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Monday, January 14, 2008


The fact that the Government has commited £50 billion of our money to shoring up Northern Rock in an effort to protect their own reputation for economic competence is a scandal. This is especially so because of the additional public cash that has had to be pored into this bank as Ministers resisted calls for its temporary nationalisation.

It now transpires that the Chancellor of the Exchequer may well have conceded the case for the nationalisation of Northern Rock and is in the process of identifying a suitable person to lead it. Ron Sandler, a City heavyweight who was once head of Lloyd’s of London, has been lined up as provisional executive chairman to run the organisation for the Government if it becomes necessary.

Liberal Democrat Shadow Chancellor, Vince Cable, who led calls for the temporary nationalisation of this institution, must be feeling vindicated this morning, even if the government dragged its feet for far too long before conceding that he was right. It is the only course of action left that might protect the taxpayer's interest. The Chancellor should not delay any longer before acting.
What about the alternative? The alternative - actually the usual way the private sector deals with such failures – was available right at the get go. When a private company fails its assets are sold to the highest bidder and the failing company either continues with a new owner or is hived off. By interfering with the normal way business failures are handled the taxpayer is now left with a monster amount of liability; also, because of the liability the Government can't sell the business without losing lots of taxpayers' money, so nationalisation becomes the buzz word. It seems the Government of the day was unwilling or unable to work out the consequences of pumping billions of pounds into a failing enterprise. I think the latest estimates of taxpayer liability add up to well over 20 billion and could end up as high as 50 billion. Whatever the final figure, the amount of liability is mega-huge c/o Gordon Brown. The men in black suits should already be knocking on his door and inviting him to spend more time with his family and constituents.

The bottom line is Gordon Brown fancied an early election and a Northern Rock going to the wall would cause problems so instead of letting business-nature take its course, Gordon Brown has exposed the taxpayer to huge liabilities by pumping billions upon billions into a failing business model. Gordon Brown is not fit to be PM, he MUST GO.
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