Ben Brogan in today’s Daily Mail goes on precisely the right theme: translating these squillions into the real money – £16,000 per punter. The “that’s our money” anger picked up in the vox-pops around the country from members of the public has no echo in Parliament. This worries me – there’s something like £400 billion at stake here, and more scrutiny is required. It’s times like this I wish we had an American system, with a directly-elected prime minister, appointed Cabinet and separate legislature with its own mandate. America had plenty voices speaking up for its deeply suspicious taxpayers. In Britain, we don’t. I’m not saying I’m against the bailout. From what I’ve seen, I prefer it to the Paulson “liposuction on toxic waste” plan and, as the Daily Mail editorial argues, there was a case for doing it a year ago. But we have just written the biggest cheque in British peacetime history and we don’t know:
a) How it came to pass that banks were okay last week, but desperate now.
b) How and when the government intends to get the money back – does it have any forecast at all?
c) The precise terms thrashed out with the bankers in exchange for our money.
d) Whether this changes the terms of the HBOS-Lloyds competition commission pledge.
e) Details of the scenario we’ve paid so much to avoid – ie, would a liquidised bank really not have been bought/replaced by a stronger concern? Did the Treasury do research into this, or just take bankers’ scare stories at face value?
f) Whether UK taxpayers’ money will end up paying bonuses in Hong Kong or Wall St.
g) What the government’s forecast is for tax rises as a result of all this: it’s taxpayers’ money, we need some scenarios. Sure, best-case scenario is we make a profit – but when? 2015? 2020?
h) Will the new debt be on- or off- balance sheet?
i) Will the Icelandic mess cost the UK taxpayer even more than Northern Rock, as a financier friend of mine believes?
j) – oh I give up…
…There really are too many unanswered questions about all this. I’m wary of Peston’s “Armageddon avoided” verdict – wary that Armageddon was really on the cards, and that we can tell at this point if anything has really been avoided. I’m even more wary that the House of Commons will not be asking the hard questions that America’s legislature asked of Paulson. With £400 billion at stake, we’re entitled to answers. Or at least someone with clout asking the hard questions.
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