Sifting through the Northern Wreckage
James Forsyth 9:22am
Perhaps, the greatest political danger for the government from yesterday’s nationalisation of Northern Rock is that it fits so neatly into the narrative of a government that is incapable of making a decision. On The Today Programme this morning, Alistair Darling was repeatedly pressed on the question of why this step was not taken earlier and had no adequate answer.
Darling’s performance this morning revealed just how vulnerable the government is over Northern Rock. The Chancellor could not parry the charge that allowing then bank to continue doing business even now it is nationalised is unfair competition. Anatole Kaletsky rips into this decision in The Times today:
“To use nationalisation to keep the bank in business and its staff in state-subsidised employment would be a travesty of all the economic principles that “new” Labour has claimed to believe in. It would represent a grossly unfair distortion of Britain's banking business and would make a mockery of all the arguments Mr Brown has vociferously advanced in Brussels against state subsidies and protectionism elsewhere in Europe. Worst of all, the provision of £100 billion of state guarantees to a grossly mismanaged and insolvent mortgage bank would be a gross insult to the hundreds of thousands of workers in businesses from coal, steel and textiles to performance cars and advanced electronics whose jobs could have been saved with Government guarantees or “temporary” nationalisations costing one-tenth or even one-hundredth of the £100 billion that the Government is now devoting to just 6,000 jobs at Northern Rock..”It is hard not to agree with Kaletsky’s conclusion that “what Mr Darling announced yesterday was a financial and political disaster of almost unimaginable proportions. The Northern Rock saga did not end yesterday; the fiasco has only just started, with the Government now officially in charge.”
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Vincenzo Rampulla
February 18th, 2008 10:56am Report this commentWow, James...I almost felt the flecks of venom hit my face as I read that. These charges of 'dithering' just don't stick. There is nothing wrong with exploring all the possibilities and then, when choices are clear, making the right choice. Unless you're saying that Nationalisation was inevitable, then I don't see what your argument is. Would you have rather taken the Tory line of running the company down, with all the taxpayers money that is in play?! Run at arms length, run commercially, business as usual and a limited (though sensible) period of nationalisation. Doesn't sound too bad to me. Tories should stop trying to find a narrative to this, stop trying to sloganise it and just get on with whatever it is they do... P.S How about a post on the new Tory tax review (dither, dither, dither) http://news.bbc.co.uk/1/hi/uk_politics/7245711.stm
Tiberius
February 18th, 2008 11:39am Report this commentInteresting riposte, VR, except it ignores the fact that hundreds of smaller enterprises could have been saved at a much smaller cost, and that in business, there are times (and this is one) where exploring alternatives over months is not an option. I have no private financial interest in NR, and I resent having a family exposure of £7,000 for...what? Saving the Government's reputation and keeping the Labour heartland in the North East from waving its fist in the air? The taxpayer will not recover its investment in NR, and this government, more than any other, will make a right pigs-ear of trying to run this thing.
C Powell
February 18th, 2008 11:50am Report this commentTaxes up, inflation up, living standards down, nationalisation, Labour in power.... Back to the 70's I feel.
mike
February 18th, 2008 12:04pm Report this commentCouple of years down the line Gordon will have been re-elected and most will have forgotten "Rocky". In fact most don't give a rats about "The Rock" anyway. However should Gordon not be re-elected then Ossy will be waffling on about how he inherited the problem, and because of this and that he can't cut taxes just yet. The folk over at Guidos will be supporting Labour and slagging off Cameroon as a posh plonker who they never liked anyway. Nothing changes you know, all be the same in a hundred years except you lot will be posting no more.
Oscar Miller
February 18th, 2008 12:47pm Report this commentDarling's performance on the Today programme this morning was lamentable. He sent one signal to the nation - to quote another Labour leader - "weak weak weak".
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