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Lloyds: compensating taxpayers

Robert Peston | 18:12 UK time, Thursday, 8 October 2009

The Chancellor isn't going to let Lloyds out of the Government Asset Protection Scheme (GAPS) without extracting a price.

The Treasury saved Lloyds earlier this year by promising to provide it with the protection of GAPS - which was a statement that taxpayers would absorb 90% of future losses on £260bn of poor quality loans and investments.

In that sense, taxpayers were giving a valuable pledge that losses Lloyds may incur on reckless loans would not kill the bank (to be fair to Lloyds, most of those reckless loans were made by HBOS, the bank it bought in such controversial circumstances).

So even if GAPS has not yet been created in a formal sense, Lloyds has been benefitting from the offer of GAPS for months: taxpayers have been keeping the bank's head above water.

How much should Lloyds now pay for being kept out of Davy Jones's locker by Alistair Darling?

Well a 1-1.5% fee on the implicit increment to Lloyds' capital generated by the APS would seem a reasonable starting point for negotiations.

That de facto capital increment was just under £16bn. So a 1% fee would see Lloyds paying just over £150m to the Exchequer.

Lloyds' board may haggle about the size of the break fee - but I am told its directors are reconciled to paying something.

And they also know that the Chancellor will force the bank to honour one very important commitment it gave when initially agreeing to the APS - and that was to increase by £14bn the volume of credit it makes available to businesses and households.


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  • Comment number 1.

    Interesting addendum.

    Looks like Lloyds are going to make the announcement tomorrow then.

  • Comment number 2.

    The APS scheme will not help Lloyds achieve the new regulatory standards on core capital and leverage multiples in the long term. What it actually needs is a huge injection of fresh capital and if the private sector is willing to provide this then Darling should bite both it's hands off.
    If the gov's real agenda is to build a more robust private sector financial system then it will go for the private sector solution of extra capital injection, if it's not then what is it really trying to achieve??

  • Comment number 3.

    Are Lloyds about to make their second colossal mistake?
    (the first was when their eye was bigger than their stomach and they tried to swallow the poisoned HBoS).

    They are in no way out of the woods with HBoS toxic loans.
    Everywhere in the past year or so that I have seen a daft company who over-borrowed, guess who had encouraged them to take more.

    If I was Lloyds I would be forever grateful of the GAPS protection -cheap at twice the price.

    Lloyds hoping the market will believe they are worth £40/50 billion depending on disposals? Dream on........


  • Comment number 4.

    As I think that based on what my business informants have told me regarding 'real' credit availability. And the level of guarantee.
    15bn over 5 years is a good amount to ask.

    Is there not 'goodwill' clauses in contracts these days?

  • Comment number 5.

    Lloyd's problems stem from the government forcing them to take on HOBS instead of letting it go into bankruptcy or nationalizing it, if thy had thy could of sacked Fred the shred and saved millions, as for the 14bn of credit for businesses and households I doubt this has happened?

  • Comment number 6.


    It would be stupid, and dishonest, of the government to set the bar so high on LLoyds that it is damaged further, perhaps fatally. Stupid because we would be shooting ourselves in the foot by hitting straight at the value of our 43% stake in Lloyds - worth far more potentially in the long run than any short term gain the Treasury might get from the APS. Dishonest because everyone knows that some reassurances must have been given to Sir Victor Blank and Eric Daniels in that famous meeting between Brown and Blank in Sep 08 and on which it seems the Government and the Treasury, who must have been involved, may be reconsidering those assurances. We would need to see the correspondence to ascertain whether that is correct - fat chance.

    We should disregard the FSA and Europe (Neillie). They had their chance to stop the monopoly being formed, and failed to act at any time between Sep 08 and Jan 09 when the deal was sealed.

    This is about taking a long term view, and being pragmatic. Lloyds is too big, and has to shed some savings and mortgage business. Everyone would agree on that. However, not right now, when it would be nothing more than a fire sale. In the meantime, Daniels has to play this right - it is too late for him for anything other than redemption for taking Lloyds into one of the worst deals in corporate history. If he is able to swing it that would some recompense to hard-hit shareholders.

  • Comment number 7.

    ......14 billion loans to business and households who neither need it nor can afford it. Isn't this the sort of thinking that got us into trouble in the first place?

  • Comment number 8.

    Can we pretend to be French and just ignore the EU? Or like the Italians who never pay any EU fines? Or the Germans who have made their own parliament superior to the EU? If only - then being in the EU would be a pleasure.

  • Comment number 9.

    Chancellor Darling is desperate for a political "Coup" in the middle of the Conservative Party Conference

    These are games to keep Cameron form ongoing headlines

    Lloyds should simply line up and take its medicine. It bought HBOS and it most certainly did not have to. All the warning signs were there and the decision makers deserve what they get from this fiasco.

  • Comment number 10.

    Nice to know the bank's directors are "reconciled to paying something". How considerate of them. If these greedy banks were treated by the government in the same way as banks rip off their customers the pips would really be squeaking. Caledonian Comment

  • Comment number 11.

    Stop skirting the real reason for our woes Peston and explain the jaw-dropping shockingly fraudulent practice of the fractional reserve system to which all the banks are guilty of perpetrating on the unsuspecting man in the street .. Go on, I dare you.

    Even the Bank of England is ignoring requests from hundreds of people from all walks of life, for more clarity under the freedom of information act.

    Are you brave enough to pull your finger out of the dyke?

  • Comment number 12.

    As a reluctant shareholder in Lloyds (from my poisoned HBOS holding)would I consider, after the value of my holding in HBOS went from something to nothing, consider adding to my worthless company with more hard-earned cash?

  • Comment number 13.

    I'm not sure I fully understand why Lloyds should pay anything to Darling

    An implicit need for GAPS is not a contract...or is it?

    Let the government pull all its money and destroy all the rest of the value it has "invested" in too

    If there's no contract and I was in charge of Lloyds I might just be giving a two fingered salute, especially if they can raise the capital elsewhere...after all the government agreed that their shareholding would have no one on the board to affect day-to-day management of the business

    Competition is what usually keeps businesses alive, and if Lloyds can get their money cheaper elsewhere why shouldn't they. Is darling just being the spurned lover

  • Comment number 14.

    It's probably fair that the government should get a windfall from Lloyds, but please let it be after the election. If they get one now, it will be spent before it hits the bank account.

    On another note, I hope that someone from Lloyds spills the beans on Crash Gordon and Dangerous Darling's involvement in the HBOS takeover. All the juicy details of the sordid affair please - abut 2 weeks before the election.

  • Comment number 15.


    "Lloyds should simply line up and take its medicine".

    Only one problem with that argument. Unless you are not part of the UK the Lloyds you are talking about is 43% us. Thus for every 1bn the Government can get for Lloyds when it is eventually sold (assuming it dos not go bust in the meantime) we, you and me, get 430m. It wouldnt take much for the value to us in Lloyds to be worth as much as the Tories were claiming on their Osborne measures on Tuesday.

    The decision makers who you say deserve what they get are us. Our government put up the 43% and we elected them.

  • Comment number 16.

    There was a huge error compounded today - not raising interest rates for the seventh month.

    Without money having a positive price all of this talk of bail-outs and repayments and asset protection schemes is just fantasy and results only in a mythical 'recovery'. We are still being fooled out of our cash! And the economics commentators haven't even chosen to notice! Shocking!!!

  • Comment number 17.

    I personally think Lloyds will do everything they can to avoid having to sign up to the GAPS, already I suspect they are hard at work reducing the 43% stake us taxpayers currently hold.

    I have shares in the Lloyds, and at the last rights issue the offer was 38p per share. If memory serves they were almost all taken up and they have more than doubled in a few months, so I don't think there will be any problems raising more from private investors.

    Whilst there have been lengthy and often heated debates about the rights or/and wrongs of the bank bailouts - one key fact is that tax payers money should/will be repaid and it is better for all of us if this starts happening soon.

