Integrated Transport System

Back in 1997, John Prescott said that 'Britain would have an Integrated Transport System'. Of course, as with much of what Prescott said it was pure hot air. Sadly, nearly 12 years on, we are paying the price of those empty words and lack of action.

The CBI today says that our transport network is 'unreliable, congested and is undermining our competitiveness'. It echoes what most of us in business have felt for some time - the word they have missed off is 'expensive'. Remarkably, they rated train travel as satisfactory in terms of reliability and is considered to be improving. Clearly they have been using very different trains to most commuters.

Trains, Planes & Automobiles

Trains are a running joke in this country. While rolling stock is slowly being updated on the lucrative franchises handed out, the handling of rush hour remains appalling. If you commute into London then you will know what I am talking about. Fast trains at rush hour are the most expensive tickets on the network and you are subjected to densely packed carriages and no seat for the journey, made almost unbearable in Summer due to lack of ventilation. Nowadays, my wife and I will travel by car together as affording two tickets at such excessive cost each day is just ridiculous and with £9 for parking and £8 for congestion charge and around £10 for diesel it makes economic sense.

Of course, the answer that the Mayor and PM will have is to raise the price of the congestion charge or find some other tax to attempt to penalise you into taking the packed trains - or as Ken Livingston was planning, to actually charge a congestion charge for using the trains in rush hour. This stupid and illogical way of trying to manipulate behaviour comes from the long, historic belief of the Anglo-Saxon and Norman lineages that if you tax someone then they won't do it.

The idiot thing is that no one takes a rush hour train or car journey by choice. They do it because that's what business and working demands. Most people in this country have set hours of work and while flexi-hours are a great innovation, over 90% of businesses cannot afford such luxury for its employees simply because their customers demand service within normal business working hours and beyond. In order to be successful in business, you need to be delivering your products and services within working hours. And that means that any more costs heaped onto getting staff to work within those normal hours will just make the business less competitive.

The Burden of Transport

In my business, my biggest expense lines outside of payroll is travel. Taking out accommodation costs which I try to avoid if I can, a quick analysis reveals it is cheaper to use a car for internal travel in the UK than trains with the exception of the Underground in London. A cursory glance will tell you mile for mile it is cheaper to use planes than cars or trains. Yet a bus and a train has to be cheaper than a plane to buy, maintain and run, particularly with all the ancillary costs.

Most people commuting to their office cannot recharge that to their employer and so bear the cost themselves, so the hidden cost of transport in business is huge. This will eventually manifest itself in wages which need to remain competitive yet still provide enough to cover the employees' transport back and fore from work. If you look at the cost of specifically trains and buses over the last 11 years it is easy to see that their cost has risen well out of proportion with wage increases.

It is costing us more to work than ever before thanks to transport costs.

The State of The Union

Britain is not some backward nation on its uppers - well not yet anyway. In that last 11 years, we were told repeatedly that we had a super economy and we were well off as a nation. Of course that has proved to be complete rubbish but it does make you wonder why on earth we have not ploughed enough money into getting our transport system in line with the modern age. Ministers would tell you that it is because of lack of previous investment and it's a case of catch up. Well, that's no excuse to exacerbate the problem on their watch. Now we are talking mega-numbers, not quite in line with bank bail outs, naturally, in order to put it right.

And here is the rub. This has been a Government of missed opportunity which is a phrase I have used before. The real shame is that when a crisis came hundreds of billions of pounds were taken without a cursory thought as to how they would be used or spent by the people they gave it to just as a knee jerk reaction to the failing banking system. Heaven knows, if such money was available then, why were we not spending it on our future like transport infrastructure - and if it could have so easily have been conjured up, why did we not use it before?

Of course, tax is at the heart of the matter and we shall find out in years to come just how much it has cost to save the skins of a few bankers and keep a bunch of bank businesses many of which deserved to fail. What we will count the cost of at the same time is how much new infrastructure, new hospitals, schools and much more we could have spent our hard earned money on while we pay off the 'expense tabs' of the elite bankers, the very same people who now sit like vultures on the PM's shoulders telling him how much money he needs to spend to dig himself out of the mess he got us into.

