The call was said to be "acrimonious" and Mr Darling acknowledged that "Sir" Richard (Branson) was "disappointed" that his plan had been ditched. He said: "It is better for the Government to hold on to Northern Rock for a temporary period and as and when market conditions improve the value of Northern Rock will grow and therefore the taxpayer will gain.*****
UK Financial Investments said it has agreed to sell 100pc of Northern Rock to Virgin Money for £747m in cash immediately, but this could potentially rise to around £1bn.
Under the deal, another £50m is “expected” to be paid within six months. The Treasury will also benefit by up to £80m if the bank floats in the next five years and retain £150m of Tier 1 capital notes.
*****
This represents a loss of between 400 and 700 million pounds.
I was wondering if Mr Darling would like to explain to me (because I'm one of the poor suckers who is paying for this, and I can ill afford it) just in what parallel universe a loss of between 400 and 700 million pounds represents a gain to the taxpayer.
At the same time I was wondering if Mr Osborne would like to let me know why he thinks that this is a good time to sell, or didn't they do sums at his expensive school?
Answers on a post card please.
And this sale only covers the 'profitable' bits. Taxpayers are still on the hook for the £20Bn of toxic mortgages that we took responsibility for from Northern Wreck.
ReplyDeleteThe collapse of MF Global in the US ($40Bn debts) shows that the banksters are still at it. Instead of sub prime mortgages they sold sub prime bonds this time( bonds are what govts sell to finance their day to day funding). They sold bonds for Ireland, Italy, Greece etc. All triple A as usual lol
Yes Monty. Big business has privatised the profits and socialised the losses, and they haven't learned any lessons at all.
ReplyDeleteThey seem to be utterly unaware of the risks they are taking, because they are gambling with other people's money.
And we are still waiting for a government, which is massively supported (financially) by these organisations, to do something about it.
I suppose that one of the problems is that High Street banking is not a profitable business, by the standards that these people have become accustomed to. That will mean that they have to charge pretty large amounts on personal banking accounts.
Because now everyone HAS to have a bank account, that's going to be impossible for people who get their JSA or Pension paid into their account just for them to take it all out again.
But problems, Mr Cameron-Osborne, should be seen as opportunities... so grasp them..
And for God's sake get on with it.
Can’t count, can’t do economics, can’t run the country, crap Chancellor. But on the plus side he apparently writes a great kiss and tell biography in which he puts the boot into Gordon Brown (I must get it out the library....while there is still a library left {thanks to the Tories}) and he is kind to animals (well cats anyway).
ReplyDeleteTalking of Chancellors the current piss poor specimen does not seem to have got his anti-Scottish message through to all these businesses that wont want to invest in Scotland. As not only has Amazon (and they don’t come much bigger 900+ jobs) but I see that Baxters is to build a whole new factory near Nairn to make Fray Bentos pies (150 jobs), while Halfords are opening a number of new service centres (125 jobs) and Michelin have invested in a new production line (140 jobs). Mr Osborne really wants to check before he makes these ridiculous statements, and I don’t mean the budget!
Clearly Mr Osborne managed to miss these, and many more, examples of inward investment into Scotland.
ReplyDeleteClearly he is looking at the fact that the Ministry of Defence (having spend hundreds of millions on outside experts) decided to close Scottish bases.
Clearly they don't have any confidence in the future of Scotland needing British Air Force bases.
Apart from that, most people think it's a great place to invest.
As I said the other day, doubtless someone has bribed some business leaders to say that they don't have confidence in an independent Scotland. Probably a knighthood or seat on the red benches will have changed hands.
Pity Ruth seems to take the English view despite her being the leader of the Scottish Conservatives.
She's a pale pale intimation of Annabel
1300 jobs hardly a economic upturn but then in the eyes of extremist Nationalists 1300 is like a massive number of jobs
ReplyDeleteand its all due to Alex Salmond wowee!
Unemployment in Scotland is 215,000
the snp Dividend Alex Salmond himself contributed
'George Osborne got rid of 3.8 per cent of public-sector jobs. Alex Salmond got rid of 4.1 per cent. George Osborne cut colleges by 3 per cent or 4 per cent. Alex Salmond cut ours by 10%.
with thanks to Iain Gray
The real failure here is the failure to be more imaginative.
