Ultimately, BAe wants to see the creation of a European defence and aerospace holding company along the lines of Unilever and Royal Dutch Shell.Sir Dick also said that the four partners in the civil aircraft manufacturer Airbus Industrie, in which BAe has a 20 per cent stake, remained on course to agree a binding memorandum of understanding by the end of the year, paving the way for its conversion to a public company. It is highly unlikely, even if we had the will or the requirement, that there will be discussion with GEC within that time."However, he held out the prospect of further consolidation with rival European groups following the pounds 1bn merger of BAe's missiles division with that of the French group Matra.BAe intends to support the bid that Matra's parent company Lagadere intends to make for the French defence electronics group Thomson when it is privatised. Speaking as BAe announced a 38 per cent leap in half-year profits to pounds 215m, he said: "George has stepped into one hell of a business and it will take him at least a year to get the feel of it. The arrival this week at GEC of the former BAe executive George Simpson as chief executive has heightened speculation that an alliance between the two defence giants might at last be on the cards. But Sir Dick played down the likelihood of an early tie-up. Sir Dick Evans, chief executive of British Aerospace, yesterday ruled out a merger with GEC for at least the next 12 months but held out the prospect of further tie-ups with European defence and aircraft groups.

Despite this substantial financial commitment, top executives seem almost completely unaware of it. Doubtless the situation at British Gas is no worse than other UK utilities Just what are these people paid their fat cat salaries for?. British Gas Energy, the supply business, has just installed a massive new billing database, but will still need to spend many millions of pounds in order to cope with the date change. Two were aware of the problem in theory but knew nothing of the situation at British Gas itself. The third, the most senior of all, said: ''I didn't know about it until you mentioned it.'' No doubt BG has plenty of other things on its plate, but failing to address the ''Millennium problem'', with consequent billing chaos for 19 million customers, would hardly do much for the company's shattered image.As luck would have it, British Gas's computer department seems to be more in touch with reality than its board of directors. A straw poll of three very senior British Gas executives yesterday (we'll spare them the embarrassment of naming them) showed an astonishing level ignorance.

As Taskforce 2000, the independent body set up to raise awareness, admitted yesterday, nightmare estimates of pounds 15bn for British industry are pretty meaningless, given that most companies will pay for the necessary adjustments by deferring other IT projects.All the same, the Department of Industry is plainly right to highlight the problem, and to insist that it is one for the boardroom, not just the humble IT director. The job of an investment trust board is to vet every single investment made by the managers - and they do, for their reputations are on the line. The good old-fashioned investment trust may be about to enjoy a renaissance.Who will solve the millennium problem?So much hype has surrounded the looming millennium computer software crisis that it is impossible to gauge what the true cost of this extraordinary lack of foresight is going to be. Now it seems that these independent directors may provide a rather better form of investor protection than all the unit trust industry's highly paid trustees, auditors and compliance officers put together.