  • Comment number 18.

    LloydsTSB were always a cautious middle ground bank .The decision to buy HBOS must have been influenced by the Government.That or LloydsTSB didnt look at the numbers properly. It may say publicly that it believes it was a good medium term move but look at how it u turned over closing/opening again C&G branches when the EU" too big a bank" news came . Any more indecision is unacceptable. Lending must be encouraged to business more than personal customers.Surely the banks focus should be on attracting funds and encouraging savings now not increasing personal debt.

  • Comment number 19.

    Get this.

    I have been in a meeting with my bank this afternoon: the Bank of Scotland, part of the Lloyds Group. They've just told me and my business partner that the Bank has neither the funds nor the desire to support our business any longer; just like that. Our working capital facility has been summarily withdrawn. No more cheques will be honoured. Our business relationship manager left us in no doubt that our job was to find another bank, fast.

    Don't let anyone tell you that Lloyds Bank is providing credit to its customers. The banking mafia is looking after its own, using money being printed furiously by the Bank of England to shore up their own banks' balance sheets. Citizens of the UK be warned: we are being robbed blind ... by the UK banking mafia, aided and abetted by our stinking political elite.

    This country is going bust. Ironic really, given that our Dear Leader spent years telling us that he'd eliminated boom 'n' bust (before going on to save the world).

    My company is about to go bust, whilst the bankers and politicos draw their salaries, expenses and bonuses just like they ever did ... all funded by us taxpaying mugs.

    Somebody had better sort out this unholy mess fast, before people like me start taking to the streets.

  • Comment number 20.

    moraymint -

    My company has just been offered a 5 million quid extention to its overdraft facility by the Bank of Scotland that it neither requested, needs or wants - with no charge for the unused part of the facility.

    I guess the bank can be seen to be offering the credit to businesses - provided the customer has no intention of taking it up.

    It's a funny old world, isn't it? You have my every sympathy.

  • Comment number 21.

    I' m sure that Lloyds are already thinking about how to fill the taxpayers gap with whatever electronic diddle doe that comes to hand .

    Bankster fat cats are like spiders they will carry on spinning even when their are no silk purrs left in their sows ear.

  • Comment number 22.

    The p;urpose of near zero percent interest rates is to preserve the appearance of solvency through avoiding compound debt interest on government credit crunch card debt to inkfinity and beyond, whilst banksters carry on rewarding themselves for looking after the non existant ponzi pie in the sky .

    Lloyds will definately extend credit CRUNCH SERIAL to their best customers ie those ready to pay the overdaft charges that count as earned inkome and form the basis of banksters bonuses [solvent buisinesses can go to the wall]

    We all have Gordon to thank for keeping his pointy index in the dyke although I remain unconvinced that its Gordons "index " or the city "dyke"

  • Comment number 23.


    That would be a wonderful idea, but, what is the consequences of the
    reimbursing the taxpayers...If they don't have enough money!

    ~Dennis Junior~

  • Comment number 24.

    Morning Robert,
    I like to read this blog to find out what the Government would like us to know/believe.
    Didn't a bank raise funds so that they wouldn't have to pay the 9% coupon on preference shares?
    Now we have Lloyds after ANOTHER £15 billion, and RBS trying to raise more cash as well (allegedly).
    Something is very wrong here. Are taxpayers (shareholders) in these banks allowed to know if these banks are insolvent (or is this money being raised to pay bonuses- just like the £37 Billion last year).
    I would like all of the major banks to be profitable and perform a banking service but it would seem that this is not likely in the near future.
    As a previous contributor pointed out, these bad loans have not disappeared they are just being priced at what is convenient on the balance sheet. The bad loans will get worse when interest rates increase, which I guess will be sometime in 2010.
    Will you, Robert, comment on the rumour that BOE is trying to downgrade or even remove the savings guarantee provided by all our banks at the moment?
    With respect to Lloyds policy, I find it incredible that a 43% shareholder has no say in the way that the bank is run, but then taxpayers were not asked if the two banks should merge nor if they would like to commit even more money into these financial black holes.
    Is it this Government or a previous one that wouldn't support lame ducks?

  • Comment number 25.

    I am a retired Engineer, (a proper one with an apprenticeship and an honours degree), who seems to understand less and less of the banking system. I always thought that the banks used their depositors money to lend to people, either business or private, to help them get what they wanted or needed. Profits were generated from interest on these loans which paid the bank staff's salaries and interest on our savings accounts.
    I cannot understand how bankers have beeen allowed to rip its customers off to line their own pockets. They raped us during these scams to sell poison loans to each other world wide yet when they got into trouble they expected.... AND GOT....massive loans from taxpayers to bail them out.
    Why are not these bankers who made such massive bonuses being forced to pay back their excessive sums? Why do we still have to continue giving them their bonuses? Why are the banks continuing to receive support from governments worldwide whilst still ripping their customers off.
    I have been using Lloyds TSB Bank, as it is now, for 46 years. Having supported them for that time I was amazed yesterday to be offered a loan by one of the now many managers in my branch to buy a new car. I did not ask for a loan, I was simply paying off my credit card and was waylaid by this person. I was offered a loan of £14,000 at an interest rate of 17.9%. When I pointed out the the Bank of England was lending them money at 0.5% interest I was told that they had to get their money back some way or another.
    We, as taxpayers, pulled them out of the deep, brown smelly stuff and now it looks as THEY are rubbing our noses in it.
    Anybody have any idea where I can go to bank?

  • Comment number 26.

    # 17. jikster wrote:

    "I personally think Lloyds will do everything they can to avoid having to sign up to the GAPS, already I suspect they are hard at work reducing the 43% stake us taxpayers currently hold."

    If they applied up to the scheme, as mentions of £260bn suggest, and the guarantee was promised, they would seem to be committed, even if the scheme has not officially started, and therefore liable to pay.

    As Robert has stated, they have subsequently benefited from the security that has given them.

    So of course they should pay for the extremely cheap "insurance" they have been given (considering the risk profile at the time and nobody.
    The taxpayer "only" owns 43%, so although in some ways we pay part of the fee ourselves, we don't pay it all. Shareholders may complain, but it must be remembered that those shares would have been worth nothing without intervention (so the taxpayer only owning 43% isn't exactly great value for the bail out).

    "and that was to increase by £14bn the volume of credit it makes available to businesses and households."

    Not just replace and maintain lending but to "increase" it!!!
    As others have mentioned, that's the mentality that got us into the mess in the first place... but what's the solution to problem caused by excessive debt, lend more; sometimes it beggars belief.
    The notion of lumping lending to businesses and households together also appears illogical...
    As highlighted by moraymint's unfortunate situation above for which I have every sympathy, businesses need working capital to survive and in the rare cases where its applicable in the current climate funds to invest to expand.
    Viable businesses being driven under due to cash restraints does nothing to help the economy, and especially if it results in unemployment does nothing but harm to the nations finances .

    Increasing loans to individuals seems to be motivated by one primary reason factor - to support house prices, something that doesn't really offer any benefit and in many ways has proven to be a dangerous mentality.
    With capital repayments surely loans to individuals should be reducing gradually.

    # 25. fedupbankuser

    Yes its shocking..
    That interest rate margin is why low interest rates aren't encouraging investment in the "real" economy.
    BoE base rates are all well and good, but only really have an impact in financial circles (including government borrowing) and lo and behold on mortgage rates - once again propping up house prices.

    The savings rate being pretty much nothing is nonsensical given that banks have supposedly needed additional funds (so why don't they pay for them) and driven by the government [BoE] providing these funds at an unrealistically low rate.. which doesn't make much sense when the state needs to borrow so much.
    So in many ways, financing of the banks means we pay to reduce the earnings on our own savings... and the banks are set up to milk ordinary customers further.

    "Anybody have any idea where I can go to bank?"

    I have always liked the concept of mutuals, so the mass of demutualisations, especially when driven by carpet bagging, in the 90s was a considerable disappointment and in many ways can be seen as one of the seeds of the recent financial chaos.

