In These New Times

Lown Turner

Western Mail

10th October, 2008

SO where are you going to get your £16,000 from, then? That’s how much critics of Alistair Darling’s £250bn bank bail-out say it’s going to cost each of us.

Crikey, the way house prices are going, £16,000 will soon buy a flat in some parts of the country, not that the owner will be able to get a mortgage of course.

Alistair Darling says, not to worry, most of the money is just guarantees, not actual cash.

This is a bit like a smoker who announces they’ve given up, but they’re keeping a spare packet of B&H in a kitchen drawer “just in case”.

You know they’re going to smoke them.

With banks as wobbly as Amy Winehouse after a night on the town, isn’t there a chance these guarantees might need to be used too?

Even the bail-out money that is actually real, is not actually real, says Darling.

It’s just “government borrowing”.

That phrase is uttered by the Chancellor as if it has a magical power. But the last time I looked, Alistair Darling was not Harry Potter and the pen with which he signed away our money is presumably not an elm wand.

Government loans are like any other loans.

You have to pay the interest, unless Gordon Brown has discovered some incredibly generous Russian oligarch with a spare few billion, who fancies a life peerage.

A few weeks back Gordon Brown told us that we were in a mess because we’d all lived beyond our means and we needed to learn prudence and financial restraint.

Fast forward to this week and Gordon’s telling us that it’s OK to put £250bn of our money on a roulette wheel. My vision has suddenly blurred. Oh, that’s my head spinning.

This isn’t to say that I can think of a better solution than Darling’s plan, sealed, we are told, over a Balti.

A month ago, that curry would have seemed a sign that he was economising – what, no dinner at The Ivy for the banking bosses?

However, in these grimmer times, it looks like extravagance. Hasn’t Mr Darling seen Jamie Oliver’s Sainsbury’s ads.

He should have got his staff to whip up some “feed your family for a fiver” pasta and meatballs in the Number 10 kitchen rather than wasting money on takeaways.

We must all hope that Darling’s plan works. But we can still ask questions about exactly what we have all signed up for.

Question one has to be, where the heck is all this money coming from?

Darling insists there will be neither tax rises, nor spending cuts. And for his next trick, will he saw Hazel Blears in half?

The billions and trillions of pounds and dollars being talked about are such huge sums as to have an unreal quality, but unless Mr Darling is going to sit down at his kitchen table and draw the Queen’s head onto strips of scrap paper, this money has got to come from somewhere.

The IMF – how very mid 70s that sounds – is funded by the same governments who are now doing the equivalent of sitting outside Tesco with a cardboard sign that reads: “Hungry and homeless”.

Is there some secret country whose money markets have been miraculously unaffected by the tornado that has devastated everyone else?

Does Outer Mongolia operate an inter-bank lending policy? If there is some international banking safe haven, we should all know about it, because that’s where we all want to stick our cash.

But then, the poor unfortunates who put their money into Iceland thought they were being clever.

Niche banking, how very 2007. None of us wants to be clever now. We just want to be safe.

No wonder, we look at Darling’s plan, the one he and all the other experts tell us should do the trick and we, the humble punters, can’t make the sums add up.

As we cross our fingers and offer up a silent prayer, we could also ponder this.

How ironic that the solution to a crisis that was caused by risky borrowing is… risky borrowing.