Borrowers need a real rate cut

Today, David Hodgkinson, chief operating officer at HSBC, said there would be some "stickiness" in mortgage rates, notwithstanding anything the Bank of England does. Which raises the question — just what is the Government getting from its unprecedented bail-out of the banks?

If taxpayers are effectively rescuing two of the four remaining high street banks — the exceptions being Barclays and HSBC — they should at least be entitled to ask that mortgage payers and credit-card debtors will see the full benefit of a Bank of England rate cut.

If the Government cannot secure even that then the bail-out has been remarkably one-sided in its benefits.

The beneficiaries of the rescue package include, of course, Lloyds TSB and HBOS, which between them are recapitalising to the tune of £17 billion, with £4 billion coming directly from government and the remainder sought from investors, with the state taking up any slack.

The merger between the two of them now looks inevitable. But the news that Lloyds TSB will have to write off a further £10 billion in HBOS's bad debts cannot make the prospect of a merger any more attractive to Lloyds TSB shareholders.

The reality is that this deal benefits the Government rather than Lloyds TSB shareholders; there is no real alternative. The only option other than a takeover is for the nationalisation of HBOS, a deal which would far eclipse Northern Rock and which would create havoc for the nation's finances. In the new financial order it is probably the best deal available. But if banks fail to pass on a rate cut, it can only add to public resentment of the bail-outs.

Safer stations

MINISTERS' decision to force rail operators to increase night-time staffing at railway stations is a victory for commuters and for this newspaper's campaign for safer stations. The terms are set out as part of the new South Central franchise, for trains from Surrey, Hampshire and Sussex. Every train will be equipped with CCTV, and 40 more London stations than at present will be staffed until the last night-time service. This is all very positive, as are plans to install 1,500 secure cycle parking spots on the network.

Unfortunately, the provision made for the rise in passenger numbers is still not adequate. The franchise terms will force operators to run more and longer trains, especially at busy times and at night and weekends. But that will not be enough to keep up with the increase in passenger numbers: the National Audit Office predicts that overcrowding will get worse. Meanwhile, fares continue to rise annually faster than inflation some by three per cent more than the Retail Prices Index. At a time when the Government has just committed to a hugely ambitious new carbon emissions reduction target, it makes no sense to price people off the railways. With this franchise, ministers seem readier to demand a better service from operators but it still isn't coming cheap.

And celebrating...

LEWIS HAMILTON. The end of the Formula One world championship could hardly have been more dramatic: Hamilton overtaking Toyota's Timo Glock in the last bend of the last lap of the last race, the Brazilian Grand Prix. Mr Hamilton's youth makes his win remarkable at 23, he is the youngest ever world champion and his dignity, restraint and extraordinary capacity for hard work make him an inspirational role model for other young men. We hope this will be the first of many Formula One triumphs.