  • Comment number 27.

    #19 Moraymint.

    For what it is worth, my deepest sympathies.
    The Govt. tell the banks to lend, the banks will only lend to those who have no inclination to take extra borrowing. So they can say they have met the usual uselss Govt. abstract target.

    (Just like credit cards used to be; if you asked for an increase, you were refused. If you didn't ask, your limit was raised.)

    Get a hold of your MP and tell them to start working for you.
    Then talk to a foreign bank. They are going to move in and fill the void.

    Regards & good luck.

  • Comment number 28.

    #19 Moraymint.

    From earlier posts you have made, I am sure you have been in business for over 5 years. Didn't the Govt. put in place a loan guarantee scheme to underwrite the banks' risk for looking after customers who find themselves in a similar erstwhile position as yourselves?

    If you opened a deposit account equal to the bank's remaining exposure and assigned it to the loan, then the bank is presumably covered in toto.... and can give you what you need.

    Or was that scheme abandoned as soon as it was found to be potentially any good.

  • Comment number 29.

    I'm not much for conspiracy theories but Lloyds has all the symptoms. Lloyds buy HBos, without doing due diligence, against the wishes of staff and shareholders (the shareholders who voted for it were HBos who were about to lose everything), pushed through by the Govt, even though it contravenes the monopolies regulations. The Govt then tries to tie up Lloyds with a bail out in excess of 50% (which they didn't quite manage) and they are now making it all but impossible for the bank to extricate itself - deposits are going to Nat Savings and N.Rock, so Lloyds are missing on the deposits to lend against, the loans have got to be water-tight, which in the current economic climate is almost impossible, and yet they are being ordered to lend more, and without the lending they have problems making the money to pay back the Govt and so the taxpayer. The Govt need to back off and let the bankers get on with their jobs - but I suspect that Labour will not be happy until they have the entire banking system in their sticky mitts!

  • Comment number 30.

    The gloves are off , the governments first goal is not the well being of Lloyds it is balancing the books, with growth dead and a Treasury budget front end loaded with growth from now to April our debt mountain is only going North of £175 billion, with a lot more to come for 2010/2011 onwards.

    Without the tax payer, Lloyds / RBS would be worth nothing, so the government needs to get tough and insist on the best returns for the tax payer, because in the next few years this money WILL be the difference between sacking nurses or keeping them on..

    Come of GB start fighting,the banks are doing nothing apart from screwing UK businesses and customers on fees ,interest on deposits and lending. They are rebuilding there balance sheets on the backs of hard working people and companies.

    I am no leftie but perhaps consideration should be given to a new UK government bank specifically designed for lending for small and medium sized businesses,at the moment private banks are acting like a cartel and not giving real value to the people in the UK. Its obvious to all the existing private banking system is not working for customers...

  • Comment number 31.


    It is true that taxpayers were not asked if the two banks should merge, but then before the merger was put on the table at the now infamous meeting between Brown and Blank there was no taxpayer shareholding.

    It is said that Lloyds were urged into the merger to save the banking system. I have no doubt that HBOS and RBS should have been allowed to be put into administration and that the whole fabric of the two banks should have been unravelled in the same way that Northern Rock has been treated. Partial state ownership gives us the worst of all worlds and loss of public funds, real and potential.

    In my view there are many culprits in all this, none of whom includes either the tax payer or the ordinary shareholders of Lloyds, HBOS or RBS who have been duped.

    1. The management of each of the banks who indulged in appalling practices not seen before in banking in my lifetime.

    2. The regulators at the FSA and in Europe who were asleep on the job and let them do it. Now they try to set rules as if the monopoly at Lloyds has just come to their attention - rules that would involve fire sales of assets against the interest of the 43% owner (us)

    3. The government, who feted the bankers, knighted them, and made them feel like gods. Then ran for cover at the first sign of trouble, having stoked up the boom that made it all possible.

    4. The auditors, who have not been mentioned too much in all this, but must have failed totally to conduct proper audits.

    5. In LLoyds case the institutional shareholders, who had the muscle to stop the bid, but owned shares in both banks and saw Lloyds as the saviour of their HBOS money (they lost it in both).

    6. The politicians, including Vince Cable, who said nothing while times were good, but then suddenly emerged post hoc as a great guru.

    7. The media, who write copious words on the subject, and seem to know every nuance of the problem and how to solve it, but said nothing between 1997 and 2006.

    The banks are being pulled in several directions at the same time. They have to get their Tier 1 capital ratios in order, but at the same time lend money at 2008 levels. A total nonsense - in practice they will always salt the money away. Yet as shown by others on here it is working against the interests of hard working people who need and deserve a break.

    Memo to Gordon and Alastair - this is your problem - sort it.

    3. ,

  • Comment number 32.


    Could you find out and tell us whether UKFI are going to particpate in the new share subscription and who will be underwriting it.

  • Comment number 33.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 34.

    27 is bang on, here come the chinese........What affect will this have on the taxpayer 'investments' in UK zombie banks?

    You guessed it folks........................................Bust!

  • Comment number 35.

    25 Fedupbankuser

    I feel your pain! Last week I went to see my 73% public-owned bank "relationship-manager" to try to organise some bridging finance to secure a retirement property for a relative. The loan would be secured to the tune of 180% by a property currently being sold by that relative and 100% by assets that I could offer as security. The answer...I could have 70% of the new property value at 9%!!!

    Charging 8.5% above base for a totally secured loan is usury and I let them know this. They wriggled saying that something might be negotiated but I'll go elsewhere.

    The situation is identical to the early 90s when, if you'll recall, the banks last took a bath by reckless and indiscriminate lending in the 3rd world...a goodly portion of which was never repaid. What did the banks do then? Did they pursue creditors? No, they rebuilt their balance sheets off the backs of their domestic customers. Does anyone else recall the era of receiving letter informing you that you were £3 overdrawn and charging you £28 for that letter?

    Well here we are again, with the banks frantically trying to recapitalise at our expense. The difference this time is that they have already been in receipt of literally squillions of pounds in public money, have promised to make credit available to business at a fair price, but are manifestly reneging on that undertaking. The present government have utterly failed to ensure that banks use their public largesse to the benefit of the nation. Sadly, I don't believe that the incoming government will do anything different and it is the poor Joe who will, as ever foot the bill.

    It used to be a maxim that "if you owed the bank £500, they had you by the short and curlies", but "if you owed the bank £5 million, it was the other way around". The unintended consequence of Gordon Brown's intervention is that we, the public, are entirely at the mercy of the bankers. We can't even pull the funding without bankrupting the nation.

    If George Osborne could come to the table with a set of measures to correct the public finances that also involved disciplining the banks in addition to freezing the pay of the less well off and taxing the **** off the better off...he would get my vote.

  • Comment number 36.

    25. At 03:08am on 09 Oct 2009, fedupbankuser wrote

    "I cannot understand how bankers have beeen allowed to rip its customers off to line their own pockets."

    The banks own the government, not the other way round. Therefore there is no concept of "allowed". Look up "federal reserve act" "fractional reserve lending". Effectively banks control the money supply, and he who controls the money supply controls the nation.

    I would look at Co-Operative bank.

  • Comment number 37.

    30 Hughesz

    I'm absolutely with you there. I too am far from being a leftie but there is now a clear cut case for a publically owned bank to handle the business of the small customer and small company. Sadly, there used to be just such outfits in the shape of Girobank, National Savings Bank and several others. The argument for their abolition was based around the principal that it was unfair that these banks were in competition with private banks (the same argument currently being directed against the BBC by Sky et al) so away they went.

    Surely now this argument is defunct. The private banking system has shown itself to be incapable of behaving responsibly, either to its customers or shareholders. I would not advocate nationalising the banks permenantly but there is now a very strong case for a national bank to run alongside private equivalents, providing retail current and deposit services, small retail loans and small business services at reasonable rates. This might reintroduce a sense of humility to the sector!

