Gulp! The Chancellor (and one must assume the Prime Minister) has given a no frills guarantee to the banking system that depositors in any bank which fails will not lose a penny. In the case of Northern Rock, the figure being touted about is £28 billion.

I confess to being troubled by this decision. Surely some element of uncertainty ought to be kept so as to ensure that banks of all shapes and sizes remain prudent? Does not the giving of a signed blank cheque drawn on UK Taxpayer PLC to any Bank that may go under leave us exposed to the possibility that a Bank might act imprudently in the sure and certain knowledge that if it all goes pear-shaped, the taxpayer will pick up the tab?

This crisis is curious. We were told that the various injections of cash into the system by central Banks all over the world were caused by the potential failure of US based lenders over-exposed and vulnerable because of their involvement in the risky sub-prime market there. Yet the first country to experience a run on a bank is the UK. That surely is a worrying fact which needs further to be explained. The fear must be that Gordon Brown as Chancellor has failed properly to ensure that as a nation we have not allowed credit to rise to a level where the whole banking system has potentially been undermined.

Two other points arise. I have already adverted to this (HERE on Friday last week) but there is, surely, an issue over what the Chancellor knew and when he knew it and, given his knowledge, did he take adequate and timely steps in relation to the problems or did he fail to act in good time thereby allowing the problems to become exacerbated?

But the most interesting one is that raised by some observations today on the Today programme. One email was read out, which was said to typical of many others, to the effect that the writer was a depositor in Northern Rock and only became worried about his savings when the Government started to say there was nothing to worry about.

Does this not demonstrate beyond a peradventure the extent to which Blair, Campbell, Brown et al. have cynically and utterly debauched the public’s trust and confidence in Government and politics by their reckless pursuit of control of the news agenda, by their lies, dissemblance, disingenuousness, half-truths, evasions and economy with the truth?

Pro Referendum Rally

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