James Moore: Fixing infrastructure is crucial if UK wants to be a runner in the global race
Outlook. Plus: Sir Win is worthy of a progressive successor; An uphill task to make banks look pretty again
It's tough to win a low-grade selling handicap if the horse you're riding is lame, let alone a top-flight international group one; a "global race" if you like. Britain's creaking infrastructure means it is surely entering the latter with a mount that is at best hobbling; at worst in danger of being pulled up after the first couple of furlongs.
The Centre for Economics and Business Research today releases a report which shows that the cost of the UK's shabby infrastructure amounts to £78bn annually.
It estimates that GDP could be as much as 5 per cent higher if it were brought up to the sort of level enjoyed by developed competitors in said global race, a Tory buzzword rapidly assuming the status of cliché.
The CEBR also calculates that for every 1,000 jobs created in the construction of infrastructure, employment as a whole rises by 3,500 and that for each £1bn increase in infrastructure investment, UK-wide GDP increases by £1.3bn. Economic activity grows by £2.84bn for every £1bn of infrastructure construction.
The figures are naturally open to debate but the case the report makes is persuasive. And it chimes with what bodies like the CBI have long been arguing. The UK is essentially shooting itself in the foot, or the hoof, by failing to act; entering the "global race" with a lame mount that would be better off put out to grass.
If the CEBR's numbers are correct, loosening the purse strings a little would create a virtuous circle. Creating jobs and boosting short-term growth would go some way to helping the economy out of its current malaise while at the same time ensuring better long-term prospects of competing against all those emerging markets that you can be sure are paying attention to their own issues with infrastructure.
Giving local authorities the power to engage in prudent borrowing to perform activities such as, for example, fixing potholes in the roads (one of the CEBR's recommendations) would not only be economically beneficial. It would win votes.
With a bit of imagination, the private sector could be persuaded to partner on certain projects. If that means more toll roads and toll bridges, so be it, while ensuring that overall investment is kept at a sufficiently high level just makes common sense.
The Government has made much of the fact that borrowing now is only taxation deferred, and that the next generation will have to pick up the tab if we don't act. A good argument; it is irresponsible and immoral to ask our children and grandchildren to pay for our profligacy.
On the other hand, those future generations will hardly thank us if one of the consequences of today's austerity is a country in which people don't want to invest because it is falling apart.
Sir Win is worthy of a progressive successor
Farewell, then, Sir Win Bischoff. The City grandee (he won't thank me for using the term) has been, in the main, an effective chairman of Lloyds Banking Group.
He substantially reshaped the board, and he made the old guard pay a price for their misdeeds when the cost of the mis-selling of payment protection insurance policies became clear.
As such, perhaps we can forgive him for the little lecture he gave on "getting to a place" where executives felt they could accept bonuses to which they might have been contractually entitled, but hardly deserved. One of the actions taken by Sir Win for which he deserves credit is that, as a noted supporter of the 30 per cent Club promoting more female representation on boards, he has practised what he has preached.
Lloyds has generally been progressive on this issue, and a third of the non-executive directors on its current board are women. Now would be a good time to take the next step by becoming the only member of the Big Four to have a chairwoman. When companies are taken to task about their poor record on the issue of female representation on boards, they tend to huff and puff about being gender blind and the importance of choosing the "right" candidate.
Lloyds has difficult challenges ahead of it, and a full return to the private sector is only one of them. It has to demonstrate that it has a strategy for growth while keeping on the right side of both the financial and competition authorities.
But there are already women attracting the attention of oddsmakers, so it should not be beyond the wit of man, or headhunter, to be able to unearth a female "right candidate". One possibility, Anita Frew, the former Scottish financier, already sits on the board.
An uphill task to make banks look pretty again
It was future generations of Lloyds executives that the chief executive Antonio Horta-Osorio, the chief executive of Lloyds, was fretting about in a speech in Oxford last night. He cited a YouGov survey of students showing just 2 per cent would contemplate a career in banking, and a quarter would be too embarrassed to admit to friends that they had found work in a bank.
Embarrassed they might be, but given the economy bequeathed to this country by the misdeeds of its banks, most would probably be only too happy to have a job, any job, even if it is in banking.
Nonetheless, Mr Horta-Osorio waxed lyrical about the importance of changing this negative perception, eulogising about the joys of retail banking and the importance of putting the customer first. Pretty words, but Lloyds remains Britain's most complained-about banking group. That will take more than pretty words to put right, and until it is there won't be much change in polls like the YouGov survey he mentioned.
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