Selling Northern Rock will rob Taxpayers

Labour Party

I was extremely disappointed to learn this morning that George Osborne has decided to ignore the sound advice from the Co-operative Party over the sale of Northern Rock.

Our Chancellor - Blinded by Ideology

Our Chancellor - Blinded by Ideology

The Co-operative Party’s proposals, which I support, advocated for a re-mutualisation of Northern Rock. Mutual ownership is the best solution for ensuring a stable long-term future for these companies, and ensuring that the expense undertaken in their nationalisation will deliver for consumers in the long term.

During the 1980s the Conservatives under Margaret Thatcher embarked upon an ideologically-motivated demutualisation of co-operative financial institutions. It was many of these institutions, such as Northern Rock, which then subsequently failed due to over-risky lending, plunging us into a financial crisis.

Given that the policy of enforcing a complete privatisation of the financial sector has shown not only to have failed but to have done so with dire consequences to the entire country, it is clear that this decision is motivated by blind ideology rather than the best interests of the country.

In addition to the lessons of history there are other reasons why this decision is catastrophic. Firstly, if Northern Rock is auctioned off now then the taxpayer will actually make a loss on the sale: according to the Times the bank, which was given an injection of £1.4 billion of taxpayers’ money, is only expected to fetch about £1 billion when auctioned. This means that taxpayers money will be used to subsidise a private purchase whose profits will then go to line the pockets of the City’s wealthiest.

Secondly, in privatising the bank the government is relinquishing any opportunity it has to force its practices to be more consumer friendly. The least the taxpayer should gain from such an expensive purchase is the assurance that the currently nationalised banks will be pressured into providing accessible lending for those struggling during these difficult times. George Osborne however, has now demonstrated just how little he cares for those small businesses and first time homeowners who were most affected by the crisis and who our financial services are currently failing.

This is simply another example of how this deeply political chancellor is putting his own personal beliefs above the needs of the people and future economic stability and growth. It also highlights just how unfit he is to be in charge of our country’s economy. I urge you to support the Co-operative’s proposals by signing up to their campaign to reverse this decision.

2 thoughts on “Selling Northern Rock will rob Taxpayers

  1. Condemning the Tories for being ideologically driven is going a bit far. If they are ideologically driven it means that they have ideas or ideals. Discerning any guiding principles in the party would be a difficult task; their actions are determined by factors other than fixed principles, there is the desire to obey the Brussels and the USA coupled with their wish to produce vacuous sound-bites and meaningless promises.

    To accuse them of having ideas is rather like criticising the EU for being too thrifty or denouncing the Labour Party for its socialism.

  2. The Taxpayer is not making a loss on the sale. The Government has reaped millions of pounds worth of interest charged to NRK for emergency loans which were charged at penal rates. The Government also has the so-called bad bank which acually made a £400m profit last year. If NRK was one entity is could’ve been sold for up to £5bn making a huge profit. The only people that lost out was the poor shareholders who were robbed. To those that say, NRK shareholders gambled and shares can go up or down – Correct shares can go up or down but who would think the company would be stolen. There were double standards when it came to Lloyds take over of HBOS and then the secret loans provided to RBS and Lloyds to the tune of over £60bn.

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