WHEN Alistair Darling and Gordon Brown, rightly, in my view, threw a £37 billion lifeline to banks that looked to be almost dead in the water, they missed the chance of being less reliant on the judgement and performance of the same people who had helped create the crisis, by their cavalier policies.
The dynamic duo knew that although the banks couldn't escape the blame for irresponsible lending, both in allowing customers to get in over their heads in personal spending, and in playing the lead role in the great housing market farce, they were di
fferent from other companies.
Although there was widespread genuine regret that Woolworth's had finally fallen victim to the vagaries of the market, and there is astonishment that Wedgewood and Waterford are teetering on the edge of wipe-out, putting aside the personal tragedies contained in the grim reporting of rising unemployment statistics, it's in the nature of capitalism that the gaps they leave will eventually be filled.
But big banks like RBS, Lloyds TSB and HBOS are so integrated in every aspect of our individual lives and corporate structures that the degree of difference between them and even the biggest of big high street names justifies the government intervention to protect the public interest.
But why did the PM and the Chancellor imagine that the big bosses who had paid themselves such big bonuses for allowing the country's total personal debt to reach a total of £1.4 trillion would go back to the careful style of lending that used to be the hallmark of banks whose probity was an incalculable asset in the UK's global standing? How was the public interest of £37 billion, and probably a whole lot more billions to come, to be protected without there being guardians of the public interest appointed to the bank boards?
When I suggested the idea, Alastair Darling gave short shrift to what he saw as non-banking professionals poking their laypersons' noses into management. Does he still hold to that, when it's perfectly obvious on looking around Edinburgh at the catastrophic effects that could flow from the banking professionals' refusal to use some of the public's money to lend to some businesses, to keep them alive?
The boards want to build up their capital again before lending to suit the community interests. Public interest protectors on the boards would be likely to take a broader view. But the Chancellor's appointments suggest that he thumbed through the reference books for the old boys' (or girls') network in financial services when he named new board members.
He should hang about a few bus queues or supermarket check-outs. He'd be more likely to meet sensible, public-spirited citizens capable of balancing the banks' obligation to pass on that £37 billion, and more, to builders who'll spend it sensibly on building lower cost housing in and around Edinburgh for example, and keeping interest rates at a level that encourages personal saving for a deposit to buy them.
Paying for itOF course the SNP has taken too long to admit that its version of getting private finance into public projects isn't possible. And of course the Labour Party is irresponsible to burden future generations with such a lottery over who eventually owns the schools, hospitals, etc, built with PFI.
Also, we now know that PFI is a very expensive way to provide public facilities. But it's been equally obvious for ages that the Westminster government wasn't going out of its way to help the SNP find a cheaper or fairer way of public investment.
So the SNP Government could demand the right to borrow to finance the new Forth road bridge. After all, in Westminster, Brown and Darling have thrown away the rule book for so-called prudent financial management to keep the UK economy going, Or else Alex Salmond, John Swinney and the others should agree to build it the Labour Party's way, with a regular bulletin published showing how the money stacks up and an equally regular request to Labour for a note on which services or projects should be junked to pay for it.
Here's a hint . .I LISTENED to a report from the Gaza/Israeli border that informed us, without adjectives or emotion, that nothing could really change for the better in Gaza until Hamas had been defeated. The reporter seemed well-informed on the events of the previous 24 hours and admirably restrained in his language, but he was also either supremely arrogant and unconsciously biased, or ignorant of events prior to the previous 24 hours. He never as much as hinted that Hamas had won an election.
But there is a reason for the Israelis' disproportionate and literal overkill. It's not the more deadly rockets fired from Gaza . . . it's the Israeli election, stupid.
