Today it has been announced that in order to satisfy competition rules Royal Bank of Scotland and Lloyds TSB are to be split  – my immediate thought was great bring back Williams & Glyns, and the Trustees Savings Bank!

However, whilst it may not be to difficult to appreciate the need to split these banks up, it will be difficult for Joe Public to swallow the extra £30Billion needed for the exercise.

At a time when most people are feeling the economic squeeze and political parties are falling over each other to promise greater public spending cuts, another handout to these failed institutions will I suspect be nigh on impossible to explain let alone justify.

I am also growing increasingly concerned that the great British public will end up with the dodgy end of the stick with this whole affair. Lets face it it’s Ok to split banks up and sell off branches etc, but any new business created or business hived off will have to be from the more profitable sections of these 2 banking giants to be an attractive proposition. So what will be left, and will that mean a longer term investment and further bail-outs from the UK Government? 

This Labour Government needs to tread very carefully here. They are playing with the future of the British economy with these financial initiatives. But maybe they’re thinking they won’t be there to pick up the pieces after next May.