Banks: where Obama leads we should follow

The stage has already been set for radical policies, with President Obama's proposals to prevent banks being too big to fail. For his part, David Cameron has said that the Obama measures "must be international". That way, no one country will be penalised by setting more rigorous standards. And among the measures being discussed at today's meeting is one of the Obama proposals, for banks to pay an insurance levy against the possibility of collapse. Gordon Brown has considered a transaction tax here for the same purpose.

But there are other measures which Britain and the wider financial community should be considering, following the US plans. One is to separate banks' investment banking operations from their humdrum retail business, as was the case here until 25 years ago, which would enable the taxpayer simply to underwrite the normal borrowing and saving activities of the high street banks which enable the economy to function, rather than their so-called casino operations.

That measure, which the Governor of the Bank of England supports and which the Tories back in principle, is commonsensical. It may make retail banking more boring as a career choice than it once was, but after the credit crunch, boring seems rather an attractive attribute.

Tube tussle

The latest judgment in Transport for London's dispute with Tube Lines is a severe blow to the Tube contractor. Tube Lines had argued that London Underground should pay £327 million in extra costs which it claimed were LU's fault. Tube Lines sought to place the blame for late-running work on the Northern and Jubilee lines — the source of some of the weekend closures now plaguing the capital — on LU. But an independent adjudicator has thrown out the claim "in its entirety", ordering Tube Lines to pay all the extra costs (as well as legal fees).

The judgment's real significance, though, is for the wrangle over costs for the next stage of Tube upgrade work. Tube Lines demanded £7.7 billion, later revised to £5.7 billion; TfL offered £4 billion. The independent arbiter of the public private partnership has said he thinks the correct price will be close to TfL's offer: he will rule definitively in March. But the latest judgment, on costs of first-stage upgrades, will damage Tube Lines' credibility. The adjudicating QC was damning: he said there was "an air of unreality" to Tube Lines' complaints.

London must have a modern Tube, and we should not be held to ransom by greedy contractors. But we should not forget that the real blame lies with the architect of the wasteful PPP scheme: Gordon Brown.

ID card anticlimax

After its less-than-memorable launch in Manchester and the North-West, where it had just 2,700 takers, the Government's ID card scheme is to become available from 8 February to young people in London. They will be able to use it for travel in Europe. Yet given that any future Tory government would be likely to scrap the scheme as an obvious economy measure, isn't £30 rather a lot to pay for a card which may become a mere historical curiosity?