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'Pride' over Northern Rock sparks takeover talk
Joe Murphy, Political Editor17.02.09
Labour today declared it was "proud" that it nationalised Northern Rock - fuelling speculation that another bank could be taken into public ownership.
Marking the anniversary of the landmark decision, Pensions Minister Rosie Winterton said: "I am proud as Pensions Minister to be able to say that, because the Labour Government acted, no pensioner lost a solitary penny."
Her words come amid speculation that the Government might be forced to take more banks into public ownership. Although ministers say nationalisation is not being contemplated "at the moment" they have not ruled it out. Already Lloyds Banking Group - stricken by £10billion losses in its subsidiary HBOS - has been propped up with £17billion of taxpayers' money, and Royal Bank of Scotland is 68 per cent-owned by the state.
Northern Rock owed the taxpayer £26.9 billion when it was taken into public ownership by Alistair Darling.
Under new chairman Ron Sandler it shed 2,000 jobs and began cutting back its lending by raising mortgage payments and ruthlessly repossessing homes where owners could not pay, with the result that it repaid all but £11billion of its debt by September.
Former chief executive Adam Applegarth, whose risky financing schemes led to the bank's downfall, walked away with pay-offs totalling £785,000.
Reader views (10)
Labour proud that it nationised Northern Rock,I wonder when they will get their hands on Lloyds Bank?
- Stan White, leeds
There are thousands of pensioners that have lost large chunks of their pensions and possible earning on savings due to the failure of Northern Rock. What is left of these pensioner savings are now being swept up in the extra tax that is now going to pay for this inept government.
- Ian, Reading, England
Britain has been cursed by having ignorant, poorly educated, dim fools in govt during a critical crisis. Not a Churchill in sight. Does anyone in Britain know who he was anymore? I understand he has been omitted from school curriculum. Don't want to make the lesser people feel hurt........and there is a lot of them in UK govt.
- Kr, Florence Italy
No, as a Pensioner I might not have lost a Penny, but I havent gained one. Since the Northern Rock fiasco savings interest rates have virtually disapeared. The problem is that there is too much (Government)money about. Had Northern Rock gone bust, all that misterious Offshore money in Norhtern Rock Granite would have had to be "re-patriated" and all the other banks who feared insolvency would have arranged their funding accordingly knowing they were on their own, and interest rates would still be returning pensioners a "Top Up" to their pensions for those who were frugal enough to save over their 50 year working life. I fear that labours actions in supporting an insolvent and flawed business plan bank which was Norhtern Rock will be their downfall, and again with HSBC. They should leave well alone and stick to politics, after all how many Labour MP's have actually run a business. Anyway there's no interest where there's no interest. Who in fact will vote labour now.
- Jim Alan, Lake District
OK I'll own up. treasury officials have been sniffing around my piggy bank, sounding out the prospects of sweeping my humble few bob and my avalanche of debts into the taxpayers umbrella.
- M.O'Brien, london.uk
Pride comes before a fall.
Is she really saying Labour are proud of the way they caused hundreds of home owners to be forced out of their properties.
And the Labour imbeciles talk about Lady Thatcher having no social conscience. You could not make it up
- Peterb, Chelmsford, England
Not a single pensioner lost money, except those who had some of their pension funds savings invested in Northern Rock. Of course the minister, with her gold plated MPs pension would not understand that some mere mortals may have had pensions that were based on the value of the underlying assets, not protected by a blank cheque from the electorate. It is rather worrying that the Pensions Minister clearly does not understand how some pensions funds work, otherwise she could never have made such a statement.
- Ian, London
When buying shares you are investing/speculating, if the shares get wiped out then tough, they are at the bottom of the capital structure when raising cash! Investments can go down as well as up, a bit like houses!
- Shareholders, London
i wonder if the minister is also proud of the shot-gun marriage forced on lloyds tsb which used to give shareholders a good dividend, and now insecurity. what a farce!
- Malcom Murray, ipswich
There are THOUSANDS of pensioners who saw their shares lose all their value overnight when the government took them. The government caused untold misery by its action, and has no comfort for those left broken in spirit and wallet.
- Keith Hill, Bournemouth
