The BBC still running interference for the Labour Government

Yesterday I blogged about the way the BBC and especially Robert Peston were using the smokescreen of Sir Fred Goodwin's pension arrangements to obscure the real story which is the accusations made by Lord King and Lord Turner to the Treasury Select Committee.

Bow I read The Telegraph reporting that:

"Mervyn King told the Treasury Select Committee that in economic terms the banks were overwhelmingly under public control. The declaration shatters the Treasury's repeated insistence that the banks, which are majority-owned by the Government, should still be classified as private sector companies.

Mr King said: "The Government owns more than 50pc of the equity [in RBS and Lloyds] and can take its decisions accordingly.

"I don't see a significant difference between that and outright nationalisation – except in the sense that this system we have now has the merit of trying to make it clear to everybody that nobody thinks the Government should be running these banks indefinitely."

In his testimony, Mr King also acknowledged that the amount of public money needed to be put behind the banks was "deeply shocking". However, he said that while keeping the banks technically private-sector would help remind people that they would ultimately end up back in private hands, he added: "The economic substance is clear. The taxpayer has had to put in so much money to ensure the viability of these banks and is now contributing the majority of the equity capital, as well as a vast amount of public support in terms of lending to these banks." "

The BBC prefer to concentrate on a bit of banker bashing whilst the real story goes almost unreported.