  • Comment number 38.

    Do you think there was a message for business at the Conservative Conference?
    Ken Clarks session was the most upbeat of the week despite the downbeat times we are facing!
    I've just arrived back from Manchester. It has been a hugely inspiring conference on many levels and I think I really need some time to take it all in. The Conservative Party have so often been criticised for spilling rhetoric and not having any policies. David Cameron's Conservative Party have always had policies. Many of them have been adopted by Labour!
    The modern Conservative Party also recognise some areas where Labour policies have succeeded. They not only acknowledge the fact but give clear indication that they will protect and improve in those areas.
    One of the most moving events at the conference for me was the full length video of Cameron Direct. David Cameron is one of the greatest leader of the Conservative Party of all time, if not the greatest. History shows that leading the Conservatives is one of the toughest roles any man or woman could ever have. It was the cause of Margret Thatcher's downfall. She did not fail in being a Prime Minister. She did not fail as a stateswoman. She failed as leader of the Conservative Party.
    David Cameron is not only a great leader of the Conservative Party but someone who is truly and totally motivated at being in touch with the electorate. His leadership comes from listening to real people. He is not in politics for money. I don't think he is there for glory. I think he is a good man who really desires the best for all. He cares about the weak and the needy. He has plans to motivate and gain the best from all. He has a huge respect for those who give to society and to our country. His vision is that we as a nation have great talents and that with good leadership we can achieve things that are beyond our imagination right now. These things do not seem to be above his imagination and if there is anything that I have taken away from the conference it is that he has seen a great potential in the people of the United Kingdom and that he will lead us to not just to aspire to more than we can imagine but to achieve also.
    I think if you ask me when I have had time to digest the whole experience - What did I come away with?

  • Comment number 39.

    16. At 10:03pm on 08 Oct 2009, John_from_Hendon

    Excellent point - whilst the media is obsessed with individual banks and their woes they are missing the really big stories and not letting the public in on the really painful stuff.

    I think it's 7 months of rates of 0.5% and still there aren't any signs of a tangible recovery (merely bull traps created by Government stimuli and forlorn hopes of investors who are in too deep to be able to climb out)

    I would also note this story regarding the purchase of dollars by Asian banks - a very risky strategy. If it works and the Dollar recovers - then fine, however if the Middle East decide to drop the greenback in favour of a basket of currencies then the Far East is going to have a banking crisis all of it's own.

    You won't find this story on the 'front page' - but buried somewhere deep inside.

    In comparison to these major financial events the trouble at Lloyds is insignificant - even though the bank is a large one.

  • Comment number 40.



  • Comment number 41.

    38. At 10:38am on 09 Oct 2009, Johnnie_London

    Thanks for the party political broadcast - but did you fall asleep at the conference and dream half of it?

    Where is your hope coming from when George Osbourne announced some pretty drastic and unpopular cuts / pay freezes which amount to about £7 billion - which is not really much to knock off the £175 billion the Conservatives are saying has made this country 'bankrupt'?

    Sounds like we're doing something into the wind.

    If you had watched question time last night maybe you will have seen there is very little difference between each party and the differences there are, are simply immaterial.

    Both paths lead to disaster as both parties blatantly refuse to recognise the fundamental causes of Economic collapse and tinkering with the dials on the car is not going to fix a broken engine.

  • Comment number 42.

    39, So the dollar is safe ?

  • Comment number 43.

    42. At 11:17am on 09 Oct 2009, JavaMan1984 wrote:

    39, So the dollar is safe ?

    As solid as a rock - a Northern one....!!

    Everything depends on the Middle East at the moment, and I don't think the US are historically in their good books.

    We're going to see some serious "brown nose" diplomacy coming out of the US soon as they try to save their currency.

  • Comment number 44.

    #40. JavaMan1984 wrote:



    worse, Amazon Turk

  • Comment number 45.

    37. At 10:37am on 09 Oct 2009, Anglophone

    I am impressed with your logic - but you realise once you state that lending has to be a function of the state - then you start down the road of inevitable comparisons....
    The Post
    Energy production and supply

    All too big and important to the public to be allowed to fail aswell. The logical conclusion must be that these must also be state run.

    P.s. To clarify - by 'state' I do not mean 'Government' as this is the current scam to transfer everything back to the private sector at a cost to the public.

    ...and what's that called? I can't think of the word but it begins with C....

  • Comment number 46.

    43, The dollar will likely fail.............The far east will have to take the pain as the middle east, china and south america & france (along with others) have all but agreed the dollar should go.

  • Comment number 47.

    moraymint said:
    "My company is about to go bust, whilst the bankers and politicos draw their salaries, expenses and bonuses just like they ever did ... all funded by us taxpaying mugs.

    Somebody had better sort out this unholy mess fast, before people like me start taking to the streets." someone tell me that hard working legitimate businessmen (or women) making statements like this is not a sign of impending revolution.

    The BBC have attempted to play down the crisis this morning by indicating that Union membership is much less than in the 70's so there will be no repeat of the winter of discontent.

    A few years ago it took a small band of irate hauliers to bring this country to a complete standstill such is the danger of our 'just in time' Economy.

    Moraymint's is a common story I am hearing - a story of banks pulling funds which 2 years ago they would have happily advanced without question. Property deals falling through and businesses not being able to borrow to cover the loss in revenue.
    Strange that.... especially as the news keeps telling me how 'lending is increasing' and 'the Economy is recovering'.

    Are you all getting it yet?

    Depression is a steady downwards trend highlighted by occasional 'blips of life' - the blips are being highlighted by the Government and media as 'the norm' to give the impression of recovery but the overall trend is downwards.

    .....just like the US in 1929....

    I'm not joking folks - I'm already buying up canned food as it lasts longer.
    If I'm wrong then I'll have a baked bean party - however if I'm right you'll all be knocking my door for handouts - but as I am a humanist you will be welcome to share in what I have.

    Want to know why lloyds are really keen to get out of APS and loose the Government stake?

    - so they can follow their instincts and reduce their lending as they will be free to make the rational decisions to ensure their survival in a recession - i.e. not lending to people for the sake of a Government target against your instincts.
    Unfortunately this is contrary to the needs of the public / consumer and the Economy.

  • Comment number 48.


    "as the middle east, china and south america & france (along with others) have all but agreed the dollar should go." there's a line I never thought I would see in my lifetime.

  • Comment number 49.

    ....don't take my insane word for it - listen to a man who saw this coming...

    "easy money chasing assets"

  • Comment number 50.

    44 lol

  • Comment number 51.

    ....speaking of 'big mistakes' - here comes another one...

    JJB are going for a £100 million rights issue just as nearly everyone else does the same (like Lloyds, Ladbrookes etc.) and what are they planning to raise the money for?

    "Observers say it will use the rights issue to revamp shops and buy stock. "

    I don't think the lack of customers has anything to do with your (presumably) shabby shops and lack of stock.
    Either they have lost the plot or the real reason for the rights issue is simply 'survival'.

    Good luck JJB.

  • Comment number 52.

    Anyone noticed how preternaturally calm Eric Daniels seems during all this? Add the fact that until recently he was one of the heaviest FTSE CEO smokers and has recently given up. Should Andrew Marr be asking some embarrassing questions?

  • Comment number 53.

    I do feel sorry for Lloyds.

    Who are the beneficiaries of those £260bn of poor quality loans and investments made by HBOS. Could much of £260bn be frauds and swindles, with insider help, disguised as "poor quality" loans and investments?

    Where is the money now?

  • Comment number 54.

    There was a story which did the rounds in the 80's (Big Bang)
    Everyone was so busy, no-one had time to stop for lunch.
    Someone had a tin of tuna, so he offered it for sale.
    Each person who bought the tin, held it until he got a better offer.
    Nobody opened the tin or ate the tuna.
    It got to £60, then -either Black Wednesday or Pink Tuesday or something happened in the markets- and the tin dropped to 2p.

