The economic crisis has shaken the faith of many in capitalism itself. I can’t pretend to be entirely immune from such feelings. But I suppose the bigger shock to one’s system is the realisation that the suave bankers counting their bonuses in the boardroom don’t have any more idea of how to run their businesses than the doorman twenty floors below.
Yesterday’s papers were full of righteous indignation against the bosses at Lloyds TSB who have ruined their bank, and put it into the Government’s hands, as a result of its takeover of Halifax Bank of Scotland. An article in the Sunday Telegraph mentioned the ‘catastrophically imprudent decision taken last autumn’ to merge with HBOS. ‘Eric Daniels and Sir Victor Blank took Britain’s safest bank and turned it into a basket case,’ ran a strap-line in the Sunday Times, referring respectively to the chief executive and chairman of Lloyds TSB.
It’s all true, of course. A picture of Sir Victor’s self-satisfied face can ruin one’s morning. He and Mr Daniels have helped bring down the only British bank rated ‘triple A’ by Moody’s, a bank thought to be more conservative than the Vatican. The newspapers are all agreed about the utter stupidity of the takeover.
And yet in a spirit of fairness one has to point out that last September the press was virtually unanimous in welcoming the deal. A few writers pointed out that the merger would almost certainly lead to higher mortgages because the new mega-banker would be a dominant player in the market. But the general feeling was that the ultra-conservative Lloyds would be a saviour of the miscreant, ill-run HBOS.
I stand to be corrected, but I can find no paper which slated the deal at the time on the basis that it would finish off Lloyds, and require more taxpayer funding. The Sunday Times, now so angry, reported excitedly on 21 September 2008 that Sir Victor Blank ‘has set out his ambition to turn the combined group into a top ten international bank within five years.’ The Sunday Telegraph ran a highly sympathetic interview of Mr Daniels on the same day under the headline ‘Quiet American rides to the rescue.’ The ever perspicacious Financial Times reassured its readers that ‘a Lloyds TSB- HBOS merger looks the best way forward.’
As the weeks went by, several commentators did begin to express misgivings – for example, Jeff Randall in the Daily Telegraph on 11 November under the headline ‘There is something smelly about the takeover of Halifax Bank of Scotland by Lloyds TSB.’ At the time, though, there were few, if any, such misgivings. Financial PR types, backed up by government spin doctors, appear to have persuaded newspapers that, so far as the future well-being of Lloyds was concerned, there was nothing much to worry about.
Of course, every journalist makes mistakes. My own columns doubtless comprise a roll-call of bad predictions. The interesting point here, though, is that the financial pages did not criticise a deal with which six months later they find so much fault – after it has gone pear-shaped. We journalists, who berate bankers and politicians for their incompetence, also get things wrong ourselves. And I wager that this particular story is not the only occasion during the credit crunch when we have done so.
This is one election that will not be decided by the newspapers
As he slips further below the water, Gordon Brown is personally telephoning editors more than he has ever done before, trying to make sense for them of the bewildering array of Government initiatives, and to convince them that everything will turn out for the best. It all looks a bit desperate, and I don't suppose it will do him much good.
The Prime Minister's traditional, though always tentative, defenders on the Right, are The Sun and, to a lesser extent, the Daily Mail. Both are gradually distancing themselves from him, though neither has yet formally disowned him. No newspaper wants to be roped to a political leader as his head bobs beneath the foamy main.
Mr Brown, despite his best efforts, cannot excite much enthusiasm among old friends on the Left. It cannot be long before columnists such as Polly Toynbee and Jacqui Ashley on The Guardian turn against him – as they did last autumn. This time they will have to be absolutely sure that he is finished since, having ditched and picked him up again once before, they can hardly do so again without appearing idiotic.
David Cameron, by contrast, is spending less time buttering up editors, though naturally he dines with them from time to time. The Sun would be a prize worth winning, but the timing of such an alliance is in the hands of Rupert Murdoch, the paper's owner. I imagine that the Tory leader will get the old man's endorsement at the eleventh hour, though by that time it won't make much difference. Brown will be toast.
Mr Cameron seems to have realised that neither the Daily Mail nor the Daily Telegraph is ever going to love him, though both papers will, of course, support him as the general election looms. It's always nice for a Tory leader to have the Tory press rooting for him, but on this occasion Mr Cameron doesn't really need it. He has a 20-point lead in the polls without any newspaper having broken sweat for him.
So we live at an odd time. On the one hand there is Gordon Brown, neither feted by his old friends nor yet wholly eviscerated by his enemies. On the other, there is David Cameron, the subject of an occasional sympathetic piece in the left-wing press, but rarely receiving more than a polite pat on the back from those who are supposed to be his friends.
More than in any general election I can remember, the press seems peripheral to the probable outcome. No newspaper wants to fight for Mr Brown, but nor does any feel inclined to go over the top for Mr Cameron. There is a sense that the electorate is making up its mind with little help from the press. It won't be one of these elections such as 1992 in which newspapers strove to shape the outcome, and may have done so. They neither feel they can, nor perhaps would want to even if they could.
Of course, no one will ever say as much. Newspapers do not generally care to admit they have limited political sway. I would certainly not state that they do so as a universal rule, only that this will be a general election in which the people, not Her Majesty's press, will decide.
Old deal puts pressure on Lebedev's new Standard
Alexander Lebedev's London Evening Standard does not so far seem very different from the one owned by Associated Newspapers. If anything, it has so far edged downmarket rather than up. No doubt its new editor, Geordie Greig, has more ambitious plans afoot. It seems he may not be joined by his new deputy, Sarah Sands, for several months, as she has to extricate herself from the editor's chair at Reader's Digest.
There is, meanwhile, one bone of contention that could grow quite serious. Some Standard journalists reportedly bridle at the presence at their conferences of staff from London Lite. It seems odd to them that the newspaper should still be supplying editorial to the London freesheet.
Before Lebedev bought it, the Standard was obviously weakened by its relationship with London Lite. One sometimes hesitated before shelling out 50p for the newspaper in the knowledge that the giveaway contained many of the same stories. After Mr Lebedev acquired 75.1 per cent of the Standard, leaving Jonathan Rothermere with only 24.9 per cent, my assumption was that the relationship between the two titles would change, and that London Lite would no longer be permitted to undermine the Standard by publishing some of the same pieces.
I seem to have been wrong. An Evening Standard spokesman was quoted last week as saying that it is "business as usual" so far as the relationship between the two papers is concerned. If this is true, it appears that the ex-KGB man Lebedev was on the receiving end of a hard bargain. It would obviously be better for the Standard if its readers knew they could not find the same stories in London Lite for free. On the other hand, it must suit Associated to be take stories from the better resourced Standard, for which they presumably pay a fee.
It's not all share and share alike for Michael Grade at ITV
Michael Grade, ITV's executive chairman, was paid a total of £924,000 in 2008, less than half the £1,934,0000 he received the previous year.
Given ITV's appalling results unveiled last week, along with announcements of redundancies and cuts in programme budgets, Mr Grade had little choice but to accept a reduced a pay package. Nonetheless, he did receive a bonus amounting to 28.5 per cent of salary.
More worrying to me, though scarcely criticised by other commentators, was his disposal of 304,153 ITV shares on 31 December last year. John Cresswell, the company's chief operator officer and finance director, sold 145,697 shares at the same price.
The disposals were perfectly legal and within the rules, but that does not make them right. Both men should have suspected that trading conditions would deteriorate, and that ITV's share price might fall further. As I write, it stands at 20.5p.
Wouldn't it have been more seemly – as well being a rousing show of confidence in ITV's future – if both men had hung on to these shares?