You can be sure of one thing, not one of them will be telling him to hold back the cash for banks and spend it on transport or any other worthy cause. That does not pay a banker's wages or bonus - and that is the priority of this Government, make no mistake. This period of history will be the single biggest missed opportunity in Britain's economic history - and we will remain uncompetitive for years because of it.

Thorny Issues

Let's get something straight at the start - I thought at the time and still do that David Davies was an egotistical prat. His puerile display of self gratification when he resigned his seat and forced a farcical re-election campaign was a mighty waste of time and money and an abuse of an arguably daft political system. The only decent outcome is that he remains in the political wilderness.

However, if anything, it detracted us all from the thing he was supposedly trying to highlight - the erosion of civil liberty by the extension of the detention period of an unaccused individual to 42 days. I believe strongly in civil liberty and habeas corpus but when it comes to Terrorism it becomes a massive grey area and the security of the public is paramount. If it stood as a general point then I would have supported him.

'Known Knowns and Known Unknowns'

Rumsfeld's famous phrase is worth repeating. We live in a world which has changed dramatically since the day the world stopped on 9/11. I vividly recall the events unfolding before me in sheer aghast horror and relived them in the excellent film Flight 93. I recall equally being on a train into London when 7/7 occurred and worrying how my wife was in her office in Spitalfields unobtainable - then seeing the carnage that had been wrought not by foreign terrorists but from citizens of our own. The world had changed beyond all recognition.

So when the US response came in Afghanistan, I had no quibble. But when we jointly invaded Iraq and John Charles De Menezes was gunned down in cold blood on a train in London, I believed we had changed the world for the worse, not the terrorists. Blair always said that it was the terrorists who did it, they started it, but I do not for one minute believe that terrorism was on George W Bush's mind when he ordered the invasion of Iraq and I don't think that terrorists train or compel police to be incompetent.

Since these events we have constantly been held in a state of low level terror, drip-fed information designed to keep us on our toes and to agree with policy. We have let Guatanamo go by as a necessary method to treat indeterminate people on non-sovereign territory while Abu Ghraib was put down to over zealous individuals rather than a Supreme Command that basically said do what you want to these people - they are worthless. A lack of understanding of a complex situation has caused terrible loss of life in Afghanistan and Iraq and it came from the dreadful lack of planning and knowledge displayed by leaders like Bush, Blair, Brown and Rumsfeld.

When interviewed about a year ago, a US Marine in Iraq was asked by a reporter, 'Why are you here?' He replied with total honesty, 'Because of 9/11.' Yet Iraq and Saddam Hussein by Bush's own words had nothing to do with 9/11.

This has been the problem with the escalation of world tension. Even our own incompetent Intelligence Agencies who fell to Alistair Campbell's leadership and produced the piece of shocking fairy tale that was the basis of our decision to invade Iraq, have said that by invading Iraq we would cause more terrorism - because we have now given anyone with a gripe against the West a focal point to do so, a raison d'etre and a good career.

Why Should We Think Again?

I bring this very tough subject up on two counts. Firstly, and most importantly, amid all the lambasting about Government incompetence over its handling of the Financial Fiasco, the 145th British Soldier died yesterday in Afghanistan since 2001. He was from the First Batallion of Rifles and he died in Helmand Province. He followed Marine Darren Smith who died of his wounds on Saturday while being transferred to Camp Bastion.

While I query why our soldiers are being used this way, I think they are the best and bravest people on this earth. They are dying on our behalf and there is no greater sacrifice. Remember that today for the sake of the families of those two men and the 143 others who have died in Afghanistan alone.

It will put the rest of our troubles into perspective.

The second reason I bring this subject up is that Dame Stella Rimington, former Head of MI5, has spoken out against the West's policies. "The US has gone too far with Guantanamo and the tortures. MI5 does not do that," she said. "Furthermore it has achieved the opposite effect - there are more and more suicide terrorists finding a greater justification."

