Leeds to Halifax: a quantum leap into the hottest of seats: Robert Cole looks at the man set to take over Britain's biggest building society

A BREATH of fresh air blows through Britain's largest mortgage lender today as Mike Blackburn starts work at Halifax Building Society, where he was appointed chief executive-designate last week.

It is the hottest seat in the sector and carries enormous clout. Halifax has assets of pounds 60bn, nearly twice the size of its nearest mutual rival, Nationwide Anglia, and is four times the size of Leeds Permanent, which he left on Friday.

Mr Blackburn is likely to make the most of his new post, which he assumes in August when Jim Birrell retires. If anyone contradicts the notion that building societies are run by dullards, and if anyone is likely to use Halifax's influence to the full, it is Mr Blackburn.

Chris Sharp, managing director of Northern Rock Building Society and present chairman of the Council of Mortgage Lenders, underlines the importance of the job.

'As boss of the world number one building society Mike will speak with authority as the premier voice in the lending industry,' he says. With the housing market staggering out of its worst beating in living memory, his position assumes even greater importance.

Mr Blackburn, 51, is for the moment saying little about what he intends to do. He made his name as a straight talker when he tackled the Government head-on over what he called 'the biggest building society robbery of all time'.

Behind such virulent language was a long-running and, even by legal standards, complicated legal action. In 1990 Woolwich Building Society won a test case on appeal to the House of Lords.

It argued that because of a change in tax collection procedures in 1985 the Inland Revenue had overcharged some societies. Woolwich won with help from a legal loophole and was repaid pounds 90m tax by the Exchequer.

But as other societies - including Leeds - lined up to follow Woolwich's example the Government closed the loophole, legislating retrospectively. Along with his temper, Mr Blackburn lost pounds 75m.

Mr Blackburn no doubt kept those government tactics in mind when he - and other building society chiefs - were called in by the Chancellor in December 1991 to help the Government out of the problem caused by the soaring level of home repossessions.

According to a senior executive at another society, the Government was trying to bully lenders into helping out with a mortgage rescue scheme. Ministers were not interested in genuine solutions but wanted short-term answers to bandage a sensitive political sore in the run-up to the general election.

Mr Blackburn said publicly what others thought privately. 'Perhaps building society chief executives should be flattered that the Government should think we can come up with a cure in two days for a problem they took two years to create,' he said.

His breadth of experience is obviously attractive to Halifax. Like all his generation of building society managers, he has lived through both boom and bust in the housing market.

More crucially, he has banking and credit card experience, having worked for Access and Lloyds Bank. Halifax has taken full advantage of deregulation and Maxim, its current account, is a key part of its business.

John Wriglesworth, the leading building society analyst at the securities house UBS Phillips & Drew, has nothing but praise for Mr Blackburn. 'He is fantastically charming,' he says. 'He is plain- speaking but always with a smile on his face. No one dislikes him and he is the best manager in the industry.'

He predicts, however, that Halifax may become a more focused society. It happened at Leeds and is the key to the success of Cheltenham & Gloucester.

Mr Wriglesworth thinks Mr Blackburn's attention will first turn to the estate agent chain and Maxim. In last year's league table Halifax was in fifth position, up from ninth the previous year. But if there is fat to be worked off at Britain's biggest society Mr Blackburn will not shy away from the task - at Leeds, he shut 60 of the 480 branches in 1989.

People who have worked closely with Mr Blackburn at Leeds have nothing but respect for him. Survivors say he handled the branch closures and job cuts fairly. He is said to be personable - 'a great rememberer of names', thoughtful, informal and hard-working. He is in the office from 7.30am to 6.30pm and takes work home.

Documents needing approval are in and out of his office in an hour, and he is a master of detail. 'He can spot a split infinitive at 50 yards,' one colleague commented.

But he is moving to a very different type of organisation. At Leeds, Mr Blackburn was a hands- on, decisive manager. Like many building society chief executives he was answerable to a main board made up mostly of absentee non-executive directors.

At Halifax he will have to work with Jon Foulds, a chairman who puts in four days a week, and may have to learn the art of management by co-operation. It remains to be seen if his primary role is day- to-day manager or high-profile building society pace-setter.

There is a school of thought that maintains Mr Blackburn is not a naturally outspoken man but embarked on vociferous attacks on the Government as an act of company policy. He may be equally discerning, but quieter, as he explores his role at Halifax.

That was the style practised by Jim Birrell, who, barring a sudden and unforeseen disaster, will leave with well-deserved plaudits.

Mr Foulds' public comments on Mr Blackburn's appointment stress continuity. 'Mike Blackburn is ideally placed to build on the culture and values of the Halifax and to take the society forward from its extremely strong position,' he said this week.

Other Halifax insiders believe Mr Blackburn will have to soften his approach. But, whatever lies ahead, he will quickly find that to lead Halifax requires a quantum leap from running Leeds.

(Photograph omitted)