When the brilliant Bob Monkhouse told friends he wanted to be a comedian, they laughed. “Well,” as he put it later, “they’re not laughing now.” When the pension funds and insurance companies eagerly snapped up 55-year UK government debt paying 3.5 per cent two years ago, some of us laughed at this triumph of hope over experience. Well, we’re not laughing now. That stock has risen by 30 per cent, and as if to make the point, HMG has this week sold a slug of fresh 50-year debt paying just 2.5 per cent. If it seemed cheap money last time, it looks almost free now.

Whether or not this is the new normal, the price of the issue highlights the bizarre spectacle of a government able to borrow cheaply for half a century while desperately bribing the Chinese into putting up capital for British domestic projects. As all the world knows, the £25bn Hinkley Point nuclear power station is a grade one white elephant, but if it were to be financed at 2.5 per cent, it might even turn a profit inside the next 50 years. Instead, there’s a stealth government guarantee the pay for its output – at the equivalent to $150 a barrel oil, reckons Deutsche Bank – to disguise the fact that the taxpayer is bearing the same liability as with the bond issue.

There are hundreds of relatively small infrastructure projects that produce an excellent return to the state when long-term capital costs it 2.5 per cent: road widening, rail junction upgrades, hospital and school extensions, internet access, flood controls, combined cycle gas plants…the list goes on. Instead the government is pretending that it will balance the books (it won’t), kowtowing to the Chinese to find the capital for nuclear power, and wasting billions on vainglorious projects like HS2. It’s no laughing matter, as Mr Monkhouse might have said.

Freedom from banks, one day

More bad news for the banks. The Competition and Markets Authority has sensibly decided that it would be madness to outlaw free banking. As the banks keep telling us, it’s not free, but shockingly expensive, costing customers £8bn a year according to the TSB. Odd that. It certainly looks free to those who stay in credit and don’t incur any charges.

No bank is obliged to offer free-in-credit banking, any more than coffee shops are obliged to offer free wi-fi, but they all know what would happen if one broke ranks and charged. The banks argue that ending this free banking would lead to lower charges on services like overdrafts which currently subsidise it, but if you believe that, you’re obviously not a banker.

A more serious grouse, from the “challenger” banks which are trying to prise us away from the “too big to fail” banks is their exclusion from the payments system. The big boys argue that since they set it up, they should decide who is in the club, but this looks thin considering how many have had to be rescued by one sovereign state or another, and the value of their implicit guarantee from the taxpayer.

Eventually, technology will make much of the argument academic. Paypal and Apple Pay are nibbling at money transmission, while a blockchain – a sort of diffused recording and self-checking mechanism for every payment made – would make the clearing system redundant. Until then, stay out of the red – and stay free.

That’s what I call a deep mine

And now, a rights issue where everyone will have to earn the fees. Lonmin is a sad shadow of the platinum miner it once was, and this week softened up the market with plans to raise $400m in new equity. With the shares at 30p, the company has an existing market value of £170m, so there will be plenty who will say that it can’t be done, despite the support of the South African state pension fund. For what it’s worth, an issue of four-for-one at 11.5p each would just about do it. Once upon a time, Lonmin shares cost £40 apiece and the stock was in the FTSE 100. The principal fee-gatherers are Greenhill, JP Morgan and HSBC. Best of luck, boys.

This is my FT column from Saturday

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