She has previously been critical of the government's policies, including its attempts to extend pre-charge detention for terror suspects to 42 days and the controversial plan to introduce ID cards. "It would be better that the government recognised that there are risks, rather than frightening people in order to be able to pass laws which restrict civil liberties, precisely one of the objects of terrorism - that we live in fear and under a police state," she said.

Her comments come ahead of the publication by the International Commission of Jurists which is chaired by Former Irish President Mary Robinson who said, "Seven years after 9/11 it is time to take stock and to repeal abusive laws and policies enacted in recent years. Human rights and international humanitarian law provide a strong and flexible framework to address terrorist threats."

The report contends that the US and UK undermine the framework of International Law. Personally I think they repeatedly break International Law in the name of Freedom and Democracy - the two virtues we wish to bring to the worlds they invade. Our example of what Freedom and Democracy is about is pretty questionable.

Amazing But True

They could be showcases in Mr. Ripley's amazing exhibitions but we have become immune to some of the amazing statistics we have been fed lately.

I nearly cried when I found that Andy Hornby, the lad next door former Marketing Manager at Asda who rose to become CEO of HBOS and made a good and proper show of ending the Bank's life by clocking up a £10bn loss, has waived his right to a monthly retainer. In a show of public-spiritedness which will no doubt twang the heart-strings of every warm blooded mammal he has voluntarily given up his right to a £60,000 month retainer at the bank. If the details of the £10bn loss had somehow slipped past the press, I dare say he would have carried on drawing the money reluctantly as reward for crashing what was a perfectly decent bank at some point.

Of course, I dare say he learnt the art of asking for pocket-ripping retainers from Ron Sandler, who got his 'Happy Gilmore' monthly pay out for 'rescuing' Northern Rock which we now own as taxpayers. We all happily agreed to his £90,000 per month retainer and the fact he has pulled in an army of consultants to whoop it up on the taxpayer bonanza to 'put the bank right' again and even showed his generosity on our behalf by paying staff a 10% bonus just for paying the back some of the money they borrowed - from us.

Easy Money

Even that does not take the biscuit. My perennial blog target, John Thain, former CEO at Merrill's who did an 'Oliver' and asked for more bonus himself having wrecked the bank so much it had to be bought by BoA - he only wanted $10m. But he had the last laugh as the stingy Board turned him down. At that point they were not aware he had signed $billions in executive bonuses to his pals just days before the takeover at BoA went through, and had somehow blown $1.2m on redecorating his office which he has now admitted was a 'mistake' and has agreed to pay back. What a guy.

But dear old Fred Goodwin now former CEO of RBS, has proven to be a generous sort as well. Despite his bank clocking up a £30bn loss and has laid off 13,000 staff so far, tears will well-up when everyone finds out that just a few weeks before he got so unfairly sacked for busting the bank, he signed off several lucrative contracts to individuals to become 'global ambassadors' to RBS. With contracts up to 5 years, these 'ambassadors' include Zara Phillips, Jack Nicklaus, Jackie Stewart and Sachin Tendulkar - and their job was to just stand about ambassadoring. RBS was always a bit choked that rival HSBC had bought space in all airport jetways and so it began on a global campaign to hijack every sporting event it could think of and now sponsors Williams Formula 1 Team, the Rugby Six Nations (Wales are Grand Slam holders), the Nat West series in cricket, the British Open in Golf and the World Underwater Nude Tiddlywinks Championship this year in Watford swimming baths - this latter one is still pending approval as I only sent the application off this morning.

We should mourn 'Sir Fred' for his overwhelming largess. But that wasn't as generous as his leaving terms as he earned £4.2m a year and although he was rather spitefully not given a wedge of cash for his failure, he did exit with an £8.4m pension pot.

Bank officials are now a little bit cheesed off that they cannot undo some of these daft deals but that would mean someone getting off their backside, employing a decent lawyer, calling up Sachin, Zara and her brother Peter who oversees the Williams F1 deal in Asia for RBS, and telling them to take a hike. But that would be impolite - besides it's only a collective £200m of taxpayer money at stake.

