Sunday, 17 February 2008

What took them so long?

The news today that Northern Rock is to be nationalised comes as no surprise. The only surprise was that it took the government so long to accept that nationalisation was the least worst option available in terms of protecting the exposure which taxpayers had towards the troubled bank.

It should be pointed out that Vince Cable and the Lib Dems have been calling for Northern Rock to be nationalised since before Christmas. I don't think that anything has changed in the bank's situation since then, so why have Alistair Darling and Gordon Brown sat on their hands and done nothing for the past couple of months?

What is also not a surprise is the reaction of the Tories towards today's announcement. George Osborne slammed the decision as a return to the 1970s, but yet again failed to come up with any idea of what the Tories would have done instead. As they are against nationalisation and also (rightly) criticised the government's proposed private sector rescue plan, the only other option that leaves would have been for the bank to go into administration. If that is what they think, they should be honest enough to say so. They should also spell out what that would mean for the Northern Rock's customers and mortgage holders.

But simply criticising the government for nationalising the bank when they haven't come up with an alternative of their own is the sort of shallow opportunistic politics that typify today's Conservative.

1 comment:

The Tory Troll said...

Presumably the two parties who had actually been in power at some point in the last 70 years were wary of making the taxpayer bear the full risk of lending £100bn of mortgages in an uncertain housing market as they understood what this means to government spending and the economy.

This contrasts with the Lib Dems (and now Labour)who seem to feel that taking more money away from people at a national or local level is a good way to face an economic slowdown. Indeed, your prediction about a return to the 1970 made a while ago is becoming eerily accurate - complete with the Liberals supporting a discredited Labour government in their failed economic policies.

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