Complete failure of duty

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I have looked at what was announced yesterday with regard to the management of the government's investment in the UK banking system.

Let's summarise what we get. We will now have UK Financial Investments Ltd, owned by the government, taking passive stakes in UK banks with limited management agreements in place, but with the primary objective of making a financial return. The whole structure is headed by a former director of one of the failed banks. It will be dominated by private-sector directors even though it is using public sector money.

What is this in effect? It is the replication of the failed private equity model of loan backed finance intended to make a quick buck for the investor by selling on the investment stake at the first possible opportunity without ever having really impacted upon the fundamental business model of the investment target.

This is a staggering neglect of duty by Alistair Darling and Gordon Brown. It is absolutely apparent is that the business model of these banks (indeed of all banks with investment banking arms) has failed the world over but the Brown solution, trumpeted as the salvation of the world's financial crisis, is to do a little financial fiddling on the side whilst leaving the fundamental cause of the malaise in existence and in abeyance for a year or two until normal abuse can resume.

I am staggered by the incompetence of this approach. I am staggered by the dereliction of duty to manage taxpayer money that it represents. I'm staggered at the failure to grasp the opportunity to reform that this situation represented. I am staggered at the failure of leadership. But most of all I am staggered at the sheer economic incompetence of it. Instead of taking this as an opportunity to add value within our failed financial system we are instead being told that public money, provided at taxpayer risk, is to be used to support continuing private-sector abuse of the world's financial, regulatory and taxation systems at enormous long-term cost to us all.

Whatever happens in the USA tonight, I'm depressed at the prospects of Britain. Brown and Darling are bad, and the Tories are even worse. What did we do to deserve this?