Let's not stop there. As Gordon Brown surrounds himself with fabulously rich banking advisers which is a really great idea as they advise us all to bail out banks and allow them to carry paying themselves fat bonuses, we are slowly finding out his who's who of the banking world are some of richest, dodgiest fat cats of them all. Latest on the list of dodgy dealers is the former US Citigroup banker who managed get himself a $42m pay off. A mere 45 years old, Michael Klein, former Vice Chairman of making money at Citigroup, quit last July just before the spectactulars really kicked in and Citigroup had to get $45bn to save itself and got his massive pay off. So he would be superbly qualified to advise Brown on how to rescue the banking system, then.

Allegedly, the scoop at the Treasury, is that Klein has to approve everything before it becomes policy. Klein, now a freelance 'adviser', is described as a 'rainmaker' in the banking world. He certainly made it rain - it bloody well poured, all $45bn of it.

Failure Is A Good Thing

Clocking up $45bn and getting a $42m pay off is pretty spectacular even for a rainmaker. We see in business and sport that in fact it is far more lucrative to fail than succeed. In fact the more spectacularly and quickly you fail, the quicker you earn the value of your contract and resurface at a new job to start the jamboree all over again. Just ask Sven Goran Eriksson or Steve McLaren - there was zero incentive to succeed when you could earn as much in quicker time by failing. And the same goes for 'Big Phil' Scolari at Chelsea, who this week got fired from his wonder-job. Along with Jose Mourinho and Avram Grant, Chelsea have paid out a total of £28m to be rid of their failed managers (although in fairness Mourinho did win 6 trophies and Grant lost the European Champions League only on penalties).

You must think that Chelsea must have a small chimpanzee who makes out such stupid contracts. No way, it is the highly paid CEO, Peter Kenyon. You have to have real brains to be that stupid, believe me.

Of course, you would have to be really stupid to employ clever people who actually gave a damn about silly things at Watchdogs. They have really bared their teeth lately over at the FSA and copped an Essex Forex trader who allegedly had a £44m fraud going. Good stuff, they only missed the entire banking meltdown which has cost around £800bn so far in the process and the Madoff $50bn scam.

Good work everyone, bonuses and part time fat-cat jobs all round.

I Can Do That

The world would not seem right if we did not hear of a bit of management lunacy. We find this week that BT, that bastion of management common sense, is paying around 1,000 workers to do nothing.

These individuals are part of the Career Transition Centre and were set up to retrain employees to find work elsewhere in the business instead of BT resorting to redundancies. A noble thought, indeed.

Sadly, as the recession bit and lack of planning came to the fore, it meant that there are fewer posts to fill at struggling BT and last week it announced it has laid off around 9,500 workers. This has given rise to a large amount of employees who are languishing at home waiting for something to do. Cleverly, Ian Livingston, the CEO at BT, has focused his job cuts on consultants and contractors at BT - whole armies of them that sprang up to advise about how to outsource and ruin the business. The company has 90,000 UK employees and over 110,000 worldwide, some just sitting in small offices in foreign countries, advising. In fact, when you include contractors, BT had around 160,000 people working for it so the odd 1,000 sitting waiting to do something was neither here nor there.

You couldn't make it up.

Finally, Spare A Thought For....

Eric Daniels, CEO of the new Lloyds Banking Group who, with other banking alumni, was called up in front of the beaks this week. He described the takeover of HBOS as being expected to be painful but strategically good. Bong, a few days later we find £10bn went down the toilet and we, the taxpayer, stumped up for it - so yes that was indeed painful. Daniels should not have any excuse - the City did warn profusely that HBOS had been suicidal in its Corporate lending and many of their super bets have gone belly up including Stead & Simpson, Wyevale and Crest Nicholson.

Bless him - Daniels said that they would have normally have done a good deal more due diligence in such a takeover despite the obvious warning signs but frankly with a Government gun to his head he probably did not have much choice.

