Afternoon:
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Here's a curiosity: we still don't know how Bradford & Bingley came to be nationalised.
We've had details of the processes that affected Northern Rock and we have a good idea of what happened when Royal Bank of Scotland and HBOS were rescued. But of Bradford & Bingley there is nothing.
No information has been forthcoming from the Treasury about the steps which led to the former building society being taken over by the state in September 2008. We've not been told about potential bidders for the bank and the reasons they were not considered. Neither has it been explained why Bradford & Bingley was not made subject to the same financial support operation as the one devised for RBS and HBOS.
What makes you wonder is that David Blundell from the Bradford & Bingley Action Group has now written three times to the Government asking how their property came to be confiscated and has had no more than an acknowledgement that his letters have been received.
Meanwhile, Bradford & Bingley (the savings business was sold on to Santander) discloses a loss for last year of £196 million, blaming soaring bad debts and fraud. This, on top of a loss the year before of £278 million.
Now Blundell has written to Gordon Brown again. One of his arguments is that he suspects ministers believe the share register at the bank was populated by “fat cat” City types.
“This could not be further from the truth as in fact Bradford & Bingley had nearly one million shareholders, most of them small private investors.” Furthermore, he adds, the bank's employees, past and present, were significant shareholders via their SAYE schemes and using their bonuses to buy shares in their employer.
At the very least the Government's reaction to date has been tardy. At worst, it suggests an attempt to hide a wider scandal. What is certain is that it's far from satisfactory.
You can be sure of one thing: the Budget is anyone's guess
Until Wednesday afternoon we will not know for sure what is in the Chancellor's Budget.
It's worth pointing this out because we're being told with confidence what he will say. The truth is: very few people have any real idea. But what is clear from soundings in Whitehall is that there's a spring in Alistair Darling's step which certainly wasn't there a few months ago.
I realise it's hard to imagine the Chancellor as jaunty but that's the picture I've been receiving. He has certainly grown in self-confidence, buoyed by the Prime Minister's inability to dislodge him and from the response to his declaration that the “forces of hell” were unleashed against him when he dared to speak out of line. But there's more to his sunnier mood. Tax takes have been higher than expected and he can reduce his borrowing forecasts.
While Wednesday's message is going to be all about his safety-first strategy and how that is working (and why we would be daft to elect a new, untried chancellor who might not display the same caution and expertise), it's inconceivable there won't be one or two surprises. A measure being talked about in senior Labour circles is the 50p rate for high-earners — they recognise its announcement was not well handled and played straight into Tory hands.
While it only affects a minority it can be portrayed as damaging aspiration and enterprise. One thing that has been discussed is stressing the 50p rate is only temporary and was only ever intended as a stop gap while Britain was in the teeth of vicious recession. Now that recovery is on its way and revenues are rising, it could be abandoned. Labour's thinking has hardened in the light of dithering on the Tory side — it's not clear what George Osborne, the shadow chancellor, intends to do about the 50p rate. What's been suggested is that Labour has an opportunity to be seen to be reducing personal taxation and stealing the Tories' thunder.
While the 50p rate is an individual tax, the Government may also be minded to continue its pressure on the banks. There is a feeling among those around Gordon Brown and Darling that profiteering by banks has been blurred by attacks on the rich generally. Brown remains keen on a “Tobin tax” for bank transactions — it's seen as popular and a way of hitting the corporates without penalising their executives and running the risk of driving them away.
All will be revealed on Wednesday. Until then, don't believe anyone who claims certain knowledge.
