Howard's End

Cowardice and incompetence are a toxic combination in any walk of life. They are traits particularly ill suited to the office of Prime Minister.

This financial crisis is a direct result of New Labour grovelling to the City for the past decade. They didn't control the housing bubble, turning a blind eye to 125% LTV deals and self-cert applications. They deregulated the market, allowing institutions to turn the Square Mile into a casino.

When the system inevitably fell over, Gordon Brown behaved as the gutless bureaucrat he is. In stark contrast to the US, where capitalism's greatest cheerleaders saw the game was up and reacted quickly to control short selling and bring key institutions into public ownership.

It has been obvious for months that HBOS has been the target of speculators. The Government should have outlawed short selling at the start of the credit crunch. When HBOS fell over they should have temporarily nationalised it (a bargain at about £8bn). Controlling HBOS and Northern Rock would have enabled the Government to manage the mortgage slump effectively, and keep more people in their homes. But that would have involved, y'know, governing......

So instead Lloyds TSB get the keys to the City, HBOS employees get their p45s, and we all get worse deals in the mortgage and savings market in the future.