Getting out in time
Are you sure we'll get our money back, Darling?
"His job is on the line". So said the Tory shadow chancellor, George Osborne, with menace today. He will keep reminding Alastair Darling of his pledge in Parliament to ensure that taxpayers get their money after the Northern Rock saga finally comes to an end.
It's a puzzling story this for those of us not steeped in the ways of the City. On the one hand ministers assert that the huge loan given to prop up the Rock - worth £900 for each and every one of us (the Lib Dems have helpfully calculated) - is easily covered by £100bn of assets. On the other we're told that, in truth, there's nothing like that much money and, besides, the interest on the loan - amounting to at least hundreds of millions of pounds - may not be repaid (my colleague Robert Peston's blog is the place to go for the detail).
Vince Cable of the Lib Dems says the only way to protect our cash is nationalisation. The Tories are backing attempts to find a buyer. Alastair Darling is in a very uncomfortable place:
• unwilling to rule any option in or out for fear of prejudicing the process
• aware that predators are circling waiting to pick the meat off the bones of Northern Rock leaving the government with just the gristle
• aware too that small shareholders, employees and those with the north east's interests at heart are watching too
• and facing warnings not to do another Railtrack - in other words to take decisions that produce legal action down the line
Besides that we now have predictions of the slowest economic growth in 15 years. Gordon got out just in time.
I'm 
Comments
"£900 for each and every one of us" is wrong Nick.
The LibDems have calculated that it is some £400 for each and every one of us, £900 for each taxpayer.
Sloppy Nick, tsk, tsk.
I certainly wouldn't want to be in Gordon Brown's* position over this.
I have no investment in Northern Rock but I can understand why its important for the government to bail them out.
Northern Rock is one of the largest financial companies in Britain, so it's vital (particularly when the economy is slowing) to safeguard their interests.
I'm sure George Osborne would face the same dilemma as Mr. Brown in this situation.
* - man who really runs the Treasury.
I can agree that Gordon got out just in time - because we need someone decisive in charge of this.
Let's hope Darling will rule out the two worst options - providing state aid, and nationalisation.
Whatever EU rules might allow the government to do or not do, we should neither subsidise nor nationalise NR because it would set a terrible precedent in the UK (and in Europe).
Stop further loans, set a deadline for repayment of the £24B, & let the private sector operate under clear rules.
Nick said: "Gordon got out just in time"
Excuse me? Who has been running the show for the last 10 years? Darling's only been in the job for 6 months - all these problems are of Gordon's own making.
For years he has cleaned out the piggy-banks, robbed Peter to pay Paul. cashed in the savings and now the financial cupboard is empty.
For business, he's taxed until the pips squeak and the government in which he was number two has passed all sorts of bureaucratic legislation that is silting up the economy.
Look at tax credits - they take money off you, means test you, pass it round through half a dozen government bureacracies and then give it back to you! Hello is Mr Sanity in? Would it not be simpler not to take the money in the first place?
The pigeons are really coming home to roost, and not before time.
Nick,
are you suggesting that Gordon has had no hand in pouring billions of pounds of our cash into Northern Rocks "black hole"?
My worry is the precedent the Northern Rock incident sets. Will every bank that has made bad calls in the past get the same assurance? If not, why the Rock and - say - Barclays which has had recent losses also due to dabbling in the same silly game of covering US sub-prime debt? If I were on Barclays Board I'd be saying, 'Hang on, what about us...?'
"Gordon got out just in time."
What?Who is the Prime Minister?If the economy goes badly, who will get most of the blame?"There are two types of those who fail and those who get out in time."He forgot one, those who become PM and inherit the mess they have done in the Treasury
I don't think it's fair to say Gordon got out just in time. Ask people on the street who the Chancellor is and although they immediately correct themselves the first person they think of is still Gordon Brown.
In the Asian financial crisis of 1998, when the capital markets were paralysed, South Korea took this kind of action on three major banks and thereby saved them. Its economy come back on stream shortly thereafter. Sadly though, it's decisive action, and that doesn't really seem to be developing as Gordon Brown's strong point.
An Albatross of gigantic proportions
NR is bust. Kaput. Bankrupt. Tough on the shareholders. They gambled and lost.
Or so the story should be
But Greedy Gordon built his entire reputation on debt. Your debt. Your kids debt. Your grand children's (and probably your great grand children's) debt
I met an apparently intelligent woman a few weeks ago. I say apparently because she said she thought Brown is shifty as a PM but she trusted him with her money.
Sadly, it will take a few more years for the voters to realise just how much their futures have been destroyed by Brown and the Bankers in a frenzy of short term debt.
Aw, come on nick. The current economic indicators are a direct reflection of decisions taken over the last 2-3 years. Therefore any economic crash has Brown and Blair's fingerprints all over it. As for Brown getting out just in time, that is pure, class A baloney. Are you seriously trying to suggest that Gordon is not controlling the economic levers of Government? Since when has he dumped that serious personality flaw? He is more in control than ever before. He has gutted and taken the power from the treasury into No 10 with him and he cannot escape, nor pass the buck on the economy AT ALL! He controls more of the levers of Government than any prime minister since Churchill. One could say that he is now Prime Minister and acting Chancellor at the same time. If the Northern Rock crisis should lead to ministerial resignations, then Mr Brown should be the first to go.
This whole saga has been handled atrociously.
Brown has not got out in time because the media and the public rightly consider Darling to be a mere representative of the PM's at the Treasury.
The real concern here is the dangerous precedent that has been set. Every bank that gets into trouble will expect government support and every saver will expect their deposits to be fully covered by the tax payer.
This whole saga has been handled atrociously.
