So, after months of dithering, Chancellor Alistair Darling, against the advice of many commentators, decides to nationalise (or bring into public ownership) the troubled Northern Rock bank. What a p***k.
Not since the war in Iraq has such a decision turned virtually everybody, from shareholders to commentators, and from savers to the bank’s suffering staff and even some rebel memebers of the Labour party against the government.
The nationalisation means that all those who savings in the bank will lose all their money immediately, with very little hope of getting it back in the future. The government will continue bailing out the bank for as long as necessary, despite the fact that there were still two bidders wanting to take it on as a going concern.
There’s going to be several storms ahead. Many of the bank’s shareholders are threatening to take the government to court in order to recover their lost investments. The European Union may also block the bank’s nationalisation. Bank staff are increasingly worried about any potential job cuts. These and many others are turning this crisis into a political nightmare….. and one which could cost Darling his job, and Labour could lose the next general election.
More analysis:
Darling Under fire as Northern Rock is nationalised: The Guardian
State will be running Northern Rock for years: The Times
Northern Rock, owned by UK Ltd: The Independent
One of the few dissenters in this growing scandal came from Martin Kettle in the Guardian, defending the hapless chancellor. I agree, to an extent. As I have mentioned before on this blog, here, and here, the government shouldn’t be paying out billions in taxpayers’ money….. money needed for public services…. to bail out a private business. The decision to nationalise Northern Rock will turn out to be a complete disaster.
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