The perennial scandal of the glacial pace of cheque-clearing is back in the news. Computers may be shrinking the world in all kinds of ways. Money can be whizzed anywhere at the click of a mouse. But the time it takes to clear a cheque is actually getting longer.
As I reported in the London Evening Standard the other day, Abbey National has just increased the time it takes to clear cheques for the half-million people who use its Instant (hah!) Plus account and its new basic bank account. The wait has been doubled from four working days to eight. Abbey's explanation is that these accounts are more susceptible to being used by fraudsters, and so it needs more time to ensure the money is really there.
Waiting eight working days means you deposit a cheque on a Thursday or Friday, and twiddle your fingers for two weekends before you get your mitts on the money. Most of that time, the banks on each side of the transfer have had access to the money and have been earning interest on it. It's curious that the banking industry alone has managed to sustain the sanctity of the weekend. Shops open, planes fly, newspapers get printed, electricity flows. In other words, the rest of the commercial world carries on. Yet the banks that operate the payments system - the financial plumbing on which the business world depends - seemingly can't hire a few people to continue processing cheques between Friday afternoon and Monday morning. Why not?
Like Marks & Spencer, Boots is a company about which everyone has an opinion. Doubly so now because it has dumped its chief executive, Steve Russell, and appointed a new one, Richard Baker, a 40-year-old whizz-kid from Wal-Mart. Just how much of the Wal-Mart approach ("I'm Richard and I'm Happy to Help" lapel badges, staff chants at the start of the day, and so on) is applied at strait-laced Boots remains to be seen. City opinion about Boots has been sniffy for as long as I can remember. Certainly, the company has made mistakes. It has wasted a fortune on R&D that didn't pay off. It spent £200m developing a heart drug, Manoplax, which had the unfortunate side effect of hastening death. It tried unsuccessfully to transplant the Boots brand around the globe. It has tried diversifying into all kinds of alternative health treatments, from acupuncture to aromatherapy. But it seems people wanting alternative treatments want them from someone - well, alternative, not a high street name.
Despite all these mistakes, the group has performed reasonably well. (I should declare an interest here as a small shareholder.) The core UK chemist chain churns out the profits regardless. In terms of total shareholder return, Boots has produced 99 per cent over the past ten years. In other words, if you had bought shares ten years ago and used the dividends to buy more shares, you would have almost doubled your money.
This may look niggardly beside the heroes of the high street such as Tesco (up 232 per cent) or Dixons (up 158 per cent). But against pretty much everyone else, it is good: Marks & Spencer (13 per cent), Sainsbury (minus 25 per cent), Body Shop (minus 33 per cent), or Kingfisher, the owner of the B&Q group (50 per cent).
So why does Boots receive such a kicking from the City? Could it be simply that the City gets less in fees from Boots than from virtually any other blue chip of comparable size?
For the past 15 years, Boots has barely spent anything on acquisitions - the ultimate sin as far as merchant bankers are concerned. It has raised not one penny in fresh capital - the ultimate sin as far as the share underwriters are concerned. And in one of the great coups of stock market timing, it ploughed its entire pension fund into bonds at the top of the equity market, slashing its annual pension management bill in the process from £10m to £250,000 at a stroke.
Boots executives just aren't playing the plc game. Perhaps this is what the City can't forgive.
Warren Buffett, the world's second-richest man, seems to be getting more of a lefty by the day. The Coke-slurping, McDonald's-munching tycoon may be seen as a cheerleader for American capitalism. But he no longer sounds like one.
At a press conference on 4 May, he berated executives for fat-cat pay, bewailed the morals of investment bankers and attacked the fiction recently produced by accountants.
Meanwhile, here is Buffett on the merits of wealth redistribution. Explaining why he plans to give away most of his $35bn fortune rather than leave it to his family, he said: "There's no reason why generations of little Buffetts now . . . and a hundred years from now should all command the resources of society just because they came out of the same womb. What sort of justice is that?"
Patrick Hosking is deputy City editor of the London Evening Standard
