When Northern Rock was in financial trouble a while ago, many business commentators wanted the government to nationalise the bank to prevent it from going under. Now we hear that it’s back in trouble again.
The bank’s losses since nationalisation has risen from £585million in 2008 to £724million now, an increase of 24 per cent… and its you and me, the taxpayers of the entire country, who are subsidising the losses. Why? No doubt the BBC’s Robert Peston will get his collective knickers in a twist over this.
As I have posted previously, I opposed the bailing out of our major banks on principle. No bank, like any business, has any right to survive (just ask the guys at Setanta), yet the government effectively caved in to their demands. Despite the fact that Northern Rock and several other banks received substantial amounts of public money, a lot of it was allegedly used to start paying bonuses to their senior management again. It seems that many of them have reverted to their old ways, and as usual, the government, particularly the hapless Chancellor Alistair Darling, has been repeatedly been caught on the hop.
If those in the government were really brave, which they weren’t at the time…. and still aren’t… they would have allowed Northern Rock to go under in the first place. That would’ve saved us a hell of a lot of money in the long run.