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THE GOVERNMENT'S announcement that it will use Northern Rock to become a model of liberal lending to homebuyers is problematic. It is to provide the nationalised Rock with £14 billion over two years to provide mortgages of up to 90 per cent, funded and guaranteed by the taxpayer. In this way, ministers hope to free up loans for the housing market.
Yet until now, the bank had been under orders to refuse any new business and to discourage re-applicants for mortgages; this change of direction does not suggest a coherent approach. Only this weekend, the Prime Minister called on banks to recover their old, more prudent lending habits. Now Northern Rock will once again add to the debt mountain.
Mr Brown's aim is similar with his impending move to guarantee banks' bad debts by up to £500 billion to encourage them to liberalise lending to the housing and business markets. This falls short of outright nationalisation or the establishment of a bank specifically to house toxic debt but it fulfils the same purpose: to free up the flow of credit. It addresses the root cause of the problem, but at the cost of increasing still further taxpayers' already vast liabilities for the banks' bad debts.
Few people would dispute the wisdom of Mr Brown's view that banks should be "stewards of people's money not speculators with people's money" - but they may feel it is a bit rich coming from him. Mr Brown was for more than a decade the leading champion in government of the "light-touch" regulation that we now see to have failed so catastrophically. Many people will instinctively agree with the savage criticisms today from Sir Ken MacDonald, the former Director of Public Prosecutions. He contrasts the swingeing penalties in our justice system for ordinary criminals with the apparent impunity enjoyed by those who commit financial fraud or impropriety. He calls for a new regulatory and law enforcement authority to replace the "failed Financial Services Authority and the embattled Serious Fraud Office".
Sir Ken has a point. His analysis is in any case a devastating critique of the regulatory policies of Mr Brown. The PM urgently needs to square his past role in creating the credit bubble with his present re-conversion to the cause of prudence.
High-rise Boris
BORIS Johnson's policy of restricting approval for tall buildings in London to limited areas was once a fundamental element of his approach to planning. But his approval for tall buildings in Wandsworth and Ealing, areas without existing clusters of blocks, suggests an approach more like the ad-hoc policy of his predecessor, Ken Livingstone, who took a notoriously lax attitude to skyscrapers. Now Mr Johnson has a chance to show whether his planning policy for our skyline has rigour or consistency.
A new proposal for The Spires, three enormous tower blocks right by City Hall, is being submitted for approval. It would be hard to justify. The tallest of the three would reportedly offer views of the English Channel; together they would interfere with the Mayor's own views. In a downturn, there is little economic rationale for projects like this; aesthetically, there is even less. Mr Johnson should say no.
Oscar gold
ITS success had been much heralded, but nevertheless Slumdog Millionaire's sweep of the Oscars marks Britain's greatest night at the awards in more than a decade. Not only did the Bombay-based drama take best picture award and Danny Boyle win best director, along with six other Oscars; Kate Winslet finally won best actress for her role in The Reader. All these awards were richly deserved - and proof that whatever the economic gloom, Britain still punches far above its weight when it comes to creativity.
Reader views (4)
Why would I be joking, Thomas?
- Will Fox, London, 23/02/2009 19:27
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Will Fox. Can I just say - you must be absolutely joking.
- Thomas, London, 23/02/2009 16:07
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Brown claimed he was the steward of our money, then did a runner.
- Albert Hall, hove england, 23/02/2009 14:07
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Thanks to Livingstone's "lax attitude" to skyscrapers, we have the much-loved and world famous Gherkin. We also have the stunning Shard of Glass at London Bridge to look forward to - along with a number of other sleek, high quality, futuristic towers that will greatly enhance the capital's skyline for the 21st century.
As an architecture enthusiast who has studied the planned towers in great detail, I can tell you that virtually none of them will obstruct or interfere with views of St Paul's, Westminster etc. - despite what the Evening Standard and other NIMBYs keep insisting ad infinitum.
And in any case, London isn't just about history and heritage - it's also a modern, dynamic and constantly evolving place at the cutting edge of architecture. Land space is also rather limited, so it makes sense to build up rather than out.
Instead of the constant bleeting and protesting against these developments (which bring enormous regeneration, jobs, and other benefits), people should learn to appreciate them for the role they play in our city.
- Will Fox, London, 23/02/2009 11:45
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