Now, on a final note about Andy Hornby, the former CEO at HBOS, who has given up his lucrative retainer, we will not have heard the last of him. After presiding over hiring and firing a £1m banker called Benny Higgins from RBS who had pleaded that HBOS should have a more conservative mortgage book so much so that HBOS sold only 8% of mortgages in the first 6 months of 2007, after Higgins had slashed the commission paid to brokers and advisers. Hornby fired him and soon spectacularly reversed that so that HBOS once again got to 22% of the mortgage market with some of the most daft lending and sales tactics you will find.

And he had the gall to ask for a £60,000 a month retainer - respect to the balls of the man. Now, who was the idiot who agreed to pay it? That's you, silly, the taxpayer. In fact we are stupid enough to unquestioningly pay for it all and will be doing so for some years to come.

The last laugh is on us.

Banking Shambles

I don't think it's appropriate to mention that Wales defeated England 23-15 in a terrific game at Cardiff yesterday. So I won't.

I will, however, point out that I have blogged before on the subject that the series of knee-jerk, guessing-game responses to this whole financial crisis by the Government has cost the British taxpayer far more money than it should have done and I firmly believe that we are open to a great deal more liability in the road ahead. Nobel Laureate, Joseph Stiglitz, has said, we should have let banks fail and started again, properly cleared of the full effects of the Credit Crunch to get a fresh start. I do not agree that we should let all banks fail but I do believe that some were not worth rescuing.

HBOS is now a classic example of how it should not have been done. Ken Clarke has called it a 'Shotgun Marriage' and points out it was a reasonably plodding, secure Lloyds TSB which was forced upon HBOS. And he is right - this was a union which the moment it was proposed, Lloyds TSB started to squirm and doubt. The price wasn't right, the risks were not assessed, the climate and timing looked bad - but what made it occur were three things:

1) The Government in the form of the PM himself forced the issue and stepped in at the eleventh hour to ensure that doubting executives were made clear on the consequences if this did not happen, 2) Anti Competition rules were personally waived by the PM in order to prevent the move being blocked on the grounds it created a single banking group with an unhealthy 28% share of the UK mortgage market and 3) The Government shored up Lloyds TSB's balance sheet to enable it to afford the takeover even though its finances were not strong enough to do so.

Now we know why these moves were stupid and ill-advised. Ministers tell us there were no other courses of action and that not a single depositor or mortgage holder was affected. The fact was they simply did not consider an alternative and moves by the Government subsequently made sure that mortgage holders and depositors were protected anyway. This was a merger that exposed taxpayers to potentially higher costs as we took a 43% stake in the new Lloyds Banking Group and then find £10bn of losses which has slapped Alistair Darling in the face and almost greyed his eyebrows.

Bewilderment

Every single day, Darling, Brown and Mandelson seemed to have this bewildered look on their faces as they stutter and stumble out their excuses as to why Britain is worse off than in 1997. They tell us that if they had not done anything then the world would have lurched into disaster and banks as we know it would have failed. Heavyweight personal lender, Geoffrey Robinson, has been wheeled out to say effectively no matter what everyone criticises them for, at least there is still a banking system.

And that is the point. There is still the same banking system as before and it had failed previously and it was morally, if not legally, corrupt. What Brown and his Advisers have done is attempted to preserve that status quo and that's largely what we have got. Brown is now 'angry' that bank bonuses are still being proposed and paid - even £120m is proposed to be paid at Lloyds Banking Group which clocked up £10bn of losses, even Northern Rock, wallowing in losses, paid 10% of its wage bill again in bonuses just because they managed to pay back some of the money it borrowed on time - and we own them outright. And dear old RBS just cannot help itself - despite record losses it is paying executives £1b of bonuses, and we own over 70% of it.

And are we any better off due to this fantastic bail out and bank system-preservation?

With businesses failing daily, mortgages hard to get, house prices falling, unemployment rising, repossessions rising, we are far worse off. And it is because the Government, as I have said before, had zero idea what it was doing when it embarked down this course of action, no idea of the total cost, and little idea of how it would be paid back. But worse still, it had zero idea of the shape of the financial system it needed for the future. Ministers surrounded themselves with dodgy characters or 'advisers' many already besmirched by their companies' activities and whose intentions and agenda were simply to preserve their way of life.

