2/17/2008

Vince Cable was right - Lib Dems show better understanding of Northern Rock issue than the government

Vince Cable was right after all. Despite government dithering and trying to avoid the inevitable, it has been announced that the Northern Rock will be nationalised after all.

Despite Tory claims that this shows a catastrophic failure on the government's part, at least the government have finally made a decision on this. Remember, the Tories have absolutely no stated policy in this topic and whilst opposing nationalisation have produced no alternative policy with which to lead on.

What this does show though is that after three months, after claims at the time that Vince Cable did not know what he was on about and Labour cliams that the Lib Dems were scaremongering, it is finally clear that the Lib Dems, an opposition party, have a greater udnerstanding of a serious issue like this than the government does.

Perhaps the Lib Dems are just lucky to haev a top class economist like Vince Cable in the party who could see the writing on the wall. However, how much tax payers money has had to be poured in to Northern Rock in the past three months whilst the government have prevaricated and postured over this ? How much money has been wasted by the various groups bidding to take over Northern Rock ?

Nationalisation is the least worst option, but it should guarantee that taxpayers are, in the long run, fully compensated, but this whole business is another nail in the coffin of Labour's claims to be able to run the economy, to have their finger on the pulse of business and be financially prudent.

2 comments:

Newmania said...

but it should guarantee that taxpayers are, in the long run, fully compensated


Oh yes of course , the property market couldn`t collapse could it ? This is to guarantee 6000 jobs in Labour`s heartland, no more no less ,and it is done by risking everyone elses money.

The question is Nick , will you want to lend me a few thou should I be redundant and that question must be asked by everyone who , being in the private sector , faces that posibility every day.( Usually at the worst possible time ) .

Still , loving the cut of your jib on the Lisbon lie . I wonder how you feel about the negotiations that have been going on between Clegg and Brown about a deal power for PR after the next election. Is it connected ? .... Dreadful when the smallest Party holds all the strings isn`t it. Seems to immediately encourage clandenstine back scratching . Will you be calling for honesty here as well and at least with the Party ?

Pete (WestBrom Blogger) said...

I would have thought the Conservatives position was quite obvious - no to nationalisation, cut it loose and let it sink or swim.

Nationalisation was not the "least worst option", it was the worst possible option. What damage does it do to London’s position as a global financial hub, I don't think its even possible to put a price on it. There can be few scenarios that will dissuade foreign investment more than the forced nationalisation of a bank!

Cut the Rock off, if it goes tits up so be it. Depositors are protected, staff would loose their jobs and shareholders would loose out (but that’s what you get for investing in a bank with dodgy lending practices). The only reason Labour won't do this is because its heartlands in the North would be affected the most should the Rock go into administration.

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