ALEX BRUMMER: Hartigan’s lack of shame knows no bounds

The lack of shame by Mark Hartigan knows no bounds. The ousted chief executive of mutual insurer LV has waltzed off into the sunset waving a £485,000 farewell cheque, bringing his 2022 earnings at the insurer up to £767,000.

There can be no quarrel with boardroom pay at firms successful in delivering value to shareholders and which look after the interest of colleagues, suppliers and consumers.

Hartigan did none of this.

Rewards for failure: Ousted LV boss Mark Hartigan tried to sell the 180-year old membership-owned life company to private equity outfit Bain Capital

The former army officer, like the Grand Old Duke of York, marched his troops up the hill and endeavoured to sell the 180-year-old membership-owned life company to private equity outfit Bain Capital.

After a spirited public campaign against the transaction, supported by this paper, Hartigan was forced to march down the hill having wasted £43m on advisers’ fees.

If the sale had been successful then Hartigan, as its architect, was expected to transfer his services to the world of private equity where there are rich, unseen rewards.

Under Hartigan’s direction the insurer sought to persuade 1.2m members, many of them elderly, that the deal was necessary to bring in capital and expand the enterprise. 

This was patently misleading in that the life company had topped up reserves when it sold its car insurer (which trades under the same valued name) for £1.1billion to the German financial giant Allianz.

What is most disturbing about Hartigan’s mission was that it flew in the face of the best interests of the members.

The wasted advisory fees could potentially have contributed to the next bonus on their insurance policy or pension.

To see Hartigan leave the scene clutching a golden goodbye is the ultimate insult.

In three short years he collected more than £3million in earnings and exposed members to worry about the future of their savings.

If he had an ounce of decency he would return his exit payment so it could be used towards improved member services.

Falling star

There will be much teeth-gnashing that the City of London’s own ranking system for the world’s most competitive centres elevates New York to the same status as the Square Mile.

Singapore, followed by Frankfurt, are in third and fourth positions.

What remains indisputable is the importance of finance to the UK. It generated £278billion for Britain in 2022 – 12 per cent of total output – and employs 2.5m people.

It will be argued in some quarters that the City’s diminished status is down to Brexit.

Reality is that among the reasons that the UK has lost some momentum are antiquated listing rules which make the London markets less attractive to tech start-ups.

Wall Street has scaled the rankings because of the growth in tech investment, deal making and sources of sustainable capital. All of this is capable of being fixed.

Prime Minister Rishi Sunak is focusing on tech and entertained digital innovators at Downing Street this week.

A strategy document is due in the autumn. Britain’s capability in tech innovation lags only behind Silicon Valley and China – but financial conversion from start-ups to quoted stars is surprisingly poor given Britain’s finance expertise.

Changing market rules might help. But upping the UK’s R&D spend, rejoining Europe’s Horizon project and equipping British finance with better venture capital tools, such as guaranteed loans through the British Business Bank, are also essential.

There is no time to be wasted if the country is to lift its game.

Spain’s gain

The 10.4 per cent surge in UK inflation in February was a shocker, fuelled by food supply problems.

There is, nonetheless, confidence in Whitehall that it will fall dramatically – perhaps by as much as 5 per cent in the coming months, as fuel costs and food price hikes fall out of the consumer prices index.

This can happen. Latest data from the eurozone shows inflation in Spain, remarkably, halved from 6 per cent in February to 3.1 per cent in March. In energy-strapped Germany inflation dipped from 9.3 per cent to 7.8 per cent.

The big problem in the UK is the stickiness of core inflation, with the service sector using the cover of the pandemic to raise margins at the expense of consumers.

When Bank of England Governor Andrew Bailey criticises business over ‘greedflation’ he is on the right track.

This post first appeared on Dailymail.co.uk