I am not an expert, but it certainly makes me sick to the core to watch this unravel in front of us and listen to excuse after excuse - and the slapped-face innocent look with hurt-puppy eyes saying, 'What else could we have done?'

You could have popped down the pub for half an hour, guys, bought a couple of pints, listened and you could have saved us a fortune. Instead we'll be paying dearly for the mistakes of a few idiots for a generation.

Sad Coincidences

I am not referring to the shocking news that one of the victims of the Buffalo air crash was the widow of a victim of 9/11 - a truly awful coincidence and you cannot begin to understand the grief the family must be going through at this time.

I sincerely hope the family find a way to cope and my thoughts are with them. The next section is meant as no disrespect to the family involved.

I was referring to the more tongue in cheek shocking coincidence that Glen Moreno, Chairman of UK Financial Investment Ltd, the body set up to oversee the taxpayers 'Investments' in bailed out banks, resigning as he was found out to have links with a Lichtenstein Company who are accused of dodgy tax evasion deals.

Once again, the Government mire themselves in obviously avoidable gaffs if only they paid some attention to CVs. But perhaps that is not their modus operandi. As with cushy Watchdog jobs, being a highly paid Government 'Adviser' is really all about attaining a certain level within the Civil Service or a bank - just take Sir James Crosby as an example. He rose to be head of HBOS and so gets an invite to the 'trough' and blow me if he is not the same man who headed HBOS when being investigated for aggressive selling tactics.

Derek Wanless was invited to chair the report on public health having been the same chap who sat on the board of Northern Rock as it suffered a terminal bout of ill health. It seems that as long as you are in the 'inner circle' you get the cushy little perks.

No Coincidence

It was no sad coincidence that we get a genuinely shocked looking Alistair Darling stuttering his way through explaining why the merge between Lloyds TSB and HBOS was a good thing. In fact just a couple of days earlier, the CEO of Lloyds TSB Eric Daniels, had testified to MPs that it would prove to be a great investment. So it was indeed a large shock to find out yesterday that it had £10bn of losses.

I have blogged at length on the sorry story here but it's worth whizzing through again. HBOS is faced with going down the pan, Lloyds TSB sense an easy target and announce a takeover bid or merge. Gordon Brown panics and waives Anti-Competition Law to allow it to go ahead and when Lloyds TSB baulk, he personally intervenes at the eleventh hour to persuade Eric Daniels it's a good thing (how many nice promises of cushy jobs there, I wonder). The merger goes ahead and almost immediately there are concerns about the agreed price, losses and other business worries. Despite the fact that it could pull out of the deal and HBOS would have been rescued anyway in subsequent moves by the FSA, Lloyds goes to the Government for bail out cash that enables the anti-competitive takeover which ultimately makes the taxpayer a 43% shareholder in the new Lloyds Banking Group.

Of course, as late as December, Lord Mandelson was on the warpath against dissenters to the merger, most notably noisy Scottish politicians as it was his duty to have referred it to the Mergers Commission as the new group would have an unhealthy 28% of the UK mortgage market. Effectively, Mandelson sent a letter to these dissenters which almost threatened those who intended to legally challenge the merger and was later explained as merely advising people on how to save legal costs as they would have already have lost. A great way of explaining our legal system.

And now we have around £2bn of extra cost on this deal thanks to the losses that have surprised everyone.

More 'I Didn't Know Thats'

The Office for National Statistics reveals the blindingly obvious yet not to Ministers who are convinced they are impregnable on the Economy. As Unemployment creeps to 2m, we find that the number of foreign workers getting jobs in Britain is growing and was up by 175,000 to 2.4 million last year. No genius at maths, that would suggest to me that domestic unemployment is rising much faster then.

'British dole, for British workers', as Private Eye said last week.

Bonanza Over?

