Betting has become the banks' core business
October 3, 2009 4:43 PM
Responding to Alistair Darling's statement on banking reform, Liberal Democrat Shadow Chancellor, Vince Cable said:
(check against delivery)
Mr Speaker, I would like to thank the Chancellor for the early warning of this statement.
Can he confirm that the taxpayer will be putting an extra £40bn into the banks? £7bn for Lloyds; £8bn for Northern Rock and £26bn for RBS, not including tax credits for bank losses; and is also taking on 90% of £270bn in toxic debt exposure via the Asset Protection Scheme for RBS?
In addition to this can he confirm that by changing the agreement over whether RBS can offset its losses against future profits for the purpose of corporation tax, the Treasury stands to lose between £9bn and £11bn in tax revenues?
Why are banks continuing to receive taxpayers' money and being allowed to pay bonuses when they are continuing to restrict credit on reasonable terms to numerous, solvent, small and medium sized businesses?
I was appalled to hear that Lloyds are not only being given more money but are seeking to extricate themselves from their lending agreement.
What exactly is the current status of lending agreements - and agreements on bonuses - with banks in receipt of Government money?
Why are they not being enforced?
The European Commission is forcing the banks to sell off bits, mainly of their retail operations, in the interests of competition.
That is surely right to protect personal and business customers from being ripped off. But the key issue here is timing.
Can we have confirmation that there is no urgency in adding the banks to the Government's car boot sale of assets and that the process can take four years, until market conditions are much improved?
And while it is good to have competition in the High Street, what is being done to curb the fat fees and associated bonuses in investment banking. Couldn't the Competition Commission be looking at that market?
Is it not also the case that this proposed exercise in splitting the banks doesn't deal with the central issue: which is the one highlighted by the Governor of the Bank of England in respect of banks that are too big to fail being too big.
If the Government want to split them up and is opting for regulatory reform, why aren't the banks which benefit, in the private sector, paying a fee for their taxpayer guarantee?
It is far more far reaching than deposit protection and enables them to operate large scale speculative trading - the casino operations - on the back of a taxpayer commitment to stand behind them.
Perhaps the sale of the bank branches should offer a betting shop as well, since the betting has become the banks' core business?
