Barclays took the right path

The angry reaction to Barclays’ decision to recapitalise using Middle Eastern money rather than a taxpayer bailout mystifies me. In my News of the World column today, I argue that Barclays may well become 30% Arab but its 100% correct. It has no duty to accept a UK taxpayer bailout over more expensive Arab money, as is widely suggested. Its duty, in fact, lies is in the reverse. A taxpayer bailout is supposed to be the last resort, preventing the banking system from collapse.

I’m glad that John Varley, Barclays’ chief executive, realises that even if some politicians do not. As Guido notes, Vince Cable has disgraced himself in claiming Barclays should have gone with the taxpayer. The patriotism argument, that British taxpayer financing is preferable to Arab money, is also nonsense: who do you think the British government borrows from? Barclays has just cut out the middleman.