ReplyDeleteWhy not be a tad more radical?
Northern Rock could be made into a building society (you remember them? They are the 'sensible' banks, not the casino banks)
Or as part of a privatisation agreement, a cooperative management system could be introduced; so that things don't just return to the way things were.
The opportunities are endless. Why are they being ignored? Am I the only one to believe the Blatcherite economic consensus of the last 30 years needs challenging?
Well Niko, to paraphrase your own drear leader (no not a typo) tell that to the 1300 Scots who got jobs this week. And remember, that's only this week!
ReplyDeleteAny imbalance in the paying off of public sector workers is down, as you very well know, to the imbalance between Scotland and England of dependency on public sector employment.
All thanks to Mrs Thatcher who denuded our economy of industrial work and partially replaced it by creating public sector jobs.
But I see you have become a fan of Mr Osborne. Congratulations on becoming a Tory. I'm sure Ruth will welcome you with open arms, as her own members run for the cover of a party which isn't heading for obliteration.
No Dean, you know very well that you are not. And your idea of Building Society or co-operative is worth much more investigation.
ReplyDeleteI imagine that the problem you may have with that is that people wouldn't make enough money out of it.
Dean..
ReplyDelete"Northern Rock could be made into a building society"
Err that's what it is Dean. And why it went bust. It supplied mortgages at 125% and leveraged itself to about 100%.
It still has mortgages 'worth' £20Bn which the taxpayer has now covered.
Darling was as innumerate as the one he succeeded who was all Balls and should be in the dock with his banking friends for fraud. The latest on Northern Rock is that it was in house money that has been used to pass ownership to Virgin so the fraud just continues!
ReplyDeleteThrobber. It was classified as a bank which is why it was able to lend the way it did. True, it had been a mutual before it became a bank (thanks to the greed of its members and the Thatcher relaxation of banking rules and fever for profit. But it was the Northern Rock Bank.
ReplyDeleteCH: The trouble is that the governor of the Bank of Britain doesn't seem to be particularly numerate either. The mandarins at the Treasury might as well be of the orange variety, and no one seems to have the foggiest idea what they are doing. Not just with money, but with everything else.
ReplyDeleteMore feraud... pfffff, whjy would we be surprised at that. And, when people protest they are bundled up and moved along. If they dare to resort to violence in their protest that despicable speciman of a prime minister tells the judges to throw away teh rule book.
Pity he never thinks of that when MPs and Lords are stealing millions from us and when bankers aren't so much going to work as having a round of Punto Banco, with you and me picking up their losses!
Bonuses this year?
Hague and Coe sports firm in £3m write-off
ReplyDeleteIncompetency spreads across parties and obviously £375 grand a year must be to little to expect anything else.
Oh...
ReplyDeleteLook at how twisted and corrupt these people are. It's all about putting your mates into the lords; buying shares in their companies; making obscene earnings by using your influence and your multiplicity of titles to make more and more.
They just sicken me.
I always thought that Hague and Coe were boyfriends, at least that was the rumour all these years ago when Willie was leader of the opposition; I didn't realise that they were in the business of making millions.
But I thought that wee Willie, as a minister wouldn't be able to have any shares in his friends company.
Or does that not matter anymore. I mean now we know that all they are interested in is furthering their own miserable selves, why pretend to transfer things to blind trusts or...the wife...
What a shame they have gone broke. I expect the Olympics will too, although we won't be told about it. It will have been a glowing success... and behind the scenes Osborne will pour in billions from a fund somewhere...
Niko supporting a Tory Chancer? - no surprise and no more comment necessary!
ReplyDeleteTris, before you start, yes I do know how to spell Chancellor!
ReplyDeletetris..
ReplyDeleteJust looked at Northern Wreck's history. Yes you're right ( and so is Dean - even a stopped clock is right twice a day ). It changed from mutual to troughery in 1997. Think that was Teflon's era.
I just checked up on that Throbber. It was announced in April 1996 so it was in Major's time. Not that Tory Blur wouldn't have been delighted to oversee any right wing nonsense like that.
ReplyDeleteYes John. That's our Niko Tory through and .... no wait Labour through and ... no wait...
ReplyDelete“The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”
― George Orwell, Animal Farm
And yes, John, I know how to spell Tony Blair, every bit as well as you know how to spell chance ellor!