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Tuesday, July 21, 2009

A Massive Fraud on The Taxpayer

Fresh embarrassment for the government, as its economic "credentials" and "honesty" have been once again found wanting. This time the shortfall between government spin and reality has been highlighted by The National Audit Office (NAO), which has refused to sign off part of the Treasury's annual accounts.

For why?

Seemingly there are some quite serious problems relating to the government's insurance scheme, which was designed to help banks with bad loans.

The scheme was announced in February, and was designed to provide banks with protection against future credit losses on certain assets in exchange for a fee, its ultimate goal was to kick start the lending process.

However, the NAO states:

"In 2008-09, HM Treasury incurred some £23.8BN more resources than Parliament had authorised in the Supply Estimate. This represents an 'excess' for which further Parliamentary authority is required."

In other words the government and Treasury attempted to act "ultra vires" (outwith its authority), its promises vastly exceeded its powers/reality.

Vince Cable, Liberal Democrat Shadow Chancellor, used a more picturesque language and described the scheme as "quite simply a massive fraud on the taxpayer".

Quite how many "frauds" of this nature the government has tried to foist upon the taxpayer is unclear.

However, yesterday's much trumpeted Nissan deal, re electric batteries and the possibility of producing an electric car in the UK, may yet be blocked by the EU.

I fear, wrt the workers who have been told their jobs are safe, it may still be too early to pop the champagne corks.

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