Thursday, 16 October 2008

You couldn't make it up

A model for 'this bank is now managed by Royal Bank of Scotland on behalf of the people?'

It now appears that the public spending watchdog, the Audit Commission, has placed millions of pounds in Icelandic bank accounts. The story has not been confirmed, but they have refused to deny it. Today's joke in the civil service is that they should send in a 'crack taskforce' to sort out the commission which was set up to promote 'value for money' for taxpayers.

Meanwhile, the taxpayers are losing their heads as well. Maybe it was meant as a joke, but a letter in The Times yesterday said, 'Now that the UK banking system is owned by the people, perhaps it can finally serve the people ... I want a return to traditional banking standards.' A friend of me who does charitable work trying to sort out the considerable problems caused by the tax system for the elderly, pointed out that H M Revenue and Customs is owned by the people.

Some of us can remember the notice boards put up outside National Coal Board pits after nationalisation declaring that the pit was now managed by the National Coal Board on behalf of the people. The history of nationalisation in the UK was not a happy one. It's a sobering thought that Sweden still has publicly owned banks 17 years after they were nationalised in the last recession.

The government share ownership is, of course, supposed to be temporary and perhaps the shares can eventually be disposed of at a profit. For the moment no one, particularly mutual funds focused on income, wants to hold bank shares because there will be no dividends (even Barclays which remains wholly private has said that it will not pay a dividend next time round).

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