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Socialism's big day

Editorial Staff

Britain's Left, led by Gordon Brown who, with Tony Blair has presided over a stealthy but steady move towards both socialism and republicanism in the UK over the past eleven years will today, via Brown's proxy at the Treasury, announce the biggest step left yet, as they nationalise large parts of a strategic industry.

When MG-Rover went bust due to cash-flow problems, Blair's Labour government left it, and its workers, to its fate. After all, they didn't know many car workers and in the Blairite version of socialism, blue collars were disposable - the money, wealth and influence was in white collars, particularly in the financial sector.

As Britain's manufacturing industry simply died away, the UK became the modern equivalent of a one-horse town, and that horse was financial services. "Invisibles" became what kept the UK afloat.

It was then, and it is now, a stupid policy and now it's come back to haunt Brown who claimed to be the Chancellor of prudence, all the while rapidly expanding government and government expenditure and presiding over unprecedented increases in taxes, many of which are hidden unless taxpayers know where to look for them.

Now Brown is to announce, via Alistair Darling, that the UK government is to invest in major banks - Lloyds TSB, HBOS (which LTSB agreed with Brown's express intervention to circumvent competition rules to buy at a price that now looks dangerously over-inflated), Royal Bank of Scotland (RBS) and Barclays (which has agreed to pay a very substantial sum to buy the US assets of Lehman Bros and a much smaller sum to buy an Indonesian bank).

UK Taxpayers are, therefore, being asked to fund the purchase of HBOS by LTSB (isn't that a derivative?) and the purchase of Lehman by Barclays.So far, it seems, no one is asking why taxpayer's money should be used in this way.

HSBC and Standard Chartered are not asking for help (see update). And their share prices have not been hit by the same heavy selling as the banks mentioned. HBOS fell 40% yesterday, of which 30% was in the first 30 minutes of trading. RBS fell by almost as much.

The intervention will distort markets: If those banks do come close to failure, then they should be sold for a song. That's the free market. And there is no doubt that there are many who are waiting for that to happen.

Perhaps Brown is being spooked by the risk of UK banks finding themselves subject to investment from foreign sovereign wealth funds. Oh, we forgot: that's already the case for several banks. And they are currently not so concerned as to their investments as to be trying to become bond-holders or similar.

That leads to one conclusion: this is a golden opportunity to restore the cause of nationalisation into UK government.

UPDATE: 08:02: The Treasury statement includes support for the scheme from both Standard Chartered and HSBC.