Heads, it seems, are securely stuck in the sand at the British Bankers’ Association (BBA). After a year in which the banking industry has come under intense scrutiny and no little criticism, Angela Knight, the BBA’s chief executive, used the organisation’s annual report, published last week, to congratulate her members on their performance.

I almost choked on my tea when I read Ms Knight praising the banks for their “transparent” services. I can only imagine that nobody has told Ms Knight, who is new to the job, that her members employ every trick in the book to disguise the true cost of almost every financial product that they sell.

Is she not aware that until this week her beloved banks have refused to reveal in court how they work out the cost of their excessive and disproportionate overdraft penalty fees? Or that lenders have been criticised by the Office of Fair Trading for bamboozling consumers into taking out expensive and unnecessary payment protection insurance? Or that mortgage lenders use hidden fees deceptively to lower headline rates of interest on home loans? Or that credit card companies use interest calculations so fiendishly complex that even experts are stumped? I could go on, but you get the point.

The fact is that the banks’ charging structures are about as transparent as the muddy floodwaters that have caused so much havoc this week. It is disingenuous to claim otherwise.

Ms Knight also lauded the industry’s generosity, pointing out proudly that large UK banks provide more than £100 million a year to charities and community initiatives. Sounds impressive. Until you compare this figure to profits. The big five banking groups of Barclays, HSBC, RBS, Lloyds TSB and HBOS generated earnings of almost £38 billion last year. Giving away £100 million of this is the equivalent of someone earning £25,000 a year donating just £5.50 a month to charity, hardly something to brag about.

The final insult was Ms Knight’s line about how the banks also offer great “value for money”. I’ll try to remember that the next time I am charged £84 for going £9 over my overdraft limit.

A chastened Revenue? Is that a pig flying past the window?

Congratulations to Geoff and Diana Jones. For the past four years, this honest and hard-working couple from West Sussex have fought a brave and determined battle against an intransigent Revenue & Customs. Despite legal and financial setbacks – including nearly losing their home – the pair finally and decisively won their case when the House of Lords ruled in their favour this week.

The Law Lords concluded that the couple, who jointly owned their IT consultancy, Arctic Systems, were perfectly entitled to draw a small salary each and a pay themselves a much larger dividend to make the best use of their tax allowances and minimise their tax bill. Cue a chastened and contrite Revenue & Customs? Pigs might fly. Within hours of losing the case, the Treasury petulantly announced that it would change the law to stop couples enjoying this “unfair advantage”. Of course, the Government is entitled to stifle enterprise by hiking taxes on small businesses – if it is prepared to accept the electoral and economic consquences – but the handling of the whole affair stinks.

The Revenue was clearly encouraged to pursue the case so that the Government could introduce an unpopular tax increase through the back door. The hounding of the Joneses was perverse to the point of vindictive. By refusing to accept that it was a test case, the Revenue didn’t have to pay costs, nearly bankrupting the couple. It must have mistakenly believed it could bully them into submission. There also remain questions over how the proposed legislation to close this so-called loophole will work in practice. Not least how a husband might calulate the share of a family company that rightfully can be assigned to his wife.

The whole episode is further proof, if any were needed, that the taxman has adopted an ultra-aggressive approach that considers legitimate ways of minimising tax akin to avoidance. The Revenue is fond of describing taxpayers as its “customers”, but if any company treated its patrons in this way, it would quickly go out of business.

Floods leave a torrent of fear that premiums will soar

Scenes of people being rescued from their cars and homes after becoming stranded by huge volumes of floodwater is becoming as common a feature of the British summer as tennis at Wimbledon or cricket at Lord’s.

In 2005 this forced insurers to strike a deal with the Government, in which they promised to continue affordable cover in high-risk areas on the condition that flood defences were maintained and improved. Worryingly, this deal is due to be reassessed next year.

As we report on page 12, if a new agreement isn’t reached, flood-prone homes will become effectively uninsurable. This will have far-reaching social and economic consequences, from plummeting house prices to homes being left damp and devoid of goods.

It is vital that the Government and insurers understand and meet their responsibilities. Ministers have pledged money to improve flood defences but now they must deliver. Contracts must be signed and work started. Meanwhile, insurers must realise that it’s their job to pool risks so that all members of society can reasonably afford cover if they want it.

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