Thursday, November 17, 2011

Northern Rock sale

I thought that Richard Branson should have been allowed to buy Northern Rock four years ago instead of nationalising it.

If that policy had been pursued by the last government, the bank would probably now be in a position similar to where it is today but without hundreds of millions of pounds of losses to the taxpayer.

Mind you, that loss was not incurred today. Northern Rock had lost about £400 million in operating losses in the four years since being nationalised - and if it is successful under Virgin ownership, the taxpayer will ultimately get back as a result of today's deal approximately what the previous government originally put in, less those losses.

Nevertheless, I am delighted to see the bank out of the public sector and being run as a commercial enterprise, which is where it belongs.

Governments of whatever colour have enough trouble doing their own jobs. They should absolutely not be running banks.

I'm also pleased that the new owners have guaranteed no compulsory redundances for at least three years. The last thing we need in the present climate is more job losses, and I note that there were cheers among Northern Rock staff when the deal was announced.

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