iot was founded shortly after Victoria ascended the throne, and over the intervening 178 years a few changes have naturally been made. What was once the Liverpool Independent Legal Victoria Burial Society later became Liverpool Victoria, and now calls itself, rather tersely, LV=. Where agents used to go door to door collecting pennies to cover funeral costs, today the brand is slapped on everything from pensions to pet insurance. The HQ has shifted from Liverpool to Bournemouth. But one big and rare thing remains in place: LV is still owned by its customers, all 1.2 million of them. That makes it one of Britain’s last great mutuals. For now.
If all goes according to its board’s plans, the company will soon be sold to the giant American private equity firm Bain Capital. Members have until early next month to vote on the takeover, but the website presents it as a done deal. Directors claim the buyout offers “an excellent financial outcome for members”; most are promised £100 for surrendering their ownership of a major insurer – a paltry sum compared to the £6,000 members received when Scottish Widows was bought by Lloyds TSB more than 20 anni fa. Directors also say the deal will give “unrivalled support for the LV brand”, although they have been tight-lipped about the 11 rival bids received, including from fellow mutual Royal London. Well-paid executives and their lavishly remunerated advisers have cooked up a boardroom deal that is bad for the rank and file who are now expected to rubber-stamp it. The lack of communication with policyholders and members is so bad that the Financial Conduct Authority (FCA) ha publicly chided LV. Directors have shown a striking combination of high-handedness and cack-handedness.
The chair is most famous for his role as managing director of the Post Office while it was prosecuting blameless branch operators for its own IT shambles. The chief executive in charge of tossing away LV’s history has only been with the company since last January – less time than many customers. And the would-be buyer has given no firm commitments about jobs or investment. Private equity groups have a long track record of minimal corporate stewardship and maximal extraction. No wonder Labour and other opposition parties are up in arms.
A hue and cry at Westminster, allied with a rebellious membership, may just break up this particular boardroom party. But it is no way to run a takeover regime. Over the past few months, big names have been swallowed up by private equity, Compreso the supermarket chain Morrisons, the outsourcing firm G4S and the retirement-home provider McCarthy & Calcolo. In the first six months of this year alone, private equity paid £34bn for UK plc: a substantial reconfiguration of corporate Britain, which largely happened out of the glare of the press and parliament. As the FCA notes, it has no legal right to consider the corporate form of potential buyers, whether they are private equity barons or social enterprises. It is high time MPs rectified that. For too long, the political class has turned a blind eye to who owns our newspapers, banks and water companies – and to what end. But ownership matters. Just ask the 12 firms queueing up to buy LV.