As an alternative to taking advice on the imposition of a bank tax from TUC brothers meeting in bucolic Brighton, the Government might instead draw inspiration from Lloyds Bank chief executive Charlie Nunn.
Lloyds is leaning into the idea that all organisations need a periodic shakedown.
Adopting a Darwinian stance, the bank is planning to improve its operations by winnowing out lower-performing employees.
Some 5 per cent of Nunn’s 63,000 colleagues will be judged on performance and put at risk of losing their jobs. All told, some 3,000 people could be in danger.
Cutting jobs at Lloyds is nothing new. In 2008, when Lloyds launched its rescue offer for an imploding HBOS (Halifax Bank of Scotland), the combined group employed 145,000 people, including Rachel Reeves, who joined HBOS in 2006 and stepped down in 2009.
At the time senior management at Lloyds assured questioners that there would be no large-scale job losses.
Staff reviews: Lloyds bank is planning to improve its operations by winnowing out lower-performing employees
As the latest round of staff cuts comes around, employment at the group has more than halved.
The lesson from this is that with determined management willing to take on the challenge of modernising an organisation, it is possible to make enormous cuts with minimal disruption.
As the Chancellor and No 10 (we now must include her neighbours) warm up for the November Budget and look at ways to close the hole in the public finances, they need look no further for an exemplar than Reeves’ former employers.
Cutting the size of the state would be infinitely better than punishing wealth creation and growth through higher taxes.
Moreover, it would lift a burden for future generations in the shape of unfunded, gold-plated, defined benefit pension arrangements. Taking the axe to Lloyds has not come cost-free for customers.
UK banks have closed one in three branches over the last five years and Lloyds is in the forefront of a cull which harms the elderly, infirm and smaller business, and partly is responsible for turning some high streets into retail deserts.
One understands the needs for efficiencies and recognises that for Generations X, Y (the millennials) and Z even the thought of entering a bank branch is anathema.
Yet all our personal financial lives have become more complex. Everyone, especially in the face of Labour’s attacks on savings, needs better advice on issues ranging from mortgages to trusts.
Branches are a unique selling point that AI bots at low-cost fintech rivals don’t have. Cutting into the branch muscle will eventually prove an enormous blunder.
Building better
As part of his impressive defence of Angela Rayner in the Commons this week, Prime Minister Keir Starmer cited the Housing Secretary’s accomplishments.
He asserted that she is driving the Government’s target of 1.5m new homes.
He didn’t mention the manifesto pledge is for this Parliament and moving ever further into the distance.
Latest data from Standard & Poor’s shows construction slowed for the eighth month in a row in August and is in its longest downturn since 2020.
Housing starts are among the factors driving the stagnation. It wasn’t meant to be like this.
Labour’s planning reforms, which seek to drive a coach and horses through nimbyism, don’t appear to have made a jot of difference.
The Bank of England’s five cuts in interest rates may make some mortgages more affordable.
But trouble in the bond markets, where ten-year gilt yields have been rising, may make attractive, longer fixes less accessible.
Still, it is not all gloom. Rachel Reeves’ £120billion of extra investment is having an impact.
There is celebration in the West Country at the vast expansion of HMP Channings Wood in Devon and jobs created for local contractors.
Crime does pay, after all.
Fast-charging
The brave defence by Currys boss Alex Baldock from raiders Elliott last year demonstrates the value of staying listed.
After a stonking 17 weeks to the end of August, the value of the electrical retailer’s shares are up 33 per cent this year and are now worth £1.4billion – twice the abandoned offer from Elliott.
Resistance does pay off.
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