How the world turns. If Royal Bank of Scotland hadn’t been nationalised in 2008, John McFarlane, who joined the board at the same time as future chief executive Stephen Hester, looked a racing certainty to become its chairman. In the event, the Scot headed off to Aviva, getting the insurer moving again.
Despite telling me in an interview less than a year ago that “there is no way on earth I could conceive of chairing a bank,” he couldn’t resist the industry’s siren call for long. Hence his arrival in the chairman’s seat at Barclays from next year.
The appointment confirms that headhunters trying to hook a banking chairman are fishing in a small pool. Who does that leave for the other role that ironically is coming free, to succeed Sir Philip Hampton at RBS? Once the pinnacle of a City career, chairing a big bank these days offers up the unappetising cocktail of political pressure, public opprobrium and regulatory risk.
That doesn’t mean Mr McFarlane is not well-suited to the role. What is interesting is that soon as the Treasury wonks got their hands on RBS, he wasn’t interested in hanging around. Barclays isn’t partly owned by the state but, like others, it is under plenty of strain as it braces for further fines and censures related to historic misbehaviour such as rigging the gold price and inter-bank lending rates. Going on past evidence, Mr McFarlane should be able to restore some confidence to the place and work on that battered reputation. It is a role he has been rehearsing for long enough.
Bricklayers, your country needs you
First of all it was a shortage of bricks, then Britain’s largest housebuilder, Barratt Developments, sounded the alarm over a shortage of bricklayers.
In the short term, the housing market has been returning to normal as confidence returns. From the 170,000 new houses built in 2007 before the market slumped, volumes have grown back to 130,000 this year. The trouble comes when the industry looks out at the aspirational target of 250,000, often quoted as the magic number to tackle our shortage of housing stock. Never mind that the builders that overstretched themselves in the boom have no intention of working flat out again if it precipitates the next bust; even if they wanted to hit that number, they would need to find 150,000 extra staff.
The industry is trying to attack the problem from both sides. For its part, Barratt is aiming to take on 1,100 apprentices, trainees and graduates over the next three years. The alternative is to get by with fewer brickies. The time it takes to build one home can be shrunk from 16 weeks to as little as eight weeks if some elements, such as roofing, are manufactured off-site. Of course, such innovation pushes up costs.
Builders need to overhaul conceptions. A Lord Kitchener-style “Build for Britain” campaign might do it. Anything to show the industry is more sophisticated than wielding a trowel, knee-deep in mud.
Small companies should reach out to the crowd
Diners were in good spirits on Thursday night at the Quoted Companies Alliance annual dinner, even before writer and producer John Lloyd regaled the Savoy ballroom with stories from his Spitting Image and Not the Nine O’Clock News days.
Britain’s army of small companies still have cause for concern over accessing bank finance but those that are listed have had better news in the last year. New rules that let savers put shares traded on the junior Aim market in their Isas, as well as the scrapping of stamp duty on growth stocks, has provided a fillip for which the campaigning QCA boss Tim Ward can be proud.
Xavier Rolet, the London Stock Exchange boss, counted up the £4.4bn of Isa cash now invested in Aim and wondered out loud if companies could go one better. From the high point of the Thatcher privatisations of the 1980s, the representation of retail shareholders in London’s capital markets has dwindled to the lowest in Europe.
It is easy to surmise that big companies regard small shareholders as second best. But could, as Mr Rolet suggested, small companies seize the initiative? Re-engaging small investors in the stock market is key to re-engaging the public with the broader benefits of business to the economy.
But picking which small flotation to buy into is no exercise for widows and orphans. It all depends how entrepreneurial bosses looking to raise cash can market themselves. You might call it crowdfunding by another name.Reuse content