Banks: Banking on the wrong kind of profit

Did you read any of the reports in the paper today about what the Government plans to do with all of the banks they bailed out? Well having, in effect, nationalised them, saving them from going bust, there is a cunning plan. UKIF (the organisation set up by the Government to manage the broken banks) will wait till the stock market goes up, then flog the shares at a great big profit. Real clever, isn't it? Just one little flaw in the plan. What happens if they don't go up? Duh !!!!! Of course they will, won't they. Well maybe you trust all of the fat cats who knackered them in the first place to sort the mess out. I don't. Gordon Brown hasn't flown a team of Martian financial experts in to do the job, apart from a few in the top layer, it's the same people who were there before.

The problems of the United Kingdom are not something that have just happened since Gordon Brown walked through the door. The decline of manufacturing has been going on ever since the 1950's under Tory and Labour. North West London used to be the worlds engineering powerhouse. Companies such as DeHavilland, Boosey and Hawkes and Van Den Plas were based locally. How many people do you know who actually make things today?

Why did they disappear? Ultimately because the banks preferred to lend money to companies which could turn in bigger, quicker profits. Property business exploded. Shops selling imports turned into massive chains. The little guy on the corner had a bad month? His overdraft was called in and he was off to the benefit office. If when Sir Fred Goodwin at RBS had his overdraft called in by the Government, he got a huge bung and a massive pension.

Reform the banks. Make them lend to the little guy. Make them moderate their profits and provide decent service. We, the taxpayer own them. We saved them. I've got RBS and Lloyds shares, but I'd much rather see a smaller more stable profit, than what we've had. The sad thing is that a bank dedicated to long term, income generating lending would transform the country. As it is, even a Labour Government purely sees the banks as a cash cow to be milked when the time is right.

I did wonder what the initials UKIF stand for. If we don't start lending to business, I suspect that it could well be "United Kingdom is F***ed"