Mandelson the mortgage superman

Today Lord Mandelson of All Those Places Nobody can Remember – he of such things as spinning, getting himself a super mortgage, yachting in Corfu and confusing mushy peas for guacamole – once again dons his hat as the government’s big business boss.

Indeed, it’s now suggested Mandy is virtually the deputy prime minister. He who was once Brown’s arch enemy has emerged from the shadows as his closet confederate.

Mandy is going to summon the bank bosses and give them a finger-wagging for not passing on interest cuts to existing mortgagees, those trying to get a mortgage, and to Britain’s businesses in danger of disappearing down the plug hole known as recession.

Whether this is political posturing – or reality – we should soon know. It is suggested by some cynics that what is said publicly is different to that uttered privately to the banks.

The government is not stupid – although one sometimes wonders. It knows banks cannot lend to people or businesses that won’t repay the money. Banks are businesses. They worry about their bottom line. Let’s not forget that rash lending triggered this mess. .

How far would – or can - the government go in forcing the banks to toe the line. If it demanded that the banks must put the national interest first and their shareholders second, then that would be quite a ticking off.

Could such macho-threats be enforced? Yes. But it would need radical action. The government could seize control, Soviet style. Tanks outside every High Street bank. Canary Wharf and the Square Mill ringed by soldiers. Bosses run out of town. No pensions or payoffs for failure. Assets grabbed. No compensation for shareholders.

Question: Who would run state banks? Answer: Worker-councils. Q. What would happen to profits? A. Abolished. Q. How could the banks lend? A. By doling out taxpayers cash.
Q. So there’d be bigger tax bills? A. Of course. Money doesn’t grow on trees. There’d be bigger taxes to make loans and to pay for the extra armies of state bureaucrats. Q. Isn’t that a bit mad? A. No more so than bailing out the banks with public monies and then letting them go their own sweet money feathering their own and their shareholders nests. Q. Seems like we’re in a cleft-stick? A. Now you’re getting the picture.

Stalin had a phrase. No man no problem. Or if you like: No bankers no problem. But sadly it doesn’t work. Ask all those millions who tore down the Berlin Wall. And it’s difficult to see the ermine-clad Mandy of Somewhere or Other chewing on his guacamole and storming the Winter Palace. That would be an entirely different gameski.