Martin Vander Weyer
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And while I’m on my hobbyhorse, let’s not assume that the Hinkley Point nuclear power station is cruising towards its royal ribbon-cutting in 2023 just because it was finally signed off by ministers and planning authorities a few months ago. Protestors are currently fighting its proposed pylon connection to the national grid, and will no doubt find many other features to oppose, making investors ever more wary of the nuclear sector. These issues are hugely important for our future prosperity, emotional and otherwise, but progress towards certainty of UK supplies of fuel and power is negligible, and I suspect will hardly be mentioned in next year’s general election campaign. That’s why I shall keep banging on about it.
TSB, the new bank formed from the 631 Lloyds branches that Brussels insisted must be sold off but the Co-op proved unfit to buy, was being ‘priced to go’ below its book value in the flotation of 25 per cent of its shares this week. That news, combined with Governor Carney’s indication that interest rates will rise soon (potentially boosting TSB’s profit margins), had the effect of perking up interest in the offer, so that the final price may be fixed higher than first indicated.
Treasury ministers will watch to see whether the financiers advising Lloyds are capable of finessing the price to provoke neither a Royal Mail-style feeding frenzy and parliamentary post-mortem, nor an embarrassing flopperoo — with an eye to the sell-off of the remaining 75 per cent of TSB next year and the eventual disposal of the taxpayers’ stake in the parent Lloyds. But if I was a minister I would be more concerned about the wider development of ‘challenger banks’, of which TSB can claim to be one and Williams & Glyn, due to be carved out of RBS and floated in 2016, will be another.
The hottest mover in this field turns out to be Tesco, which has launched an online current account with Clubcard gimmicks — another move by the supermarket giant to combat fast-declining customer loyalty. Marks & Spencer is in the game, too. But the challenger sector is so far a disappointment to those of us who hoped the financial crisis might give birth to a new generation of smaller, locally based banks, built on authentic customer service rather than systems-driven retail engineering and too-good-to-last introductory offers.
Healthy saplings such as Metro Bank in London and the Handelsbanken branch network are overshadowed by a sudden proliferation of payday lenders and pushers of loans by mobile phone, loans against car logbooks and usurious, unaffordable debt in a dozen other forms. Those are the challengers no one invited.
For those concerned that rising house values will drag them over the £325,000 inheritance tax threshold, and that the Conservatives will never be brave enough to repeat David Cameron’s pre-election promise to raise the threshold to £1 million so that only ‘the rich’ will pay, there is a consolation: the Grim Reaper may not be as close as you think. Blame it on global warming if you like, but the number of deaths registered in England and Wales in the first five months of this year was almost 10 per cent down on last year. That’s happy news unless you happen to be in the funeral business — of which the UK market leader, with 926 branches and £370 million of turnover last year, is none other than the Co-operative Group. Oh dear, can death itself be conspiring in the troubled mutual’s death spiral?
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