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The taxpayer bail-out of the banks continues apace, with the biggest cash injection by the state to date.
The scale of the Government's support even before this is so great that the enormous sums of money involved are difficult for most of us to grasp.
But today's announcement of nearly £40 billion of taxpayers' money in fresh funding for the Royal Bank of Scotland and Lloyds Banking Group, including £8 billion in contingency funding, merits real public debate.
Forty billion pounds is a huge sum: it could pay for more than 1,500 schools. Will some of it come from quantitative easing, in other words, printing new money?
We do not know, but tomorrow's meeting of the Bank of England's Monetary Policy Committee may shed light on the question.
Most of the funding - £25 billion excluding contingency funding - will go to the Royal Bank of Scotland.
Lloyds is having a rights issue to break away from the Treasury's toxic asset insurance scheme, and the Government will be buying nearly £6 billion worth of the new shares.
This is not money wasted - taxpayers can hope to see most of it back, eventually - but it is still a formidable call on the Treasury in hard times.
What all this does do is muddy the overall picture of an economy emerging from recession. If the banks are doing so well - with some merrily awarding themselves bonuses as in the old days - people may ask why they need so much new capital.
Certainly, it makes the Chancellor's predictions about the sector look optimistic.
At the same time, the EU Competition Commission has required the two banking groups to sell off some of their assets - Lloyds, for instance, will be disposing of the Cheltenham and Gloucester Group and branches in Scotland, and the RBS will sell two insurance operations.
This will have an impact on the high street, less so on the overall market in financial services.
What the Commission has done is to dismantle the groups' recovery plans, which had the Government's backing.
The Government must have known about the EU's competition rules; did it not factor these into its calculations?
Taxpayers can justifiably feel nervous about these developments.
If we had illusions that recovery in the financial sector is going according to a rational plan under Alistair Darling's control, they must be questioned now.
Grey Afghan dawn
The Prime Minister, in his interview with this paper today, declares that the confirmation of the election of Mohammed Karzai as president of Afghanistan will bring closer the time when British troops can return home because it will expedite the training of Afghanistan's own army.
We hope so. But Mr Brown is right to emphasise the importance of diminishing corruption, which disfigures the running of every aspect of the Afghan state, as well as the presidential election. Now, Mr Karzai has pledged to stamp out "this stigma from our soil" .
But corruption is not an act of God, outside his control.
Mr Karzai's own people and party are the origin of most of the corruption he condemns.
Western governments who are committing so many troops and so much aid to Afghanistan will judge him on his actions, not his words.
Books are best
The very possibility that the remaining antiquarian bookshops of Charing Cross Road could be threatened by their landlords, Soho Housing Association, changing their lets from long to short term should appal anyone who cherishes the literary associations of the road.
If they were replaced by chain shops it would diminish a great tradition.
Reader views (3)
Hmmm, now let me see. If I follow you the BoE will print an extra £40 billion so that it can buy government bonds from the banks, who will then use the £40 billion to recapitalise themselves? Oh yeah, and there are fairies at the bottom of Gordon Brown's garden. This is madness, and it will end in a broken currency and a bankrupt country.
- Steve Cox, Porthcawl, UK, 03/11/2009 13:35
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Hmm. Economy still in recession. Graduate unemployment at 15-year high. Pay freezes in the public sector... and massive bonuses continue for bankers.
What do we do? Give them more money.
Don't worry eveyone though - I'm pretty sure that this is a communal bad dream, and we'll all wake up soon.
- Liam, London, 03/11/2009 13:33
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No, the sums are not too difficult to grasp. Darling is giving the banks the equivalent of £1,300 from every taxpayer in the country.
That is £1,300 that very few of us have lying down the back of our sofas, unlike the Bank of England, which appears to have staggeringly large Chesterfields stuffed with used fivers and tenners.
Why not give the money directly to taxpayers as a tax cut next year? That way it will be spent, thus propping up retailers and allowing the revenue from VAT to flow back to the Treasury naturally to pay off debt. Some of it might even find its way into banks via savings.
As to bailing out banks: they can sing for it. It's time to let the laws of the jungle take effect and allow some of them to fold.
There are far more important infrastructure projects that could do with £40bn - railways, schools, hospitals, military equipment - than paying for city bonuses that will be pee'd up the wall of the nearest wine bar.
- Nobby Clark, Perth, the Scottish one, 03/11/2009 11:51
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