Having it both ways
Did you hear John McFall on GMS this morning? He who chairs the Treasury Select Committee in the Commons?
The committee that is routinely described as "influential".
Mr McFall is a thoughtful and diligent MP. Disdaining bombast, he offers precise analysis, generally grounded in three elements: an evidence-based approach, a concern for the disadvantaged and basic loyalty to the UK Government.
I listened with interest to his views on how to encourage the banks to sustain productive lending in these difficult times.
In particular, I was struck by his key point. "We need competition", he said, adding for emphasis: "We need more competition".
Tiny point - but how does that square with the drive to merge HBOS with Lloyds TSB: a deal which in other circumstances would be ruled out by fundamental competition law?
Mr McFall was disarmingly open about the limits of political power.
Neither he nor ministers could set a rate for the banks with regard to lending. He was reluctant to rush to legislation, urging the banks to consider the gains in public image of being co-operative.
More generally, he stated: "You can't interfere with the workings of an organisation and I think it would be foolish for any government to lay down rules, hard and fast."
So far, so clear. Is it not, then, a touch illogical, for example, to complain bitterly when Northern Rock exercises due diligence in recouping difficult debts?
The Rock is now nationalised. It has been warned that it must timeously repay the debt due to the public. Why then should we be surprised if, under that constraint, they seek to get back some of their bad debts?
I am, of course, being deliberately provocative. I know exactly why there were complaints. It was because Northern Rock appeared to have become over-eager in repossessing properties.
But think. Politicians cannot have things both ways.
They cannot order Northern Rock to trade competitively in a fashion that refunds the public - then say: but we didn't mean that style of behaviour. No interference means no interference.
And back to HBOS. If the driver of reform in the banking system is competition, then why sanction a move which is explicitly anti-competitive: where competition rules have had to be suspended?
Again, I know the answer which is offered: that HBOS required rescue, not merely recapitalisation; that HBOS was in peril; that the merger is vital for the survival of the bank.
Good answers all - although others dispute that case. The verdict upon these arguments will be delivered by shareholders in the two banks. It would still appear at this stage that merger will go ahead.
However, in the by-going, perhaps we might be spared the pleas for greater competition in the banking sector.
UPDATE, 3:00pm:
Further re HBOS. As my colleague Robert Peston has already noted, the Chancellor has issued a statement pour encourager les autres: those others, that is, who feel that the HBOS take-over is not the final word.
Alistair Darling notes that there is "no automatic right of access" to the recapitalisation scheme.
To be fair, he never said that HBOS would definitely gain full-scale recapitalisation if the merger fell through.
He said, as I understand it, that any recapitalisation would require to be rethought in the light of the new circumstances.
In other words, recapitalisation is not solely predicated upon merger - but the current offer is calculated upon such a deal.
Today we learned more about how the Chancellor might redo his sums.
As you might guess, they would not be to the advantage of HBOS. Any capital to be injected into HBOS would be considerably more expensive.
Plus the likely outcome, according to the Treasury and the bank itself, would be effective nationalisation. Not something the bank wants.
Hence Lloyds TSB shareholders will be asked to endorse the deal tomorrow, with HBOS following a month later.
A little like the scenario which surrounded devolution in 1997 - when the eager Scots were asked to vote first while the referendum in sceptical Wales was deferred.
I'm 
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