The British trade union movement needs to get a grip on itself.
The British trade union movement needs to get a grip on itself. These days, the public associates the brotherhood of organised labour chiefly with the bizarre antics of the highly politicised Unite union, with its warring and tweeting joint general secretaries and its out-of-control airline cabin crew branch hellbent on destroying their own livelihoods by driving BA to bankruptcy in a dispute over travel perks. Yet at a time when jobs are at the top of the political agenda — the impending loss of them in the public sector, the urgent need to generate more of them, with higher skills, especially for young people, in the private sector — the workforce needs an articulate voice. This thought occurred to me while I was watching coverage of George Osborne’s first £6.2 billion worth of spending cuts: a man on a park bench in a casual shirt was being invited to comment, and I genuinely had no idea who he was until the caption announced him as TUC general secretary Brendan Barber.
By contrast, I would still easily recognise several of his powerful predecessors, including Vic Feather and Len Murray from the 1970s and 1980s. Indeed, when I tested myself, I found I could even pick out of a group photo the bushy eyebrows of George Woodcock, who came into the job half a century ago. But under the uncharismatic Barber, who has been in post for seven years, the TUC has become little more than an employment law think tank, producing reports nobody reads. I’m not advocating a return to the days of beer and sandwiches at No. 10, but I think the brothers should at least find themselves a high-profile spokesman capable of keeping the likes of Tony Woodley and Derek Simpson of Unite in line. Dozens of recently unjobbed Labour big-shots are available, but one name stands out in neon lights. Step forward, Lord Mandelson, destiny is calling you again.
No oilman
The TUC would certainly be a more suitable new power base for the former business secretary than the other post for which he was being mischievously tipped this week, as a parachuted-in chief executive of BP if the present incumbent, Tony Hayward, has to resign in the aftermath of the Mexican Gulf rig disaster and botched clean-up (see Philip Delves Broughton on page 14). But that surely must be a fantasy on someone’s part: can you really see hard-hatted Mandy bestriding a pipeline with a big spanner in his hand? No, neither can I. Being supremely oleaginous is no qualification for running an oil company.
The markets’ fault
International capital markets — the herd without a herdsman that I wrote about two weeks ago — are these days seen as the enemy of the great European project, as speculative attacks daily increase the possibility of a fractured euro and an irreconcilable falling-out between Germany and the southern member states the German taxpayers see themselves underwriting for the foreseeable future. I borrowed the ‘herd’ image from the historian Niall Ferguson, and I am indebted to him again for elucidating (in High Financier, his about-to-be-published autobiography of the banker Siegmund Warburg, of which I am enjoying an advance copy) how the opposite was once the case.
When Warburg invented Eurobonds — starting with an issue for Autostrade, the Italian motorway company, in 1963 — he did so as a lifelong proponent of European economic and political integration, and in the belief that a supranational bond market would erode the national restrictions on capital mobility that he felt were blocking progress towards his ideal at the time. Oddly enough, today’s markets might still end up driving Europe in the direction Warburg favoured: the only alternative to breaking up the euro is a radical centralisation of fiscal power, of which there is a foretaste in the current proposal that member states’ budgets should be scrutinised in Brussels before being submitted to their own parliaments. The markets may not look as if they’re betting on the birth of a fiscal superstate — but opponents of federalism will doubtless blame the markets if it happens.
My candidate for HSBC
HSBC was one of the few major banking groups to pass through the crisis of 2008 with no suggestion of needing a government bailout, and with its reputation unscathed — bar a few billion blown away by its US subprime lending operation, Household International. So there is no obvious reason why institutional shareholders should press for the retirement of the bank’s respected 61-year-old executive chairman Stephen Green, a part-time vicar who is also a guru of banking ethics and has set a useful example by accepting a more modest pay package than most of his peers. But the institutions are apparently keen to see more modern governance arrangements, including a non-executive role for the chairman alongside a more powerful chief executive — despite the fact that just such a balance proved catastrophic for Royal Bank of Scotland and HBOS, to name but two. This change would finally abolish the autocratic executive chairman’s role that served HSBC so well under Sir Willie Purves and Sir John Bond — who between them, over 20 years from 1986, transformed the bank from a colonial survivor to a global market leader.
Stephen Green himself partially dismantled the old structure by ceding part of his job description to his Hong Kong-based chief executive, Mike Geoghegan, and is now described, rather sadly, as ‘non-executive in all but name’. Another gesture of submission to correctness is that, for the first time, the next HSBC chairman will not be a product of the bank’s own executive hierarchy, and thereby someone steeped in its distinctive culture and history. Instead, we learn with depressing predictability that the leading candidates for the chair, China expert John Thornton and Rolls-Royce chairman Simon Robertson, are both alumni of the world’s most powerfully connected financial institution, Goldman Sachs.
HSBC shareholders should remember that slavish adherence to corporate fashion is usually what gets banks into trouble. If there are really no internal candidates for the top slot, they should consider appointing an unfashionable maverick with a superb record as the autocratic executive chairman of a major international business. He’ll be available next year, and he is of course Sir Stuart Rose of Marks & Spencer.
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