    Of course when at that point you might as well have the tuna lunch...
    Rancid tuna..

    The tin was worth £60 only as long as 'the market' believed its value could only increase......

    Cut to today.
    There is barely a company in the FTSE 350 currently worth more than the tin of tuna, yet the market buoys itself up with dutch courage, and goes ever higher.

    I smell rotten fish.


  • Comment number 55.

    megagodfrey22 wrote:

    Lloyd's problems stem from the government forcing them to take on HBOS instead of letting it go into bankruptcy or nationalizing it.

    This is complete and utter nonsense!! As Lloyds Group employee, we have seen various bids knocked back previously because of the competition commission enquiry (including Northern Rock). Although I don't agree with it morally, LTSB wanted the deal and saw the capital behind the balance sheet and a healthy customer base. What they did not know was the extent of the impairments that HBOS held in loans. Many of these did not come out until after year end when commerical/housing property prices had been depressed even further and the debt had grown further.

    The government did the right thing for the country and after seeing the impact of Lenman collapse in the States did not want the domino effect to hit banks here.

    Further to this if we had let the other banks go bust, it would have impacted many customers, businesses and staff that did work in the finanical sector and the high risk takers would still have walked away anyhow like Fred the Shred

    Incidentally, many of the toxic loans are tied up in Ireland and Australia. And we won't mention too much about Ireland with their ability to create fiscal stimulus locked in because of their committment to the Euro!!

  • Comment number 56.

    #25: Try the Co-op bank.

  • Comment number 57.

    #47. writingsonthewall wrote:

    "The BBC have attempted to play down the crisis this morning by indicating that Union membership is much less than in the 70's so there will be no repeat of the winter of discontent."

    Or perhaps they are simply reporting reality?

    You see conspiracies everywhere, positively revel in gloomy news and have been gleefully predicting social and economic meltdown for months. You must be absolutely gutted that the world continues to turn, day after day, and that the vast majority of people just get on with their lives.

  • Comment number 58.

    In the 1960s, 70s and later, various UK governments have master-minded the re-organisation of our car, aircraft, ship building, steel, motor-cycle and much of the rest of our manufacturing industries. They pushed and promoted mergers and took into state ownership. What was the result? We have ended up with close to no manufacturing.

    But, Tony Blair said it didn't matter. We could survive pefectly well on service industries, notably finance and banking. We would be the great post-industrial economy (and satisfy Kyoto in the process). For a short while, it seemed to work. Or was it just a bubble driven by house price inflation?

    If the present government's interventions in the banking sector have the same success has the ealier ones in manufacturing, where are we going?

    Is the UK to survive on tuition fees from foreign students attending our universities?

  • Comment number 59.

    57. At 1:41pm on 09 Oct 2009, rbs_temp

    "You see conspiracies everywhere, positively revel in gloomy news and have been gleefully predicting social and economic meltdown for months. You must be absolutely gutted that the world continues to turn, day after day, and that the vast majority of people just get on with their lives."

    rbs_temp - you're back! I thought you might have floated off into bubbleland

    Ah and how things haven't changed. Well you might think I'm gleefully predicting social and economic meltdown - but there's no glee here I can assure you. I don't relish the thought of power cuts, no post, no bins being colected and civil unrest anymore than the next person. However should I simply be getting on with my life?

    So are the near 3 Million unemployed now simply 'getting on with their lives'?
    Are the 110,000 bankrupt people from last year and the expected 150,000 from this year all getting on with their lives?
    Are the 40,000 homeowners who are no longer homeowners (from 2008) and the predicted 75,000 from this year all getting on with their lives?

    Don't forget - a few weeks ago you didn't think there was a recession at all, because you weren't personally experiencing one. However once a tirade of people on this blog corrected you I thought you realised that you can't rely on your own personal situation as an indicator of the wider picture.

    I have a job, and a house, and no desire to borrow money, but I don't assume that so does everyone else.

    With regard to the BBC's reporting, well it's convenient they reported the union membership so readily but were not so keen to point out that the Lindsey oil depot strike earlier this year was a watershed.

    I'm no expert on industrial relations but as I understand it Mrs Thatcher introduced a law which outlawed such unofficial strikes. However the strike which brought Total to the table was effectively illegal and demonstrated you don't need a union to protect your jobs - you just need solidarity.

    I sincerely hope you're still around in 12 months time so we can continue this discussion of worker solidarity as we picket outside the Royal Bank of Scotland at the upcoming cuts - don't forget if you work at RBS it makes you a public sector worker these days....

  • Comment number 60.

    56. At 1:34pm on 09 Oct 2009, goodthinkinggeorge wrote:

    "#25: Try the Co-op bank."

    Unfortunately this will be a pointless excercise for moraymint as he will be asked by the co-op why he is switching banks.

    When he tells them why they will reject his application as he will be seen as 'high risk'.
    The Co-op pride themselves on sensible and prudent banking so why would they take on another banks rejects?

    I have found this to be the case in my own situation very recently.

    Moraymint, and I are two of the growing number of 'financial outcasts' who are wandering the banking wilderness at the moment finding that there is "no room at the inn" no matter how desperate things become.

    That is how the credit system works.

  • Comment number 61.

    #53 puzzling

    "Who are the beneficiaries?"

    HBOS was part of a lending consortium that funded the buyout of McCarthy & Stone. The retirement home builders.
    It all went pear shaped for them and now they are bank owned.
    HBOS exposed to north of 200 million pounds.
    But everything is still functioning.

    I suppose you could consider that there is now a new super trading entity.
    Publicly (state) backed private industry.
    Is McCarthy & Stone publicly owned?

    HBOS is just following the money though. The grey pound.
    Only retirees have liquid money nowadays.
    Obviously it is just waiting to be repatriated to the banks.
    Via McCarthy & Stone of course..

  • Comment number 62.


    I agree with your summary except for one thing. I do not believe it is the place of the government to actively promote a bid such as the Lloyds bid for HBOS which was in clear contravention of the country's competition rules, even if behind the motive was saving the banking system. Rules are set to provide a basis for proceeding in a proper manner, in this case to prevent a monopoly situation, and if the Government deliberately allowed them to be broken I think that was wrong.

    Lloyds TSB wa a prudent commercial company, apparently with none of the "attributes" of the other banks like NRock, B&B, HBOS or RBS. Of course Daniels and Blank's eyes must have lit up when they were told they could have a pot at HBOS - the key question we dont know, you or I, is what was said at that meeting with Blank and Brown and what reassurances were given if any. There must have been subsequent meetings with the Treasury - I know how they work on these things. Also there must have been at least a nod towards the FSA and Neilly for something so clearly anti-competition as this to get through untested.

    Am I not right in thinking that Lloyds had made a similar suggestion for HBOS several years ago and was rejected out of hand, and also tried to take over Northern Rock but that was rejected too. You will correct me if I am wrong on those. It seems to me that this deal allowed a bid which gave LLoyds over 30% of the mortgage and savings business in the UK. Now all the regulators are out of the woodwork trying to apply sanctions - sell Halifax, reduce the number of branches, increase lending to 2008 levels, increase Tier 1 capital ratios.

    If you are working in Lloyds as I think you said you are you will be as appalled as I am at how little due diligence must have been done. Surely that is a bedrock of our business arrangements - it was a commitment on the management of Lloyds to safeguard its shareholders' interests in this respect. They failed lamentably, or had the wool pulled over their eyes. They bought a pup on shareholder's behalf, and in doing so they failed in their fiduciary duties.

    If the whole basis of the bid was to save the banking system, and Lloyds TSB shareholders, who were asked to put their money in after the bid at 1.73p per share and then 38p per share, were not told that then they have been misled by the Government, the Board and all the people who knew the facts about the bid and said nothing. Did Daniels and Blank know, when they were floating the first rights issue in January this year, that they were shortly to announce billions of write offs on HBOS losses?

    The whole thing stinks to high heaven, and yet all the main participants (save Sir Victor) are still in their jobs.

