Martin Vander Weyer

A ‘triple dip’ sounds like a move that might defeat a drug-pumped Olympic gymnast, but it’s what some City pundits now expect the UK economy to perform. After a 0.7 per cent drop in GDP between April and June — the third consecutive quarter of the double-dip recession — a ‘technical bounce’ should make the rest of the year look relatively healthy. But continuing chaos in the eurozone combined with a stalled US recovery, a slowdown in China and whatever happens next in the vicinity of Iran and Syria could make everything go pear-shaped again in 2013.

Hail to the Co-operative Bank, which has snapped up the 632 branches that Lloyds was under orders from Brussels to shed by next year. The price looks like a buy-one-get-one-free sofa sale: £350 million down with £400 million to pay over 15 years ‘if targets are met’, against Lloyds’ initial expectation of £1.5 billion-plus. That’s hardly a joy for taxpayers who own 40 per cent of Lloyds, but it triples the size of the Co-op branch network — a boost to banking biodiversity that must surely be positive for the high-street economy. One good thing about the Co-op is that it is based in Manchester, far from the taint and corruption of the City of London.

The biggest mis-selling scandal to break this month was not the one which involved banks forcing small business borrowers to buy expensive interest-rate hedging contracts, under threat of not lending to them at all if they refused. The FSA hasn’t got to the bottom of that one yet: in terms of identifiable victims it could be at least as damaging to the reputation of the banks as the Libor scam. But it is dwarfed by goings-on in the pharmaceuticals giant GlaxoSmithKline, which has been fined $3 billion by the US Department of Justice for a set of offences that deserved much bigger headlines than they got in a week which was unusually good for burying bad news.

The great NatWest-RBS computer cock-up has upstaged my personal campaign to expose the lamentable standards of service offered by high-street banks. I was relieved not to find 12 million emails in my inbox from all those whose wages have not been paid or whose house purchases have been held up, and now have to chase compensation through the same dysfunctional maze that was at fault in the first place. RBS chief Stephen Hester’s lame attempt to compare the continuing chaos to a stack of planes waiting to land safely after a spot of bother in the airport, inadvertently conjuring up the mayhem of Die Hard 2, was the last straw. Where’s Bruce Willis with a machine-gun when you need him?  Meanwhile, readers have kept the anecdotes of incompetence flowing.

‘Greeks choose austerity over chaos,’ said a typical headline on Monday morning. But in truth the argument for austerity is pretty much lost, and we might as well move on to the argument about in­equality — and related arguments about volatility, more of which below. While anti-austerity socialists secured a majority in the French parliament, the pro-austerity New Democracy party limped home in the re-run Greek general election — but with less than 30 per cent of the poll.

‘Whan that Aprill with his shoures soote/ The droghte of March hath perced to the roote,’ wrote Geoffrey Chaucer, long before scientists realised that wind turbines cause climate change by raising night air temperatures. If Chaucer’s General Prologue to The Canterbury Tales gave us pungent insights into late 14th-century English life, then its modern equivalent is surely the 2011 annual report of Anglian Water, whose operatives are currently busy replacing all those hosepipe-ban warning posters that have been washed away by torrential rain. I note, for example, that on turnover of £1.

If we are happy to venerate a Palestinian patron saint — it occurred to me, as I composed these thoughts on St George’s Day — then we can’t really object to a foreign governor of the Bank of England. The idea may offend the self-esteem of indigenous bankers, but that’s the way the betting has moved since last week’s revelation in the Financial Times that ‘an informal approach by a member of the Bank of England’s Court’ had been made to Bank of Canada governor and former Goldman Sachs executive Mark Carney as a potential candidate to succeed Sir Mervyn King next June.

You wouldn’t thank me for filling this column with arithmetic, but the way in which the government has sought to defend George Osborne’s proposed tax-relief cap for charity donations, and the way most broadcasters have tried to challenge it, has displayed woeful if not wilful ignorance of the tax maths involved. It’s as though ministers have been instructed by Downing Street on no account to consult the easy-to-follow section of the HMRC website headed ‘Giving to Charity: Individuals’ lest it deter them from parroting the line about the iniquity of the super-rich minimising their tax rates by exploiting reliefs.

Should Bob Diamond of Barclays be paid a whole lot more than Stephen Hester of RBS, António Horta Osório of Lloyds or Stuart Gulliver of HSBC? Arguably he should, for reasons I’ll try to explain, but a group of institutions including Standard Life, Fidelity and Scottish Widows intend to vote against his £17.7 million haul for 2011 at the bank’s AGM in two weeks’ time, and one influential voice, Pensions & Investment Research Consultants, says performance has been so poor that Diamond deserves no bonus at all, ‘indeed the board should be considering clawbacks’. It’s true that Barclays’ share price stands 20 per cent below where it was when he took the helm in 2011, its dividends are pathetic, and the £5.

This week marks the 20th ­anniversary of John Major’s election victory and my debut in The Spectator. The two events were connected: going to press on the eve of a close poll, the editor needed one more non-political feature — and pulled my essay on the follies of the 1980s City out of the pile of unsolicited submissions. In it I observed that the ‘great blaze of swaggering hubris’ which characterised bankers’ boom-time behaviour had given way to grimmer times. The archetypal financier was no longer swanning round the world in first-class luxury but, ‘if he still had a job at all, stuck at Frankfurt... with an economy ticket, a ham roll and a bout of flu’.

As lead balloons go, last week’s Budget went down faster than James Cameron’s submersible in the Mariana Trench. The closer the small-print scrutiny afterwards, the worse it got. The pro-business measures were hardly sufficient to justify the claim that ‘this Budget unashamedly backs business’ — certainly no small businessman I met that evening, when I found myself addressing 300 of them, felt either backed or bucked by it. The ‘granny tax’ caught far more media attention than the claim that ‘24 million people earning less than £100,000 a year will gain’ from the increase in the income tax personal allowance to £9,205.

‘The faster the government starts selling its stake, the better for everyone,’ RBS chief Stephen Hester told the British Chambers of Commerce conference last week. In doing so, he opened up what may become the hottest financial debate after the Budget hoo-hah has died down: when and how should the government’s holding company, UK Financial Investments, start disposing of its 82 per cent stake in RBS and its 41 per cent stake in Lloyds? In the case of RBS, the government bought in at an average share price close to 50 pence against a market level of 29 pence today, and at least one more year of losses is expected before the bank begins to look relatively healthy again.

I wrote here in November that ‘history may judge the HBOS men to have been the worst of the lot’, and the FSA, in its grindingly slow, bureacratic way, is finally about to catch up with them. The regulator has at last issued a ‘Final Notice’ to the Bank of Scotland arm of HBOS to the effect that its Corporate Banking Division, under the now comfortably retired Peter Cummings, ‘failed to take reasonable care to ensure that [it] adequately and prudently managed high value transactions which showed signs of stress’. In fact — I paraphrase — it seems to have taken no care at all, tearing up the banking textbooks as it piled on lending to the commercial property sector and took equity stakes in many of the deals as well.

In my early twenties I spent memorable holidays crewing on a yacht in the Mediterranean. One afternoon we were entering the creek-like port of Ciudadella in Menorca when we realised that a departing car ferry was heading straight for us, gathering speed. Our entire crew, including me, began hollering uselessly and pleading with the youthful helmsman to take evasive action, while nearby fishermen gesticulated wildly, possibly to suggest that we throw ourselves overboard and swim for it. But our helmsman, wise beyond his years, ordered us to shut up. ‘I have chosen my course,’ he announced calmly, ‘and I intend to hold it.’ So he did, and we passed under the bows of the ferry into the calm of the inner harbour.