Osborne’s meddling has left RBS in chaos

Mark Kleinman
Follow Mark

FRED Goodwin famously complained that he had been the victim of a “drive-by shooting” when he was ousted as the boss of Royal Bank of Scotland (RBS) in 2008.

His successor, Stephen Hester, appears to have succumbed to a less violent assassination – but an assassination it is nonetheless.

Last month, Sir Philip Hampton summoned the state-backed lender’s non-executive directors to a meeting at which he informed them that he had been “told to sack” Hester, according to a person familiar with the discussion.

It beggars belief that George Osborne would be so foolish as to do that explicitly, since it would leave him open to the allegation that he has been acting as a shadow director of RBS.

Yet even assuming he did not – and Treasury officials insisted that Hester had not been sacked – the most prominent inhabitant of 11 Downing Street appears to be making some fanciful assumptions about the ease with which he will identify a third disposable chief executive.

If a new face is needed to oversee RBS’s reprivatisation, it is far from obvious that a six-month search is going to be sufficient to recruit and install a new boss, and certainly not one of Hester’s calibre.

The process of realising a profit from the taxpayer’s stake will take many more years – or it may not happen at all. Mr Osborne’s meddling has left RBS’s boardroom looking shambolic once again.

From one state-backed lender to the other.

Not so long ago, news that the chairman of one of Britain’s biggest banks was stepping down would have triggered a stampede of City grandees to replace him.

Not any more – but as Sir Win Bischoff prepares to bow out of Lloyds Banking Group, there may not need to be.

Already, the smart money in Westminster and the Square Mile is being thrown largely in the direction of another FTSE-100 chairman.

Gerry Grimstone’s CV could hardly be more perfect for the post. As Margaret Thatcher’s ‘privatisation guru’, Grimstone helped to orchestrate the vast state sell-offs of the 1980s.

With George Osborne expected to signal his ambition of beginning the sale of the Government’s Lloyds stake at Mansion House next week, Grimstone would be the ideal man to oversee it.

Telling Sid would make more sense with Gerry on board.

Moreover, Grimstone is in the market for a new job. As chairman of Standard Life since 2007, his departure is inevitable in the medium term anyway.

There’s another little-known piece of Whitehall history that unites Bischoff and Grimstone. When Alistair Darling rejected two candidates to chair the Court of the Bank of England in 2009, it was those two men who received the rejection letters.

There are too many factors weighing in Grimstone’s favour for him to receive such a letter from Lloyds.

Vodafone probably thought it was striking a blow for corporate transparency when it published a country-by-country breakdown of its tax affairs last week.

Instead, the mobile phone group found itself in the crosshairs of campaigners after disclosing that it had paid no UK corporation tax for the last two years.

Hardly surprising, then, that other FTSE-100 companies are unwilling to follow Vodafone’s lead.

Andy Halford, its chief financial officer, might also find himself persona non grata at the next meeting of The Hundred Group, the club for Britain’s top beancounters.

“The Group is not in favour of country by country reporting so I would not expect it to become a trend,” sniffs another blue-chip finance director.