MANY people will wonder whether the Government’s deal with the nation’s biggest banks will do anything to rein in the organisations that are most responsible for Britain’s dire economic state.

Chancellor George Osborne says the deal with Barclays, Lloyds, RBS and HSBC means lower bonuses, more transparency, increased lending to small businesses, and extra cash for the regional economy.

All of which, on the surface, sounds very welcome but the devil is in the detail.

The total bonus pot might be smaller but the potential benefit to bank bosses is enormous.

That is because cash bonuses have been restricted to a maximum of £2,000 with the men at the top of Britain’s banks getting their bonuses in shares.

RBS chief executive Stephen Hester gets just over £2 million in shares while his counterpart at Lloyds Eric Daniels will benefit by £1.4 million.

To suggest this is some kind of a crackdown on fat cat bankers is nonsense. RBS and Lloyds are both funded largely by the taxpayer.

When they eventually return to private ownership there will almost certainly be a surge in their share price – meaning the likes of Hester and Daniels are sitting on a fortune.

The increase in lending to small businesses is welcome but does not take account of the level of repayments demanded of firms, an element at least as crucial as the credit facilities themselves.

We would like to see less agreement and more instruction from the Government to the banks – particularly those that have been bailed out by the State.

But we doubt any government will have the guts to really take on the banks.

Mr Osborne’s deal lacks a little in credibility – but it certainly displays more than his Labour opponents.

The last government effectively stood by and watched the banks cripple the economy and in opposition they are in no position to criticise.