It seems that Gordon Brown, fresh from the by-election win in Glenrothes, has a new found confidence. In previous weeks instead of action, he has been urging, asking and hoping that other people would bail the Government out of the economic problems the UK faces. He has been polite in his request to banks, petrol companies, Gulf States, the European Union, the IMF and just anybody else he can find that might have a few pounds to spare.
But not anymore. Now our beloved Prime Minister is taking decisive action. No more mister nice guy. He has a new weapon to use. It is staggering in it's potency. The new approach is this:
Do as we ask - or I'll arrange a meeting for you to see Alistair Darling.
The BBC reports here that, with only Lloyds TSB having announced it will pass on the 1.5% interest rate cut, the Government has held a meeting with bankers.
Jack Straw shook his head angrily on Question Time last night when Brian Eno said that the Government had effectively nationalised the risks in the banking sector, while the profits remain in the private sector. But Eno is correct. We all know that Libor is the key to lending, but with Government providing guarantees on lending, liquidity injections, swaps of risky assets to prop up banks, then it must also extract a price in return.
It is no good to simply ask, expect and arrange meetings. Individuals and small businesses are hurting now because of failures in strategy and decision making by banks and by failures in regulation by the Government. Action must be taken...