Fraser Nelson

A first anniversary that shouldn’t be celebrated

A first anniversary that shouldn't be celebrated
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It's the anniversary of the Northern Rock nationalisation today, and I've just done a discussion on Simon Mayo's R5 programme arguing why the occasion is not to be celebrated. Rosie Winterton, the pensions minister, was saying nationalisation was a great success. Her argument is worth recording here because it gives a clue why Labour's poll rating may sink sink further.

Look at the pensioners, Winterton said; nationalisation of NR rescued them from losing all their savings. Did it really? Wasn't the the savings guarantee offered on 9 Oct 07 (which stopped the run on the bank)? Nationalisation - or, as it was called then, "temporary public ownership" - came in fully on 18 Feb 08, as most people listening would know.  It's one thing to lie about a Tory manifesto pledge, another to lie about events the public can clearly remember for themselves. In seeking to conflate the savings guarantee with the nationalisation, she takes the public for fools. And this is what turns irritation with the government into seething anger.

Winterton also claimed, fallaciously, that David Cameron, would have been allowed NR to go bust.  Fact is, he supported the final act of nationalising Northern Rock - a point that Gordon Brown loves to make in PMQs.

Now, ministers can exaggerate on occasion but its rare they base their argument entirely on lies - except, of course, durinng election time. Listening to Winterton, it sounded as if she had gone into full-on campaign mode. Every question about NR was, to her, a question about the Tories. Mayo read out to her some listeners' comments, one asking if she knows how infantile it sounds to bang on about the "do nothing" Tories. She answered the question with another wee rant against them. So this is how Cameron's 20 point lead can turn into a 30 point lead. Just let Labour ministers rant, and let the public make up their own minds.

My point, by the way, was that nationalisation of NR has been a disaster not only for the taxpayer (we've lost uncounted £billions on NR so far), but also for the 200,000 people who were unable to remortgage when they came off its fixed rates - people who, by definition, will be at the highest risk of default. NR has a 5.1% SVR (compared to 3.5% for Nationwide and Lloyds and 3.94% for HSBC) and - as I revealed a while back - this is because it's under instructions to screw anyone it can to repay back its government loan.  About a third of NR mortgage owners are now trapped on its penalty SVR rate - the industry average is a tenth on the SVR - so nationalisation has led to Northern Rock squeezing the poor until the pips squeak. This is worth remembering next time you hear Gordon Brown demand that mortgage lenders "pass on" the Bank of England cuts.

Written byFraser Nelson

Fraser Nelson is the editor of The Spectator. He is also a columnist with The Daily Telegraph, a member of the advisory board of the Centre for Social Justice and the Centre for Policy Studies.

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