A self-made construction magnate with a Wolves scarf usually draped around his neck, Steve Morgan has been building red brick homes for 40 years. For at least half of that time, the Liverpudlian been dropping verbal hand grenades about Britain’s dysfunctional planning system.
Over the years, the Redrow chairman has bemoaned “emotional, scaremongering claptrap” from Nimbys whose attitudes, he reckons, risk returning Britain to Victorian squalor. And he has grumbled that his company spends more on council bureaucracy than on bricks.
His latest outburst yesterday was directed at “tatty” green belt land deemed sacrosanct from development, arguing that if the government truly wants 200,000 new homes to be built annually, it needs to open up plots around the edges of Britain’s towns and cities.
His irritation is understandable. Britain has a council-led planning regime in which each local authority is supposed to come up with a development blueprint on where it wants new homes to go. Yet 45 per cent of councils have no plan, relying instead on ad hoc rulings through planning appeals. Local politicians find this easier, afraid that any masterplan for building, anywhere, will upset neighbouring voters.
We have a chronic shortage of affordable homes: a typical house costs seven times income. The government’s “Help to Buy” scheme has helped 48,000 people to buy a property, yet still only about 130,000 homes are being built annually. We were building more homes in the 1930s than we do today.
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Ironically, the squeeze means bumper earnings for builders: Redrow’s annual profits have rocketed by 91 per cent, driven higher by soaring prices. And there are a few encouraging signs: a shortage of materials is easing as brickmakers fire up their furnaces, and the number of apprentices on building sites is on the up.
Mr Morgan’s comments, though, are more than a self-interested rant by a builder. Planning reform has become a top priority for business. Without a more flexible regime, we’re doomed to a future of unaffordable homes.
Accounting shame
Britain’s ninth largest accounting firm should hang its head in shame. A top London partner at Mazars is the subject of a brutal censure by the Financial Reporting Council over his failure to safeguard the pensions of thousands of off-licence workers.
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Richard Karmel, a managing partner with 23 years’ experience, was called in to offer impartial advice to the trustees of First Quench’s pension fund when the drinks company proposed offloading responsibility for the scheme to an investment firm, Pension Insurance Corporation, in 2007.
In a 56-page document, the accounting industry’s disciplinary panel accuses Mazars of failing to do its sums properly in working out whether the new sponsor company could afford to maintain the £75 million scheme, which was responsible for the savings of staff working behind the counter at Threshers and Wine Rack shops.
Mazars’ man is cleared of dishonesty but accused of “professional incompetence”. And it gets worse: he allegedly was a “friend” of an executive at the Pension Insurance Corporation and he showed a lack of objectivity. The supposedly independent accountant even advised the scheme’s new sponsor to withhold information because it “may not help the case” for the deal.
This is precisely the type of unethical chumminess that gives the City a bad name. Mazars failed in its duty to look out for First Quench’s employees in a transaction of such complexity that trustees, let alone pension scheme members, relied on professional guidance.
Between them, Mazars and Mr Karmel have agreed to settle for £2 million and have suffered “severe reprimands” — in other words, they’ve been sent letters telling them not to do it again. Clients of Mazars may be surprised to learn that Mr Karmel remains in his job. He is lucky that his industry regulator is relatively lenient — the FRC has struck off only five accountants since 2012.
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Blinding fee
Think Ray-Ban sunglasses are expensive at £150 a pair? Well, here’s a clue to the reason. Luxottica, the brand’s Italian parent company, has decided to hand its departing chief executive an eye-watering €45 million payoff.
Andrea Guerra is leaving in a huff because Luxottica’s founder, Leonardo del Vecchio, has decided to reinstall himself as chairman and to appoint two co-chief executives under him. Why have one boss when you can have three?
The group’s brands range from Oakley to Sunglass Hut, the retail chain. Its designer sunglasses have been selling very nicely, thank you: profits hit €4.8 billion last year.
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Explaining Mr Guerra’s exit, Luxottica has added a new term to the bulging lexicon justifying boardroom pay. Mr Guerra will get a “redundancy incentive” of €10 million to reward him for accepting the rest of his €35 million severance money. How very civilised.