For UK plc, I have an unmissable business proposition. How would you like the Government to stand behind and guarantee your every liability? Say a big client goes bust owing you money? Bad credit card debts? Any of those little uncertainties to which business is prone...

This is the deal that the mortgage lenders are pushing on the Government and over which the Crosby report on mortgage finance has concerns.

The present special liquidity scheme, which allows banks to swap mortgage-backed securities that existed before the end of last year with Treasury bills, so pumping more cash into the system for new borrowers, should be extended to cover all home loans, new and old, they say.

There are various problems with this. For one, banks still have a supply of old, and presumably viable, mortgage securities as yet not swapped under the scheme, which could provide extra liquidity.

Two, a near-criminal lack of caution with new mortgage applications helped to bring us to this current pass. Should further recklessness to new borrowers be underwritten by the public finances?

Three, how genuine is the shortage of mortgage funds? New mortgage lending is at an eight-year low, according to the Bank of England. Indeed. New borrowers are unwilling to over-extend themselves against a background of falling house prices. Homeowners are unwilling to move house and sell against, ditto.

The comparable figures contained any amount of daft 125 per cent offers, get-rich-quick buy-to-let borrowing and other reckless sludge that now have, for the best of reasons, evaporated.

Finally, banks are being very careful indeed lending to borrowers with dubious and unproven credit records. As I said, one reason why we are where we are is because they weren't.

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