In a bid to mitigate the £2bn HBOS blow to taxpayers, Gordon Brown has come out fighting. Only this time he is doing his old 'I'll cut off my nose to spite my face' routine. Previously as Chancellor he had infuriated his old political opponent, Tony Blair, by suggesting he would forego his Ministerial pay rise. Blair, ever mindful that money was the icing on the cake for his Socialist Movement, had thrown his expensive toys around and shut him up. Well he's at it again in a vain attempt to gain some kind of popularity.

In his sights yesterday were his ordering of a review of MPs' pensions which has a £12m annual burden. No doubt this was a spiteful piece of revenge after his grilling by committees this week. It came as no coincidence to any of us that Brown was instrumental in trying to stop details of MPs' expenses getting into the public domain so we could all gasp at the appalling waste of our money there, particularly as Jaqui Smith was in the spotlight this week for brilliantly bending the system to ensure she was very, very well off. I'll bet Derek Conway is on the phone right now to work a similar scam.

No, Brown did not go and save money the obvious way - like start reviewing the incredible pension position afforded to all public workers who preferentially get a superb pension deal at taxpayers' cost while the private sector see their future getting blasted apart due to the incompetence of the same PM. That would be too much money saved and besides after creating all those extra Public Sector jobs he would look a bit silly, wouldn't he?

It's no coincidence that he already does look silly. Yet he still lives in this fantasy world that says the last 11 years of 'Stable Economy' was not a complete fantasy and yet by so many indicators, Britain is far worse off and declining ever further each day, than we were in 1997.

It's just a question of when will the voting public realise this as well?

Playing God

Shares in newly formed Lloyds Banking Group have dived over 40% on news that losses of one of its constituent companies, HBOS, were significantly more than estimated at £10bn for 2008, up by £1.6bn since the announcement of its merger with Lloyds TSB only in November.

For those of us sharp enough to remember the series of events, at the eleventh hour Gordon Brown himself intervened to ensure the merger went ahead.

Daft Decisions

The whole merger was competitively questionable enough with the new group having an unhealthy 28% of the UK mortgage market, but after Brown's intervention Lloyds TSB soon went to the Treasury for a cash bail out. So, not having the finances to have achieved the merger in the first place, Lloyds TSB asked for a bail out which subsequently led to the UK taxpayer being forced to take a 43% stake in the newly combined banks now called Lloyds Banking Group.

So our little investment portfolio looks a bit grim today at the announcement of these unforeseen losses.

Due Diligence

Rather like Fred Goodwin's obsessive behaviour in doggedly chasing and raising the price of ABN AMRO Bank only to call it 'bad timing', it seems that lack of Due Diligence is becoming a watchword of our Government and specifically Gordon Brown as they reel in shock that a) RBS, which is over 70% publicly owned, awards its executives over £1bn in bonuses after clocking up huge losses and b) that the banks (HBOS & Lloyds TSB) they forced to merge, bail out and take a stake in have far greater losses than they knew (or not cared) about. Very much like the Northern Rock debacle where our considerable generosity as taxpayers bailed it out and loaned it tons of money only to see management and staff get paid a bonus just for paying us some of it back.

It's a lack of attention to detail which is becoming a recurring theme for this Government and really is the defining characteristic of their continued faith that by blasting huge sums of money at the financial system that it will be more than enough to kick start the economy.

But what are they paying for?

So far, all we see is bonuses getting paid for turning up to work and doing some of the things they are supposed to. We are seeing banks continue to behave as if nothing has happened and more and more losses flying out of the accounts which just go adding to the ever-increasing tab paid for by the Taxpayer.

I have said it before, but it may well be about time we stopped paying our tax as a wake up call to this Government to start thinking before it pours the money either into the pockets of executives who do not deserve it or stop bailing out banks who cannot tell you what their exposures are to losses.

If we, as taxpayers, got the slightest bit wrong in our sums on our returns we would be slaughtered and hounded like criminals. We are seeing the rise of a knew type of crime - wasting money. I see banks either lying about their financial situation at worst, covering up as an in-between level or just incompetent in being able to calculate losses, demanding taxpayer handouts on unprecedented scales which the Government gives without our consent.