  • Comment number 63.

    38. Johnnie_London

    Keep it up! I love the gags!
    That's what we like to see in the midst of this dark recession, the good-ol' british sense of humour bubbling to the surface.

  • Comment number 64.

    Oh dear - sorry to once again cast doubt on the people living it up in cloud cuckoo land but whilst the British public may be trusting of their Government (this one or next) - your Government certainly doesn't trust you.

    Here is a little story hanging around the BBC's back door - it seems innocent enough - training the army to deal with civilian unrest in Afghanistan.
    Until you realise that the handling of civil unrest is a job for the local Afghan police (or army) and not a job for the British army who are far too busy handling armed insurgents (Taliban / Al Quaeda). I am certain the British Army do not plan to get involved in foreign civil matters.

    So what do you think they are really training for? I've seen similar footage of US troops undertaking the same training - 'civilian control training' they call it.

  • Comment number 65.

    #57 rbs_temp

    Good to see someone accenting the positive on writingsonthewall's personal blog!

    Moraymint - commiserations, been there 20 years ago, but I have every faith that your entrepreneurial spirit will win through and you'll be back.

    writingsonthewall, you need to get a grip mate. The "projected" repossession figure is still only a fraction of 1% of all the mortgages held nationally. The vast majority of people are still making their now substantially reduced payments month-on-month and are using the balance to pay down expensive credit card debt - or buying new cars, judging by this month's figures.

    Interesting that Questiontime featured a former Housing Minister (Cooper) and her nit wit Lib-Dem shadow and no mention was made of why we still have the lowest house building rate in 80 years. Reference to RTPI planning portal shows that the Conservatives are recommending villages nationally expand by 10% - that'll upset their middle England NIMBY core voters!!

  • Comment number 66.

    Johnnie London

    I dont think Mrs Thatcher failed as leader of the Conservative party. Some of the men in her various cabinets were horrified at the thought of being led by a woman and spent their whole time either being disloyal to her or feigning support. She had an inner core of people she trusted and who liked and who got on with her, like Joseph, Whitelaw, Parkinson and Tebbett. On the other side she had the Michael Heseltines and the Geoffrey Howes - the former introduced the most ludicrous management system into DOE and MOD called Minis (Management Information System for Ministers). It made what Labour are doing look like respectable endeavours (well, perhaps not, but it was pretty awful).

    If she had any skill at all it was to manage to blend together a cabinet of huge egos and still run the country, rather like Atlee did in the 40s.

  • Comment number 67.

    65. At 4:28pm on 09 Oct 2009, houseflogger wrote:

    "writingsonthewall, you need to get a grip mate. The "projected" repossession figure is still only a fraction of 1% of all the mortgages held nationally. The vast majority of people are still making their now substantially reduced payments month-on-month and are using the balance to pay down expensive credit card debt - or buying new cars, judging by this month's figures."

    You're missing a big factor in your analysis - we're only 12 months into this crisis - or did you think all the reposessions happen on day 1?

    I'd also like to know how you know about this 'vast majority' who are on low rates and paying back debt. I am on a BoE + 0.5 but I didn't have any debts to start with. That's because the demographic of prudence means the people who are good with money had no debts (or very few) to start with.
    When 'Super Cameron' arrives with his public spending cuts - will the resultant unemployment boost or demolish the number of repossessions?

    I think you need to stop kidding yourself and realise how bad it really is - or are you like rbs_temp - "I'm alright jack so where is the problem"?

    P.s. increased car sales is because the Government are subsidising every new car purchase to the tune of £2000 - or did you think it was a sign of recovery?

  • Comment number 68.

    # 67

    I would tend to argue that repossessions have been far too low given the number of mortgages taken out at speculative levels.
    When there is a supposed "credit crunch" surely supply and demand dictates that interest rates should not be at such a low level, but then BoE base rate is only applicable in certain areas, unfortunately not the productive area i.e. loans to businesses.

    The revulsion at the thought of repossessions is part of why the downside risk gambling on house prices does not match the potential gains and is another factor in the bubble.
    The home ownership mantra has been taken too far, aided by a failure to construct social housing (which should currently be doable relatively cheaply given the amount of redundancies in the construction industry), home ownership is not a right.
    [And in many cases the emphasis was more property than home, the notion of treating homes as a speculative asset is somewhat distasteful].

    As to cuts resulting in unemployment and increased repossessions... why should others pay for someone to do something that doesn't add value to buy them a house?

  • Comment number 69.

    To 25 fedupbankuser and everyone who is frustrated with the existing big banks....

    Change to the Co-Op Bank or Nationwide for the moment if it's possible for you.

    Neither of these institutions have shareholders to pay dividends to, and seem to be offering much better deals to both borrowers and lenders.

    One other outfit that, while very small at the moment, holds out a glimmer of hope for the future is "Zopa" at

    This model works on so many fronts:
    - the level of transparency is fantastic
    - borrower and lender are connected practically directly i.e. this is the disintermediation that we desperately need in order to provide both parties with better value and reduce the ridiculous spreads that bankers are taking at the moment.
    - the lender can choose to some extent the levels of risk he/she is willing to embrace
    - no casino banker can get his hands on your money and use it to go gambling for his own entirely personal benefit

    One imagines this concept could be scaled up massively, covering all sorts of other types of loans too, and indeed that other websites could start up along similar lines.

    Perhaps then finally, the ordinary people of the UK will have access to a decent value for money debt exchange system.

    PS I have no financial interest in this organisation and no money borrowed/lent through it - but I sure am looking at the latter.

  • Comment number 70.

    # 65 houseflogger

    "Moraymint - commiserations, been there 20 years ago, but I have every faith that your entrepreneurial spirit will win through and you'll be back ..."

    Thanks to you and the other posters picking up on my earlier comments; your interest and support is appreciated.

    You're damned right my entrepreneurial spirit will win through! The Bank of Scotland can go to hell.

    Of course, neither our political elite nor the banking mafia would know entrepreneurial spirit if it trundled over them in a steam roller. Regrettably, it's people like me, chasing business, working every hour God sends, sacrificing holidays and getting grief from the wife and kids for never being around, earning profits and paying corporate taxes that keep the politicians' expenses and bankers' bonuses flowing.

    If only Gordon Brown and his pathetic Marxist acolytes had the faintest idea of the degree to which they've screwed this country over the past decade.

    I'm thinking of some words from a Dougie MacLean song, "You can fall over, but you mustn't lie down ...". I have absolutely no intention of lying down. This travesty of a Government can go join in hell their banking pals at Lloyds; rest assured, I'll get my own back in due course.

  • Comment number 71.


    Base rate + 0.5% is a cracking rate, especially in the current climate, so congrats all around. Presumably you were on the same rate 18 months ago when base was 5%. What are you doing with all the spare cash, or do I spy a new motor on the driveway?!

    Stay positive and have a good weekend.

  • Comment number 72.

    47 rbs_temp

    Which world are you living in? I can't beleive that the penny hasn't dropped yet. You might be "alright jack" but many others are slowly sinking.I manage a charity, which amongst other things house homeless families. I can tell you from the coal face that things are starting to get a lot worse.

    I also have family members recently laid off or made redundant, my young nephew is possibly about to loose his house too, he may have to go bankrupt to escape the debt he will be left with even if his house sells, and he saved for a good deposit. Still as long as things are ok in rbs_temps world then everything is fine....

    WOTW's spot on in my opinion. I've been stocking up on coal and tinned food for a while now....

  • Comment number 73.

    Can't we just receive those £160m as Lloyds ordinary shares? Lloydscan probably manage £160m much more carefully and productively than the government. Well, except for wasting money buying HBOS.

    All UK's security services (MI5, MI6, etc) should have get together and have a unprecedented, relentless investigations and pursuits on how much of HBOS "£260bn of poor quality loans and investments" are frauds and swindles. £260bn recovered can go a very long way to pay off our national debt.

