Otherwise it would suggest that the Lloyds directors and politicians favoured the Co-op on purely financial and reputational grounds, rather than ideological ones.
And that would make them look very foolish indeed given the mutual’s subsequent spiral downwards into financial trouble and deepening ignominy.
Better misplaced Machiavellianism than outright incompetence in the corridors of the Treasury and Lloyds’ Gresham Street HQ.
Conspiracy or cock-up theories, notwithstanding, it is now probably of only academic interest to City and Whitehall grandee Lord Levene and ex-Northern Rock turnaround boss Gary Hoffman, who jointly spearheaded the rival bid by NBNK Investments.
However, the duo gave every indication at yesterday’s meeting of the Treasury select committee that they believed they had been playing with a rigged deck in favour of the Co-op throughout the bid process.
Every time the Co-op missed a deadline it seemed they were given a more accommodating one. A prescient long memo detailing NBNK’s identification of the real risks in the Co-op’s bid, notably its dubious financing, seemed to have “fallen down the back of the sofa” in Lloyds chairman Sir Win Bischoff’s office, according to the dry and never knowingly excitable Levene.
The peer, who has ruled out legal action over the affair, said he asked everyone from Bischoff and Chancellor George Osborne to the Financial Secretary to the Treasury and contacts on the public accounts committee whether the Lloyds sale was being politically driven to allow the Co-op to emerge winners. NBNK must have felt they were operating in a partisan fog.
Levene was assured this was not the case and that the contest for the Project Verde assets would be decided on purely commercial grounds.
These assurances were rendered somewhat hollow by the former governor of the Bank of England Lord King telling Levene privately in May 2012 that the rumours of political intervention had foundation.
For Levene, that experience in the governor’s office must have seemed akin to God telling you Father Christmas doesn’t exist.
And, fittingly for a sophisticated civil servant and financier, Levene did not demur from the notion expressed at the committee yesterday that Lloyds might have always preferred a flotation of the Project Verde assets anyway.
This theory is that the bank outmanouevred the Whitehall machine, and could be phlegmatic at allowing its arms to be politically twisted before the Co-op was given enough rope to hang itself.
Don’t bet on any rise in interest rates just yet
It HAS been a long time since Britain was best in class in the International Monetary Fund (IMF) school. The IMF, which not too long ago warned George Osborne that his austerity programme might be too austere, has raised its UK growth forecasts for this year to 2.4 per cent from 1.9 per cent.
That is a bigger upgrade than for any other nation and will give the Chancellor a glow. But the IMF has told countries that the macro recovery is too fragile to withdraw stimulus rapidly. Still low UK interest rates for a while yet, then.