increase for household bills from April next year, just ahead of the expected general election. For instance, the forthcoming European Union directives on bathing water quality and the Water Framework Directive “may lead to material work programmes being eligible for inclusion in an interim determination of prices between 2005 and 2010″, according to the weighty document put out by Ofwat.Philip Fletcher, the director-general of Ofwat, said: “We believe we are setting a firm platform with safety values for significant divergence from that platform.”The settlement is front-end loaded, with around half of the increase it will produce in bills coming in the first year. And there is room for an argument between now and the beginning of December.The regulator and the companies used different assumptions in formulating their plans and a large portion (£900m) of the disparity comes from Ofwat demanding greater efficiency from the water groups.