There have been reports that the government is planning to push emergency legislation in parliament to effectively take over- or nationalise- the troubled Northern Rock bank.
The bank fell into trouble when its shares fell over claims about its financial health. Stupidly, the government got itself involved in the crisis by guaranteeing to spend billions of pounds in taxpayers’ money to keep it afloat.
Prime Minister Gordon Brown was criticised over the government’s role in the crisis in parliament. Opposition Conservative leader David Cameron claimed that he was advised to sell the bank long ago, but had delayed it because he was planning “the general election that never was”. Brown replied that it was their intension to get the taxpayers’ money back from any potential sale of the bank… however, judging from their record in such matters (remember Railtrack, anybody), that may be wishful thinking.
Let’s get one thing straight. The crisis at Northern Rock was created by poor decisions from senior management, not by government policy. They are getting away with murder while the government gets a public mauling from shareholders, commentators and the public. The government meanwhile is trying to save face to saying it’s doing all it can to save a business that was run into the ground a few months ago.
The government must not start flogging a dead horse by bailing Northern Rock out. Barring a last-minute miracle, the bank is gone. It should be left to die a decent death…..