Lloyds Bank’s audacious takeover of its major competitor (HBOS) – heavily disguised at the time as a rescue bid – has been challenged by ‘Brussels’ – that is the European Commission. In fact it was not a rescue bid – the hasty takeover almost sank Lloyds, and the taxpayer had quickly to undertake another rescue – this time of the by-now massively bloated Lloyds Bank.
The EU keeps an eye on state subsidies and unfair competition. and because Lloyds now provides almost one third of all current accounts in the UK, the Commission “wants to see Lloyds’ share of the market reduced by just 8%.”
Hardly radical, but sad that it takes a couple of bureaucrats in Brussels to spot a monopoly, and demand action.
In the meantime, Lloyds in March sought insurance, or guarantees against losses (the so-called ‘asset protection scheme’) from taxpayers. The government duly obliged on our behalf. Lloyds is now baulking at paying taxpayers an insurance premium for this protection – a fee of £15.7 billion. So the bank – 43% of which is owned by the taxpayer – is now trying to raise £25 billion from the private sector to escape – I am not sure what? Its need for insurance against losses – and/or its obligation to taxpayers?
Its clear there has been a ‘compression fracture’. Labour’s spine needs further stiffening.