Sir George on Peston: he’s a Treasury puppet and it’s a disgrace

In Blog by Ian Fraser2 Comments

16 November 2008

Former Royal Bank of Scotland chairman Sir George Mathewson doesn’t think too highly of BBC business editor Robert Peston (who was lampooned in Silly Money, tonight’s Bremner Bird & Fortune programme). In an interview published in today’s Sunday Times (Mathewson: Riding to the rescue of HBOS), Mathewson who retired from RBS at the age of 65 in April 2006, said: “I think it is disgraceful that everything the Treasury knows goes straight to Peston. It’s shocking. They are telling him everything. He has become an instrument of the Treasury now. He is not an independent reporter any more. He is in the pay of the Treasury.”

Mathewson, who was interviewed in his Perthshire home by Gillian Bowditch, was echoing the views of many people I have spoken to on this topic.

The Serious Fraud Office is still deliberating as to whether to grill Peston about the sources of his “scoops”, a move that was instigated by Conservative MP Greg Hands with the backing of shadow chancellor George Osborne. And in the House of Lords last Tuesday, Lord Forsyth of Drumlean, the former Scottish secretary, demanded that, at the very least, a Commons select committee should be established to quiz Peston.

Mathewson is, alongside former Bank of Scotland boss Sir Peter Burt, seeking to depose the pair of incompetents who have as good as destroyed HBOS, Lord Dennis Stevenson and Andy Hornby.

Given that the latter pair “capitulated” on September 16th, effectively admitting they had so damaged HBOS it has no future as an independent bank, Mathewson and Burt believe the bank deserves a second chance. They are, in my view, right to do so. Initially, they want to install themselves as chairman and chief executive and block the takeover by Lloyds TSB. Mathewson and Burt argue that the Lloyds deal is bad news for HBOS shareholders, its employees and probably also its customers,  and that that the financial backdrop has changed since the Lloyds/HBOS deal was struck on September 18th. I believe the only reason they are not being given a fair hearing is that government’s spin cycle is so powerful.

Back in September,  prime minister Gordon Brown was still so shellshocked by the Northern Rock experience he was prepared to contemplate virtually anything short of felony — including waiving competition law — to permit the creation of an anti-competitive Superbank that will cause some 30,000 to 40,000 job losses and restore the UK banking oligopoly.

In his Sunday Times interview, Mathewson said that the strategy being employed by Brown and Lloyds TSB (and by extension by Peston – and indeed their other government mouthpieces in the UK media) is simple scaremongering, aimed at terrifying HBOS shareholders into submission. He said that he cannot comprehend why Brown, a Scot, is so antipathetic to the proposal to keep HBOS independent. Mathewson said: “In order to facilitate the Lloyds TSB transaction they’ve put the fear of God into the HBOS shareholders. That’s the strategy, government strategy, as well as Lloyds TSB’s strategy … Gordon is using the fear tactic. That’s what he always falls back on.”

Mathewson also argued that top bankers’ salaries are now too high, saying that he only ever got one bonus in his career at RBS and this was for £500,000 in the year of the NatWest takeover. “I think salaries are too high. The people who can do these jobs are thin on the ground but those salary consultants and all the PC stuff that goes on round about it has put salaries up, not down.”

He also said he was appalled at what has happened to his alma mater, RBS, which is now to become a nationalised institution. Mathewson, 68, suggested that under his successor as chief executive, Sir Fred Goodwin, the bank was doing too much trading on its own account. “I think it is absolutely tragic. I’m sad for the ordinary people working in the business. RBS was a fabulous place to work. It had the highest staff approval levels in the world. For a while now it’s been miserable. It’s horrendous.”

Interestingly Peston has at least one defender.

Lord Peston, a Labour peer and emeritus professor of economics at Queen Mary College, said in the Lords in response to Forsyth: “I want merely to point out, in reference to a first-class journalist who gets his stories perfectly legitimately, that we do not need an inquiry. We just need to have excellent journalists doing their job properly.”

Might these two be related by any chance??!!