I love the BBC Radio 4 Today programme, and listen to it every weekday. But this morning's (23rd February) episode had me shouting at the radio. Michael Fallon, MP, member of the Treasury Select Committee, and James Barty, of the Policy Exchange, were interviewed by Evan Davis following the Royal Bank of Scotland results announcement - a £700 million loss in 2011 compared with about half of that in 2010. In the context, that's not actually too bad a set of results.
Evan Davis asked Michael Fallon questions with the drift that we need to change track - sell, hold, or do something else:
(a) the Government should dispose of its RBS shares now and 'cut its losses'
(b) "why do we need to get our money back, we know we've lost the money"
(c) if not then clearly investing in banks is good, and we should buy a couple more
(d) if share price is going to go up why don't we buy more shares
(e) or maybe we should break RBS up into smaller businesses or mutualise
James Barty thought it would be a good idea to give away the shares but with a clawback for the Government when selling. This would remove the Government overhang of 83% of the shares, and reduce political interference in the bank's management, but it's never been tried in this country. [Given the known track record of public sector information systems, it could even be a struggle to identify eligible reciipients in a reliable way].
Here's a link to BBC iPlayer - the segment starts at 07:52 (1hr 52mins 15sec into the recording).
Harm is already being done to the financial sector in this country, with the media fanning the flames of an anti-business culture. The Government is damaging the valuations of banks by imposing stricter banking regulations far faster than competing countries.
The drift of the interview was disappointing, and the questions badly thought out. It's really unhelpful to the aim of recouping the full public stake in RBS, for the BBC to probe for ways to destroy the value of assets that we're seeking to
sell. Stephen Hester has charted a course - stop rocking the boat.
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