Forget, if you're not already inclined to do so, the dizzying merry-go-round of billions of pounds circulating between the government and the banks they own. It is bad news – the equivalent of the schools budget being ploughed into keeping the financial system afloat (again).
We will be paying for it, one way or another, for decades. There will be no little box on your tax return or payslip saying "banking bailout levy", but the cost will be felt every time you pay an inflated council tax bill, or you have to wait longer for NHS treatment, or drive on our pot-holed roads. But, in a way, it is just a matter of book-keeping.
As Evan Davis devastatingly pointed out to Alistair Darling on the BBC's Today programme yesterday, if the banks get into more trouble, then any "penalties" they pay to the government or any vast new losses they incur will be mostly paid for by the Government anyway.
What's done is done; Royal Bank of Scotland and Lloyds Banking Group have amassed vast quantities of bad debts, and the Government – taxpayers – are responsible for them.
We're lumbered with them, and have been since they were semi-nationalised last year. Then, as now, they have got us over a barrel; pay up or see the banking system melt down. Tails the banks win – heads the taxpayer loses. After all, they're too big to fail, aren't they?
It is irritating. The Government has acted to stop those famously obscene bonuses being paid out in "our banks", but that seems only of limited use when the likes of Goldman Sachs have earmarked £10bn for their staff. The Treasury knows this, and that it cannot compete with Goldmans when it has to answer to unsympathetic voters.
It is a mess, and the Chancellor wants out of the banking game, and as soon as possible. How to do it? Get the healthy bits back into the private sector.
The break-up of Lloyds and RBS – bringing back the old Williams and Glyn's Bank or the Cheltenham and Gloucester as a start – are more to do with EU pressure, but these new banks should be more willing to give you a mortgage or a small business a loan than their loss making state-owned ex-parents. They will raise some money, but none of this is much of a deal for the taxpayer. Then again, it was never going to be.Reuse content