Northern Granite

If Alastair Darling was your father, how confident would you feel that you'd get your pocket-money each week? Exactly.

The fiasco of Northern Rock exposes not only the foolishness of allowing banks to operate in a manner that is to all intents and purposes unregulated, but also the poor grasp of financial reality at the Treasury.

It is a common scenario that people who have difficulty meeting their credit card payments acquire new cards with which to service their existing ones. Or they remortgage their home, and remortgage, and remortgage.... Well that's what the board of the Northern Rock have been doing on a vast scale, and like the above individuals they have got caught; there's no more credit available and they've got to start making payments from their existing funds. What existing funds? That's it, isn't it, there aren't any; truth be told Northern Rock has gone bust. Fancy words may suggest that it merely short-term cashflow difficulty but it ain't; they're as bust as a busted flush can be.

Now you'd think that a bank that not so long ago was a building society would be ok given a bit of time. All those people with mortgages keep paying them back and providing they don't lend out any more they'll soon have a nice healthy balance again and everything will be hunky-dory. If only... because Northern Rock have been very reckless in who they lend money to, and a lot of their customers are going to have as much difficulty meeting their commitments as the bank does. Not only that, but far more problematically Northern Rock have been flogging off their 'safe' mortgages in order to fund the unsafe ones. They've been using a 'charitable' offshore trust called 'Granite' to do this; it's a 'charitable trust' for tax reasons, none of which are charitable, but in reality it's just another company. It's Granite who own the safe mortgages, and who have borrowed against them to service Northern Rock's indebtedness.
Just another company? Well, sort of. As far as the law are concerned they might as well be, but in truth Northern Rock and Granite are one and the same company, trading under different names both for tax reasons, and more cynically to keep profit and risk apart, with the risk being taken by those who have been foolish enough to deposit money in this ill-managed institution. So what is the government going to do about Granite when it nationalises Northern Rock? Remarkable as it might seem, nothing at all. It would have made more sense to do things the other way round; nationalise Granite and let Northern Rock go to the wall. Then, when the Granite mortgages come good, use those funds to repay the taxpayer and others who have been swindled by the Northern Rock board. Surely not nationalise the part that has irrecoverable debts, and leave the profitable bits to the crooks who ran the whole damned enterprise to start with.

The Northern Rock crisis impacts on everyone; not just the employees, nor the taxpayer. The lending of excessive money secured against property is the biggest factor in driving the price of property up, and that drags the cost of living with it. If affordable housing was regarded as a desirable objective, we would have been better served if Northern Rock had gone end up; since it hasn't been allowed to, the government must bring Granite into public ownership as soon as possible, without any recompense whatever to the financial leeches who operated such a cynical rip-off.

Diana: the inquest

Another 'not quite politics' post, but certainly one that politicians have a considerable part in.

It is almost impossible to conceive what Lord Justice Scott Baker is doing allowing the inquest on Princess Diana to become as farcical as has been for some time now. The enormous public expense is as nothing set against the wholly inappropriate trawling through Diana's private life; of interest to those of a voyeuristic disposition no doubt but a disgrace to a society that claims to have civilised values.

Rational people recognise that Diana died as a result of a car accident, in which an employee of Mohamed al Fayed who had been drinking was at the wheel of the car concerned and driving it at an excessive speed. The firing of a flashgun by a press photographer in front of the car in the Parisien tunnel may or may not have happened, and if it did it may have been a factor in the crash. All this could have been settled within, at an absolute maximum, two days. It is the verdict the jury will eventually return. But instead the whole conduct of the inquest has been at the behest of a delusional paranoiac who will, when the jury returns it's verdict, claim that the 12 of them along with the judge and everyone else is part of the same lunatic conspiracy.

It would have saved an awful lot of time if al Fayed had been asked at the outset whether he could identify anyone who wasn't involved in his labyrinthine 'conspiracy' , or even to provide one shred of proof for his absurd and irrational claims. But Diana and her family should have been treated with more dignity regardless of any other decisions as to how this wretched 'inquest' was to be conducted.

