Another Day, Another Run

The photographs of people waiting outside the Halifax to withdraw their money says it all. For the second time a retail run is starting on a UK bank; the virtual run has been going on for days but now the queues are forming.

The announcements in the press of the 'saving' of HBOS by a Lloyds TSB take-over are both premature and too late. 'On Wednesday night' reports the FT, 'some investors in HBOS voiced concern at the speed of the deal. Richard Buxton, head of UK equities at Schroders, which has a 2 per cent stake in HBOS, said: “Why does this [deal] need to happen? The Bank of England’s Special Liquidity Scheme buys HBOS time. How does the deal benefit shareholders in HBOS and what if the short-sellers turn next on Lloyds and then to other banks?” (The Bank of England's Special Liquidity Scheme has been extended to the end of January so that even more toxic debt can be exchanged for government paper, presumably to facilitate this merger.)

Apart from shareholder resistance from small share-holders as well, the deal will bring tens of thousands of job losses, some 40,000 people are at risk of losing their jobs. The trade unions led by Unite are already flexing their muscle for the fight for no compulsory redundancies; workers must be paid enough to leave voluntarily. Who will pay for that? We all will.

We will all pay in lower savings rates, higher mortgage costs, inflationary rises in government spending, but we will all pay too in the flouting and over-riding of rules and laws set in place to prevent our exploitation by collusion between the financial sector and authoritarian government.

All the reports stress the key role played by Gordon Brown in enabling this deal. All experience underlines the key role played by Gordon Brown in causing this financial and social disaster in the first place.