‘We cannot have a situation where the banks are able to privatise their profits and nationalise their losses,’ declared Vince Cable in 2008 in the midst of the banking collapse. But steel companies? That is a different matter. Cable has demanded that the government take on the pension liabilities of Tata’s British employers in a last gasp attempt to attract a buyer and save the plants.
On the subject of nationalising pension liabilities, Cable has form – as business secretary he forced the taxpayer to take on the responsibility for paying postmen’s pensions so that he could sell off the Royal Mail – which he did, at a giveaway price. The taxpayer might have preferred it had the government clung onto the Royal Mail’s huge estate. No sooner had the company been privatised than it started selling the sites of redundant sorting offices to feed the London property boom.
Cable was right first time around. A policy of privatising profits and nationalising losses is an outrage against the taxpayer. It isn’t hard to guess the outcome if the government facilitates the sale of the Port Talbot works. It will limp on, Rover-like, to die another day – while the ‘saviour’ feasts on the assets.
Trouble is, how can government resist bailing out big iconic industries like steel when the banks were themselves bailed out so extravagantly less than a decade ago? However ministers try to make out there is a difference between banks going bust and an industrial complex going bust, people are going to accuse them of following one rule for bankers and another rule for the rest. It makes no difference that it was Gordon Brown who bailed out the banks: Cameron and Osborne clearly supported it.
How much better that the names of RBS and Lloyds had been allowed to go to the wall in 2008, their shareholders’ entirely wiped out and their directors left jobless and pension-less. The government could then have maintained a principled stand that it is not the job of the state to bail out failing businesses and that all it would achieve is to undermine good businesses.
As it is, the government faces an awkward choice: shovel public money into basket-case factories – or stand accused, not unreasonably so, of favouring their banker friends over the working man.
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