Shameless Tories take step too far with dodgy housing wheeze

Equally shameless bankers stooped to blackmail as they tried to wriggle away from a wave of criticism - even from governor of the Bank of England Sir Mervyn King.

Prime Minister David Cameron unveiled the so-called NewBuy Guarantee, designed to give would-be homebuyers access to mortgages even if they have only a 5 per cent deposit.

Developers would contribute 3.5 per cent of the purchase price while the government - that is, the taxpayer - guarantees 5.5 per cent.

That public money would be at risk if buyers defaulted.

The scheme is available on flats and houses up to a maximum value of £500,000 in England.

Critics said it was a "gimmick" helping construction companies rather than homebuyers and they're worried borrowers saddled with massive loans would be vulnerable if interest rates rose, as they're beginning to.

But direct investment for building projects, which would kick-start the economy, was not forthcoming.

With rank-and-file anger mounting, worried Mr Cameron has also resurrected Thatcher's discredited old dodge to stop dissent by dangling up to £75,000 discounts on the "right-to-buy" council houses.

The idea is that workers with big mortgages won't go on strike and defend their working rights.

And Mr King launched an astonishing attack on banks in the Times newspaper, claiming they were still in denial about public anger over their behaviour.

He said people's anger was "very real and wholly understandable."

Mr King added: "I think it is because (the banks) found it very, very difficult to face up to their failure of their banking model."

Immediately the fat-cat bonus-baggers hit back warning - or rather blackmailing - they'll move abroad unless a less "hostile" successor to Mr King is appointed when his term ends next year.

Rail union RMT general secretary Bob Crow said: "This is not the first time that the senior bankers have threatened to cut and run if the Bank of England and the government don't cave in to their demands.

"If the trade unions threatened industrial action in this way without a ballot we would be hauled before the courts and our funds sequestrated.

"The bankers snap their fingers and billions more in quantitative easing and bailouts is sent their way by return."

Snivelling bankers also got a reality check from bosses' union Federation of Small Businesses, which said one in five smaller firms are facing a "major barrier" to growth because bankers were keeping cash to their chests.

This came less than a week after government figures warned Britain's banks were turning down more than one in three small businesses loans.