  • Comment number 74.

    #59. writingsonthewall wrote:

    "Well you might think I'm gleefully predicting social and economic meltdown - but there's no glee here I can assure you. I don't relish the thought of power cuts, no post, no bins being colected and civil unrest anymore than the next person."

    Oh, but you are quite gleeful. You post links to every negative story without comment, while simultaneously questioning the veracity of every report that suggests that the economic picture is a mixed one.

    "Don't forget - a few weeks ago you didn't think there was a recession at all, because you weren't personally experiencing one. However once a tirade of people on this blog corrected you I thought you realised that you can't rely on your own personal situation as an indicator of the wider picture."

    If the only reply you have to my post is to distort the truth then I'm afraid you've lost the argument, my friend.

  • Comment number 75.

    Now for a change of subject.
    For some time I've been considering the inflation/deflation debate.

  • Comment number 76.

    #52. mdcass

    Eric Daniels - Get out of jail free card.

  • Comment number 77.

    Let me just pose a couple of thoughts.
    Various posters have queried why bank base rates haven't been increased? Could it be that many people have annual reviews of their mortgages and that some of the biggest mortgage lenders adjust payments in September?
    We can't have people's mortgage payments going up before the next election can we?
    Some people have queried why we haven't been inundated with lots of repossessions. Considering that bank base rate is at a 200 year low and will likely remain there or there abouts until after the election this is hardly surprising.
    Just wait until they start to rise and then see how many hand back their keys or default?

  • Comment number 78.

    #64. writingsonthewall

    Thatcher trained the Orgreave police on the hippy convoy in savernake forest two years before the miners strike, the current state obviously doesn't trust the police to carry out the orders anymore (afghan riot training my hairy...)

  • Comment number 79.

    Moraymint, if there is value (transparent) in your business then think more local, current employees, credit unions, sod it, all out internet appeal, if the business has legs then someone will recognise your determination to run with it.
    It is better to try and fail than never to try at all.

  • Comment number 80.

    Before Northern Rock went over public ownership in 2008, Sir Richard Brandson hoped to buy the Northern Rock, although the offered price of £1 per share had not been accepted by the government.

    Now Lloyds Bank Group still has £16bn waiting to be credited to businesses and households.

    There is an article titled “Virgin Boss Reflects on Financial Crisis” by clicking on the links of At its last paragraph, it says: “Sir Richard said Virgin Money would also launch banking products over the next 12 to 24 months including deposits, personal loans, home loans and credit cards.”

    I wish that Virgin boss would like to buy a local business of Lloyds Bank Group, which can facilitate it with mature and good famed financial products and services. And Lloyds Bank Group can be discharged of some debts inherited from reckless loans by HBOS.

  • Comment number 81.

    I work locally, try to reinvest locally wherever I can......I'm hoping that this culture and straegey wil pull us through the hard times ahead.

  • Comment number 82.

    David Cameron was nervous when he took the stage at the conference, not because he was facing a huge audience, but because he was wondering whether he really had the bottle.

    He knows what is coming, what choices he will really have to make.

    This is not about economics, it is about people and their relationship with the state.

    We are not economic units, we are human beings.

    David, are you with us or against us.

  • Comment number 83.

    Bob He may be nervous but he will be thinking about a straight fight between himself and Gordon Brown come next Spring. Forget all the others - we have a truly Presidential system where 75% of the population dont even know the name of their own MP (unless they have been sleazy). Thatcher versus Foot, Blair versus Major, Howard versus Blair - I bet few could name the Foreign Secretary at each of those elections.

    He is thinking if I cant beat Gordon Brown after what has hapopened then I really must pack up. Is shoe-in hyphenated?

  • Comment number 84.

    Good on you moraymint.... If your anywhere near Leeds, I'd like to buy your products/services. You sound like a decent honest hard working person... I 'd like to do business with someone like you

  • Comment number 85.


    He probably wants to buy British Airways for a quid too. He's a real chancer. But when I worked in London in the 70s I went into his first shop in town (I think it was either in Charing Cross Road, Tottenham Court Road or Oxford Street). There was just an opening in the wall and boxes piled with vinyl LPs, mostly by people like the Sex Pistols. I thought what a joke and as a 40 year old I ought to leave when I heard their version of God Save the Queen. I knew as much then as I do now.

  • Comment number 86.

    83. majorroadaheadagain2

    That Brown will lose the next election, barr major hiccups, is a given. Then why so nervous, this should have been his triumphal conference speech (whoa, look at my wad, see you broonie)

    It wasn't.

    Cameron knows what is coming, I question his bottle and his loyalties

  • Comment number 87.

    In 1989, Erich Honecker made the decision not to fire on his own people and thereby sealed his own fate.

    David Cameron, have you got this kind of bottle ?

    Sadly for all of us, I think not.

  • Comment number 88.

    Inflation is upon us.
    Average house prices have risen for 3 months despite being 6-7 x average income. QE has led to shares inflating 50% in 6 months on nothing but sackings and factory closures. The post office workers are striking despite their cause being over a year away and negotiations ongoing. Railway staff are heading this way too. Infrastructure vital to our economy is not being built.

    Yet QE and low interest rates continue.

    So the real question is, will this inflation go hyper.

    For hyper inflation to emerge 3 conditions are required.
    1/ A govt printing money to meet it's everyday expenses and unable to finance itself otherwise for the foreseeable future. (tick)
    2/ A lack of social mobility. (tick)
    3/ A narrative attributing the cause of an economic disaster for the majority population to the corrupt enrichment of a national elite, dominates popular economic and political analysis. (tick)

    they can be summarised as, the govt is broke, I can't help my kids, the rich have stolen all our money. The result is, I'm getting some back, STRIKE.

  • Comment number 89.

    # 88.


    It can be argued that our period of low inflation hasn't been as low as is claimed, its merely the chosen measure that has been low.
    There has been inflation (and recently deflation) but this has been locked into speculative markets, especially the property one.

    When you look at in those terms, wage increases for the majority in recent years may well not have matched these increased costs of living, meaning increased personal debt (often on the basis of inflated asset prices) was needed to increase or indeed maintain living standards.
    Even measures including housing costs only reflect the cost of servicing the finance, which have been kept low in relation to the cost of the underlying asset.

    And some were naive enough to call it an "economic miracle", it was just the big lie and some people still buy into it and trust the perpetrators.

  • Comment number 90.

    # 77.


    Living up to your ID...

    Low interest rates (for some) are indeed being used to keep some people sweet in the hope of a few more votes.

    I can see less base rate tracker mortgages being offered as replacements when existing deals come to an end; but then the banks do owe the government for services rendered and no doubt avoiding impacts of failed property gambles helps to avoid more constrictive rules on future behaviour.

  • Comment number 91.

    #86, BobRocket wrote:
    "83. majorroadaheadagain2
    That Brown will lose the next election, barr major hiccups, is a given. Then why so nervous, this should have been his triumphal conference speech (whoa, look at my wad, see you broonie)
    It wasn't.
    Cameron knows what is coming, I question his bottle and his loyalties"


    It's funny really. Brown helped get the UK into this mess and in a way I'd like to see him try to dig us out before having him exiled. Then, again, I don't trust his economic judgement.

    I've no doubt Cameron is nervous. He knows - like everybody from all the parties - that belts are going to be savagely tightened over the next few years. It's not just about digging the UK out of a hole (as verious governments have had to tackle before), but doing it in a global context of unprecedented severity.

    Tell you what worries me. While all this money (our money) has been poured into banks, I can't remember the last power station to come on line. Not counting the highly subsidised and intermittently productive windmills...

    For goodness sake, we don't even have an adequate gas storage capability in the UK. (OK, I know that gas supplies will run down, but the UK has far, far less storage to buffer it against a sudden supply rupture than France or Germany.)

    What has happened for the last decade? What new energy plants have been developed? You can argue about the "value" of banks. But losing power supplies is a real difficulty. I wouldn't bet against it.

