|Bankrupted by a pact of Gord Posted by Fraser at 8 58 PM on Saturday, February 14|
EVERY time Gordon Brown wants to find a banker to blame for the recession, he faces a rather embarrassing problem.
Their names normally start in ‘Sir’ or ‘Lord’. Titles HE quietly arranged for them during the boom years.
And that reminds us why Britain is risking bankruptcy—the unholy alliance between politicians and bankers.
Staggeringly, taxpayers may soon end up spending billions bailing out yet ANOTHER bank, Lloyds. Cash that can only be found by saddling future generations with even more debt.
Once, we paid taxes to fund schools and hospitals. Now our tax pounds go to bailing out banks and paying their bonuses.
It’s like there has been some coup d’etat—instead of taxpayers owning banks, the banks now own the taxpayers.
I’d love to blame the bankers, to say their greed has driven us to bankruptcy. But it’s far more complicated than that.
Right at the very start, New Labour struck an unspoken deal with the men who would be their pinstriped paymasters.
They’d be granted a free reign to take all sorts of risks. London would become the biggest casino on earth. As Peter Mandelson famously said, Labour was “seriously relaxed about people getting filthy rich”.
But with a catch. The government wanted its cut. The bankers would pay shedloads of tax, and they’d keep the party going as long as they could.
Apart from bordello owners and Ferrari dealers, no one looked forward to City bonus day more than Brown’s ministers.
The Treasury took a 40 per cent stake in every windfall. At one stage, a quarter of all UK tax was from financiers.
Amazingly, the bankers even wrote government policy. Sir Derek Wanless on the NHS. Lord Sandy Leitch on skills. So, slowly, Britain became a bankocracy. What we called “prosperity” was, in fact, a bubble waiting to burst.
I have no idea just how Gordo ever thought he could shovel blame on the bankers, with whom he was in cahoots for so long.
All trails lead back to his door. Exhibit A is Sir James Crosby, the former HBOS chief last week accused of sacking a whistleblower.
Just as everyone was getting read to lynch him, it turns out he was Brown’s appointment to the Financial Services Authority watchdog.
This is why he was ousted from the FSA faster than a Chelsea manager. He embodied the link between ministers and the banks.
There are plenty other links too. Take the disastrous shotgun marriage between Lloyds TSB and HBOS, which may sink them both.
Who was the matchmaker? Our very own Prime Minister, over a drink with his mate Sir Victor Blank, chairman of Lloyds.
In his rush to be seen to be acting—to be “saving the world” as he unforgettably put it—Gordo landed us in a mindblowing new mess.
Only now are we beginning to understand the cost of this. Remember the £37 billion to save the banks? It’s gone. All it took was a write-down here, multi-billion loss there—eye-watering sums, gone at the stroke of a pen.
Never in British history has so much taxpayers’ money been destroyed so quickly. And the bonfire of your cash is still burning.
It means this generation—and the next—will be paying higher taxes and getting worse services.
Even our PM, with his famous inability to say sorry, must now regret cutting his Faustian pinstriped pact all those years ago.
Because Britain now looks like one massive, collapsed hedge fund, a bust bank, with a struggling government attached.
Worst of all, no one knows what more is in store. This mother of all busts is still just starting.
COULD this be the most embarrassing David Cameron quote ever? “Governments across the world have put into practice the principles of monetary discipline,” he said. “The result is a world economy more stable than for a generation.”
That was in September 2007. A reminder that no one, in any party, saw this coming.