Brown has not got out in time because the media and the public rightly consider Darling to be a mere representative of the PM's at the Treasury.
The real concern here is the dangerous precedent that has been set. Every bank that gets into trouble will expect government support and every saver will expect their deposits to be fully covered by the tax payer.
"aware too that small shareholders, employees and those with the north east's interests at heart are watching too" ... I assume you mean the Labour party with whom NR have been very cosy in the past ...(Guido passim)
Darling committed to underwtite all the depositors of Northern Rock without qualification as to the length of the support period. He did this to protect internationally the reputation of UK financial institutions. To withdraw support before the NR is sorted out would now result in loss of reputation for Britain in financial markets, ridicule for the Government and financial loss to the depositors.
Darling's real mistake is not to acted earlier - but then he has never been an Action Man!
"Gordon got out just in time". Come on Nick, what a ridiculous thing to say. He's been responsible for this whole debt fuelled binge the UK's been on for the last 10 years, and it's now the chickens are coming home to roost. And on Northern Rock specifically, does anyone other than you actually believe Darling is pulling his own strings?
man with keyboard is correct about Greedy Gordon still running the Treasury but I humbly submit he is wrong about Osborne facing the same problem.
Osborne understands the city and finance. Brown doesn't. So the City took him to the cleaners. GB failed to spot or regulate every abuse of the debt merchants
and even if NR folded because of its dangerous policy (yes, it was well known how exposed it was. Sue any broker who sold you the stock on advice), Osborne knows it is the market at work. Remember Poly Peck, B&C, BCCI and many more.
Let them go bust. It will hurt. Badly. But not as much as inflating the bubble further.
Dear Nick,
Lovely to dream is it not.This whole sordid affair is going to end intears, talk about rats leaving a sinking ship, there will be no option shortly to see the bank either go Bust, or be natioanlised, into the bank of England.
Gordon Brown, certainly has,
DARLING BY THE YOU KNOW WHAT.IT WILL BE ACASE OF TWO BRICKS SHORTLY
This whole saga has been handled atrociously.
Brown has not got out in time because the media and the public rightly consider Darling to be a mere representative of the PM's at the Treasury.
The real concern here is the dangerous precedent that has been set. Every bank that gets into trouble will expect government support and every saver will expect their deposits to be fully covered by the tax payer.
p.s. I don't know about anyone else but I keep getting "server error" when posting.
Where's Shriti Vedera the PM's special advisor to help out with Northern Rock?
Aftrer all, it was Shriti who declared the Shareholders of Railtrack to be 'old grannies' shortly before it went bust.
Are we now to see the same fate for the Rock?
As you will see from this thread "Gordon got out just in time" is about as fatuous a comment that you have ever penned. Try it on the News tonight and you'll have the whole country rolling in the aisles.
All those decisions that dear prudent Gordon made over the last few years are coming back to haunt him as PM.He is the master controller of his cabinet of muppets and there is no wher for him to run.He will try to say that it is either the Bank of Englands or the FSA's fault,but he was the one who made the system they work under--so the buck stops with him.We as taxpayers will have to pay the price for all his bad management.
'Gordon got out in time' is a statement of fact.
He did get out of the Treasury.
But the English public, know that his Ministers cannot fart without permission, so he will be indelibly linked in their minds to the Chancellors job.
I don't see much point in playing a blame game now.
The choice is to hand over Northern Rock to vultures like Richard Branson or nationalise the bank, and put it into 'run-off'.
Darling can get out of trouble quite easily - sell off our gold reserves.
Oooops - sorry - seems GB already has!!!
Safe pair of hands!!!! hahahahahahahaha
Gordon Brown sold himself as the Iron Chancellor, but the truth is that he was just lucky. He operated for 10 years in very benign conditions - not of his making. He even inherited a strong and growing economy. The future looks much more stormy in world economics and Gordon will shoulder the blame even though he is now next door at number 10. The one thing that he was given credit for, even by his critics, was Bank of England independence. Sadly, that reform was shown up for the sham it was at the first real examination - Northern Rock. He is full of bluster, but he is increasingly looking to many people like yesterday's man, and with all the pidgeons now coming home to roost, he will soon resemble one of the many statues in Parliament Square - covered in their droppings.
Am I the only one who realises the reference to Gordon "getting out in time" is [b]ironic[/b]?
A reference to the fact that Gordon [i]technically[/i] kept a clean sheet as Chancellor of so many successive quarters of growth that will secure his place in the records.
But that his actions ultimately shaped this mess. And that, seeing this on the horizon, he happily let TB get forced into an early leaving date so his "record" as Chancellor would technically be unblemished.
It's a cynical comment people. Invest in an irony-detector!
What's wrong with nationalising Northern Rock? There was a time when many of our institutions were publicly owned. There would be nothing to stop the government selling it off when it was back in profit. Otherwise tax payer's money is going to be syphoned off by the speculators and the unscrupulously types who caused the problem in the first place.
"Osborne understands the city and finance" - of course - he spent a year working in PR before securing a cushy job as a researcher in the Tory Pary - trust him with my money - I don't think so.
All those pleading Labour MP's in the House of Commons today,pleading on behalf of the 6000 Norhtern Rock employees.
Never mind £900 for every person in the UK,forget the Shareholders,forget the Pension Funds
Much easier to understand the bail out works out at :-
£4,000,000 or £4 MILLION QUID FOR EVERY NORTHERN ROCK EMPLOYEE !!!!!
"UP THE TOON "
"Gordon got out just in time" - in his dreams! The country at large knows who pulls the strings at the Treasury. The only autonomy Darling has is over his eyebrows (and even then I'm not so sure).