    It's one thing to work towards a brighter future. Quite another to face having to do it in the dark, when the lights start going out.

  • Comment number 92.


    puzzling wrote:

    "Can't we just receive those £160m as Lloyds ordinary shares? Lloydscan probably manage £160m much more carefully and productively than the government. Well, except for wasting money buying HBOS."

    Perhaps we should already have a lot more shares... after all without government support or the prospect of government support it was pretty much worthless.
    Of course investment in the stock market isn't really the place of government and does create all kinds of ethical issues where policy may well be influenced by protecting investments and against other interests.

    "All UK's security services (MI5, MI6, etc) should have get together and have a unprecedented, relentless investigations and pursuits on how much of HBOS "£260bn of poor quality loans and investments" are frauds and swindles. £260bn recovered can go a very long way to pay off our national debt."

    This assumes all £260bn is frauds and swindles and that its recoverable, neither are likely to be the case.
    In many cases its a case of pushing more and more loans at people who can't afford them, then of course bundling lots of these together and selling them as risk free assets.

  • Comment number 93.

    #70. moraymint:

    Great attitude, hang in there, if the underlying business is sound here's hoping the fighting spirit helps you pull it through.
    The determination and commitment alone should be worth something to a potential lender.

  • Comment number 94.

    I just don't get the whole LloydsTSB / HBoS deal.

    I gather that Lloyds had looked at a couple of prospective targets before all the crunch stuff came up (Northern "Rock" and even HBoS), but either finabials weren't right or competition issues cropped up.

    How is it that the government can simply set aside competition laws/ rules in order to avoid nationalising a failing institution? Was it legal?

    Lloyds had been a pretty "conservative" operator. It probably had some bad stuff on the books, but then again could probably have dealt with it.

    So how come a couple of cosy politico-business chats and a complete lack of due diligence was allowed to bring a respected institution into disrepute? Stuffing up the Lloyds shareholders (including private pension funds) along the way.

    Stinks. Stinks even more when rabid Labour supporters talk about the close links between Tories and bankers. It's not just a mote in the eye, or even a plank. It's a tree.

    How come we have no Serious Fraud Office enquiry into RBS looking for a major rights issue when somebody, somewhere within that group must have known they were not just "having a few minor difficulties" but going down the pan? (If the directors didn't know what was happening, they should at least be debarred from directorships until they were re-trained to understand the companies they oversaw. Did that happen to RBS, Northern Rock or HBoS directors?)

    Politicians are just people we allow to "represent" us for a while. They should never be allowed to set aside the normal operation of UK rules (such as competition considerations) to get themselves off the hook.

  • Comment number 95.

    My view was that the government had to make a call in a short space of time and LTSB were the only option. They still could have turned their back as the Bank of America and Barclays did with Lehman Brothers. Agreed, I would question the amount of due diligence done, abeit under strict time constrainsts. Between September and year end the value of a number of repossessed properties also nosed-dived significantly making the HBOS impaired debt much bigger as well
    I am not entirely happy with the situation myself with the millions and time (under less resource I may add) we are now spending on integration to marry the two banks would make me question the value of breaking them up again. I am now more concerned with the tax payer being paid off a soon as possible. The share value will not increase significantly until this happens.
    LBG are putting in measures to make this happen and the policy response to the recession entails buying bonds. This means not just QE, but also the requirement that banks hold more liquid assets.
    Ironically the same factors that caused recession gives the means to finance it cheaply. Of course, things could change; I wouldn’t be surprised if yields do rise in coming years.
    But the fact is that, for now at least, bond markets are telling us that there's no urgent need for big, quick spending cuts but wise investments

  • Comment number 96.

    Just want to bring the conversation back to its starting point. What Robert and other commentators seem to miss is that as a country we are effectively having to borrow to cover for this capital 'hole' so it is not a fee but merely the cost of borrowing passed on - so this is not some kind of earnings we magic up as it is implied.

    So take the current £16 billion - one would be expecting to pay at least 2% plus any risk premium at national level. So I think that the starting point quoted shall we say is at the low end.

    I've been interested to observe when others are talking about making a profit from the nationalised banks that its been conveniently overlooked at the actual cost of providing the capital in the first place from the markets (which in this case is borrowing by the Government since we long ago ran out of surplus cash) and which is far more than the £16 billion being talked about here. The bill is accumulating (over 2 years now).

    Ask any entrepreneur who could borrow to inject capital into his/her business but he/she would have to pay an interest charge (and some) for that. The principle is the same in all cases.

    The problem is that this interest charge is due to rise as we find national financing harder to come by in terms of our increasing national debt which is what the Conservatives and others are worried about.

    There's no such thing as a financial free lunch (other than a few specific cases of arbitrage) and that goes for quantitative easing as well...........

  • Comment number 97.

    And as an addendum.

    Just for everybody's attention. The Government HASN'T used any CURRENT taxpayer's money to bail out NR, RBS, LTSB/HBOS etc.

    It has used FUTURE taxpayer's money by borrowing it. That is why it is dangerous for the country.

    How dangerous?

    Well if you are mortgaged up to the hilt right now and your next-door neighbour comes to you for help to avoid being evicted by asking you to borrowing more money to pay off their mortgage - would you (if somebody would lend you the money of course)?

    Mmmm.......I think most would see this as an extremely dangerous proposition - fundamentally there's no real difference in principle to the scenarios presented.....apart from the fact that we weren't asked.........

  • Comment number 98.

    Those sensible lenders in the industry walked away from the cheap and racy reals HBOS (amongst others) were doing over the last few years and this was a disaster waiting to happen. Basel 2 and the effect on bank capital came at a bad time and it's been inevitable that casualties would result.

    Bail outs and guarantees are all well and good, but the Government is missing the big picture. Businesses are not confident about the future, they are waiting for tangible evidence that UK plc is moving forward and then I expect they will cautiously re-enter the market and start to fund expansion on the back of debt. Telling banks to lend more is ridiculous strategy that every sensible lending manager in the country knows isn't going to work. Who are we going to lend it to if the level of trade has dropped, reducing profit and cash availability resulting in reduced affordability ? Gearing up companies in uncertain times is a recipe for recklessness that got some banks here in the first place.

    Creating the climate where business wants to borrow is the key and so far the government have failed miserably to deliver. I'm a lending Manager and have been for over 25 years, the issue is not that I can't find companies to lend money to, the issue is that they don't want to borrow at the moment.

  • Comment number 99.


    I've been interested to observe when others are talking about making a profit from the nationalised banks that its been conveniently overlooked at the actual cost of providing the capital in the first place from the markets (which in this case is borrowing by the Government since we long ago ran out of surplus cash) and which is far more than the £16 billion being talked about here. The bill is accumulating (over 2 years now).

    SPOT ON!

    We can only make a profit if we're charging more to Lloyds for borrowing than we're pating to borrow (in Gilts). The only other source of pofit is appreciation (share price rising). If we're not then as the biggest purchasers of Gilts are the financial giants then we're effecively running a money pump into the financial system!

    Can someone clarify what these rates are?

  • Comment number 100.

    Despite a lot of grand claims from our leader, “saving the world”, “we will make sure it will never happen again”, all that happened is that present and future tax payers became poorer. Brown roars like a Lion but doesn’t bite, and now it is too late to make the necessary changes to prevent a future repetition of the last 10 years.
    The banks are in a strong position to resist any unwelcome change; it is politically impossible for Brown to change his strategy and if threatened with even the possibility of a small crisis will need to fall back in line. He is now the bank’s puppet. They quite naturally will use this position to enrich their shareholders and impoverish the state stake holders.
    Saving the banks is not saving the world; it is now impossible to force through the changes that should have been demanded and implemented 12 months ago.
    The next election may empower a new government, we know that Osborne will bring regulation responsibility back to BoE, however there is now less noise concerning splitting investment banking and increasing competition. Hopefully this is just Osborne wanting to avoid a war with the bankers prior to the election.


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