Gordon Brown has taken a great liking to decribing the Conservative party as the “do nothing party” and he may well have a point, because until recently, they (the Conservatives) have preferred to paint an austerity picture rather than coming up with something tangible or credible. But what of the Labour government? Rather than doing ’something’, their motto could be described as ‘do anything’, so long as they appear to be doing something.

As part of the government banking bailout in October last year, the taxpayer ended up with 58% of the Royal Bank of Scotland. However, whether this was a bailout, rescue or a necessary evil, the fact remains that the government, through its advisors, were obliged to act diligently and with care. Particularly given it is our money, not theirs. But did they?

There are reports that Gordon Brown is furious that Treasury officials have only just discovered that ABN Amro, the Dutch bank taken over by the Royal Bank of Scotland in 2006, will write-off a £2.5bn loan to LyondellBassell which is reported to be teetering on the brink of bankcuptcy with £18bn of debts. Given the government was taking a controlling interest in RBS, it was right and would have been expected that whatever the circumstances, there would have been a process of ‘due diligence’ to ensure that there were no surprises in store. Furthermore, the taxpayer would have been right to have expected the government and or their advisors to have secured warranties against any undisclosed liabilities that the bank had. Was this done, if not, why not? Anywhere else this would be standard practice.

If these reports prove to be accurate, then at best, this government has demonstrated that they acted in haste and at worst, that they have been negligent resulting in a further cost to the taxpayer of £2.5bn. Furthermore, it could be argued, that if they missed a debt of this magnitude, how many other, ’smaller’ questionable debts have been missed? In my view, this government has already demonstrated a flair for acting recklessly with taxpayers money and a culture of blaming someone or something else. However, from my perspective, there can be no excuse, when spending so much of the British taxpayers money, for not acting responsibly and demonstrating best practice whatever the circumstances. The bottom line is, had this transaction been competed properly there should be no surprises unless there was a failure to disclose and if the latter was the case, then the government should be able to claim against warranties.

This banking bailout involved huge sums of money and the public is entitled to know that the government, ministers, civil servants and advisors all acted appropriately and with due care. There needs to be an independent public enquiry into what measures the government employed to protect the public purse when this government pledged taypayers money to the banks. This should be wide-ranging and at the very least, include details on what level of due diligence was employed, whether warranties were sought and received and what other commercial conditions were placed on the banks. Given, unlike many other countries, this government did not need the approval of parliament to invest these vast sums, evidence must be provided that the taxpayers interests were protected at all times. If it should subsequently be proven that individual government ministers, civil servants or advisors have acted negligently, then they must be prosecuted.

Gordon Brown likes to say that this governments’ intervention is measured and appropriate. To me it looks as if this government has little or no idea of what it is doing, opting to do anything, rather than something. More akin to a gambler having his last throw of the dice, rather than a government in control or one which knows where we are going. I literally shudder when I consider the damage that has been done to the British economy by this excuse for a government and it juts gets worst, when reports of undiscovered liabilities, on a majority owned state asset are discovered 3 months after the deal has been concluded.

I read a post on the British Politics blog which referred to the statement by an unamed bank official, on Channel 4 News, that “banks were not charities”. Now I agree with the original posting, that it is a bit rich that the same people who came with their begging bowls for a bailout, should now, having received what they wanted, make such a statement. On top of that, they threaten not to pass on any further interest rate cuts, even though they must know that the economy needs this type of monetary stimulus.

This had me thinking, under current rules, the banks are set for another win at the taxpayers expense. At the moment, the banks are making massive write-offs, this means that the government and therefore the taxpayer, will not receive any corporation taxes from the banks. Less tax receipts from the banks, means, ultimately, more will be needed from you and I. Now here is the rub, banks can quite legally carry over losses from one year to another, now given the size of their losses, they could end up not paying any form of corporation tax for several years.

So, not only will they have received taxpayers money to stay afloat, they will contribute nothing to the economy for several years to come. This may be perfectly legal, but it is completely unacceptable. I believe that the government should act now to prevent the banks and any other third party that has received taxpayer funding from being able to carry over past losses, to offset against future profits. Think about it, when we are all having to pay for the excesses of this government in higher taxes, the bankers will be coining it with large bonuses, brought about, in no small part, from the fact that they will not have to pay corporation tax.

It is unlikely that Gordon Brown & Co will be in government when this happens, but at the very least, he should start the ball rolling and David Cameron needs to come out of his shell and insist that something is done. The banks effectively held us to ransom, when they embarked on high risk expansionism, requiring a massive injection of taxpayers funds as well as guarantees, they now intend to hold us to ransom over passing on any future interest rate falls, they must not be allowed to win again. For a government that simply revels in state control, perhaps they should consider getting some over the banks?