We know that the government’s borrowing spree is going to have to be repaid by someone. But who? That’s the question the Pre-Budget Report ought to address.
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As if we didn’t have enough of a financial collapse, the UK is also facing that regular curse of the past – a sterling crisis.
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Why should investors – nevermind the government – give the banks new capital when they were so inept at looking after the capital they had?

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Is the ban on short-selling shares working? No-one can say, so let’s set up an experiment that allows hedge funds to deal in half the stocks while the rest remain protected.
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If the political parties are to argue, then outbidding each other to help small business is more productive than many of their clashes. However, words have to be translated into cash.
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A six-month Vat holiday for small firms, nevermind a cut in National Insurance, is not the antidote to recession. It will be impossible to recover the deferred tax.
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Gordon Brown is basking in international glory for saving Britain’s banking system, but in the cold light of day, everyone – banks, government and regulators – got the terms wrong.
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The PM has saved the financial system but not his reputation as an investment manager. His bank rescue means a loss on both capital and revenue accounts.

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The state bank bail-out is not nationalisation after all. The £50bn of preference shares the government is offering to buy looks like capital but, as any finance director knows, is really a loan. It protects the taxpayers’ money but there will be no windfall if banks’ fortunes soar again.
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Governments think if they help the few borrowers unable to pay their bills they will help relieve the banking crisis. What they’ll do is encourage lots more to default and thus make the crisis worse.
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