The government will spin that there is no bail out for this Building Society. Yet we learn in the smaller print that taxpayers are likely to end up owning the bad debts and the dodgy assets, or at least guaranteeing the deposits. So it’s not dun bailing – it’s more bailing.
I guess they have chosen to spin it this way for three reasons. One, they must know the rest of us are fed up with bailing out rich bankers and badly run institutions. Two, this one is in Mr Brown’s backyard, so they don’t want it to look cosy. Three, this one is a Building Society, a mutual. Labour has been telling us the mutuals are great, unlike the Societies that went to market.
So it’s not dun lying then. They’ve been wrong about mutuals as well. We now can see that they failed to regulate the cash and capital of Scottish Building Societies, mutuals close to home, just as much as they failed to regulate the cash and capital of demutualised companies.
Last night the BBC invited me to debate the G20 with Derek Draper. Like the rest of Labour he seemed unable to grasp the point that they should have regulated the risk of the mortgage banks, at a time when they introduced all sorts of new mortgage regulations which failed to stop a single dodgy mortgage. Mr Draper’s inability to understand this basic point, just as Ministers fail to grasp it, meant most of the interview was wrecked. You cannot have an intelligent conversation with these people, because all they want to do is to miss the point and bash the Tories.
I have always wanted tough regulation of the mortgage and other banks to make sure they have enough cash and capital for the loans they have advanced – pity they didn’t do. Their failure to do so is going to cost taxpayers a massive sum, as yet another Scottish financial institution struggles to the Treasury and seems to think it has a divine right to taxpayers money when it’s in trouble. If they had regulated these banks properly, as previous governemnts did, they would not be needing taxpayer support or taxpayer buy up of the toxic debts. Tougher regulation of cash and capital was what we were calling for well before the crisis hit.