This is not of course the first time that Mohamed al Fayed has been in the public eye. The last time was when he was slipping bungs to corrupt Conservative MPs. The government was right to refuse him citizenship, the time is long past when they should have reviewed his residency status. And Lord Justice Scott Baker could usefully reflect on whether he should call time on his judicial career following this wretched and inexcusable performance.

Rowan Williams flags up the utter irrelevance of the C of E

More religion than politics, but when a member of the House of Lords proposes changing the law, it comes within the remit of this blog, I think.

I know he thought he was being reasonable but he certainly wasn't. This country is already awash with 'honour' killings and other less violent oppression of women in the name of religion. And Dr. Williams thinks that's ok, does he? Because he's lending legitimacy to just such behaviour, indeed he's wanting to give it the full backing of the law. It's as if he's never heard of the Enlightenment.

We live in a country where people are allowed to choose their religion, or maybe none, their partner, their job, their home and all the other life choices that don't interfere with the same rights for others. And they're allowed to change their minds, to divorce, switch religions, and enjoy the freedoms of living in a liberal society.

Has there been a rush of Moslems praising Dr Williams proposal? No there hasn't, just voices raised against it. Moslem women who don't want to live in the sort of society espoused so foolishly by Dr Williams.

Even the odious George Carey has taken the opportunity to put the boot in. Odious and then some. I bumped into George Carey once, during the interval at the National Theatre. Well actually it was him who bumped into me. Rather heavily. It was the queue for the bar. Perhaps he thought that being Archbishop of Canterbury gave him prior rights to get at the alcohol; or perhaps he just needed it badly. He certainly looked as though he did.

No sooner have I written this than I find there's another one of them at it (no, not the drink this time, just sharing his political opinions). The portly Graham Dow has spoken out in his role as Bishop of Carlisle to tell us that he's taken a look at Gordon Brown's government and saw "a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the names of blasphemy."

"And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat and great authority."

"Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six."

Sometimes you wonder where they find them; and what on earth did Carlisle do to have a deranged lunatic like Graham Dow inflicted on them. With bishops like these, who needs enemies?

The sooner the C of E is disestablished and the bishopric fades into oblivion the better as far as I'm concerned.

Remember the Hamiltons?

Remember Neil and Christine? That's right, those two. Well, Derek Conway and his devoted wife are digging themselves further and further into exactly the same hole: We've done nothing in the least bit wrong, oh and by the way MPs are grossly underpaid...'

And now Nick and Ann are at it too. No, not that couple from TV AM all those years ago, but a singularly unpleasant pair of Tory MPs, who have some nice little tax-avoidance scheme up and running all funded through their parliamentary expenses. They're in the club too, the we've-done-nothing-wrong club.

What chance they'll start handing out MPs' expenses as cash stuffed in brown paper envelopes?

Actually the Winterton tax-dodge is something that needs addressing beyond the straitened circumstances our MPs seem to all be in these days. Inheritance tax is one of the few taxes that should enjoy widespread support; it should redistribute the excesses of the wealthy among the rest of us over a period of time. But the really well-off don't pay it. A good lawyer and accountant soon render it unnecessary. At the top end of the market, the royal family are a good example of how it works. The queen pays tax, or so we're told. But when she dies, you can be jolly sure that her private wealth won't trouble the taxman one iota, and exactly the same goes for the early retirement pension scheme her son belongs to (the Duchy of Cornwall, isn't it?). But you don't need that level of wealth to benefit from such wheezes, just the sort of sums a couple of MPs are able to winkle out of their pay and allowances over a few years.

There's only been one beneficiary of this latest bout of Tory sleaze, and it certainly isn't that cuddly Mr Cameron. So come on Gordon, take the initiative for once and act now - make these 'trusts' subject to the same tax rules as the rest of us; or better still, just make them illegal full-stop.