This kind of unwise investment decision making by the Government, and banking incompetence to assess losses and then spend on bonuses, should really be meat and drink to the FSA for poor advice to the investor - i.e. the taxpayer - and we should be protected.

In different times, this might be construed as fraud and theft. For now it's called incompetence - which is criminal enough in my book. But Brown is playing God and he thinks he is both clever enough and mandated enough to do what he wants. I hope we all sober up soon because he has no clue.

Jobs You Will Never Get

Let's face it, if you are an experienced bank executive who is the sort of individual who does not like underhand dealings, aggressive sales tactics and misselling of products, you are hardly likely to end up as an official at the FSA.

In fact, slice and splice that statement to any industry and you will never work as a senior ranking person on its Watchdog. They don't want people like you. They want people who have multiple Non-Executive roles who cannot afford much time to do the serious business of regulation and who have served their time in Civil Service or Banks at the highest level, shaken the right hands and know how to make a bob or two.

Such people are deemed the ONLY people who are trustworthy enough to do such jobs. I would further contend, you would be hard pushed to find such jobs advertised anywhere in the sorts of periodicals, journals, job boards and newspapers you read and should you be lucky enough to see the advert, your application would hardly elicit a response.

You are not worthy.

The Worthy

Sir James Crosby, ex CEO of HBOS, who were subject to an investigation by KPMG after a senior manager whistleblew on their aggressive activities in growing their business, is worthy. It was under his tenure as CEO of the combined Halifax and Bank of Scotland merger, that such allegations were made. It was also alleged by the Whistleblower that he was dismissed from HBOS for 'losing the confidence' of the management, a euphemism for 'We don't want your sort around here, my son'. HBOS always contended the individual was made redundant due to restructuring.

This James Crosby is indeed the same ex CEO and regulator.

Soft Spot

Of course, this generous Government has a soft spot for HBOS. In its time of need, not a couple of years after Sir James stepped down as CEO and took up his equally lucrative role at the FSA and advised to the Treasury, the very same ministers oiled the cogs of a takeover of HBOS by Lloyds TSB. Well, they didn't just oil - they actually stepped in at the eleventh hour and the PM himself personally urged the merge of the two companies which would mean the new single entity would have no less than 28% of the UK mortgage market. It was troubled times indeed but a very curious decision.

Oh, and the oiling continued. For pretty soon afterwards, despite the fantastic due diligence, Lloyds TSB went cap in hand to the Government and asked for bail out cash. The result was not only did the Government aid and abet an uncompetitive takeover preferentially (I didn't see any other company offered money to take over HBOS) but the Government then got the taxpayer to foot the bill and we are all rewarded with some proxy shares in the new single company.

The Scent Of Corruption

This whole financial fiasco has more than a whiff of fraud and corruption. That a former CEO of a company investigated for its role in underhand dealings in the financial world can even be considered for a role at the FSA is bad enough, to have been given it is extraordinary. In fact, the argument would have been far stronger that the displaced Whistleblower was precisely the sort of individual who had the courage to see wrong doing and report it - a person of actions and courage of convictions. Clearly an individual not motivated by lucrative financial scams.

No, such a person is not worthy of such jobs probably as he would take it too seriously and actually find things which were not right, investigate them and possibly punish the companies involved. That is clearly not what the FSA is there for. It's why it is populated by former senior banking executives and part-timers who know how to tow the line.

Just like RBS larging it on bonuses with taxpayers' bail outs, this Government has no intention of changing the banking system or regulating it. It just wants its booming economy back and to do so it realises you have to reward the status quo. Only bankers can solve our problems, only bankers can regulate themselves.

Whisteblowers are not welcome.

Honour Preserved

But fear not - Sir James Crosby is an honourable man. With no fear of a scandal to be found, he has stepped down from the FSA knowing full well he has done nothing wrong, certainly nothing that can be pinned on his hand-made suit. He cannot be a Labour man as he would have just stuck his chin out and gone on even when the stench of alleged guilt was gagging. Not Sir James.

For him there are plenty of other Non-Executive jobs and Watchdogs to populate where his type of 'see no evil' skills are in much demand.