Imagine, just for a second if you had suggested to Gordon Brown, before he became prime minister, that he would nationalise a bank in his first year in No 10. He would have laughed, then snorted but, if you'd persisted, you might have seen the colour drain from his face. The N word - nationalisation - is so toxic to Brown's generation that they never wanted it to be heard in the same sentence as the Labour Party again. That is, no doubt, one reason he has delayed so long before taking this decision.
Crock- Three Questions From Taxpayers
Now that our dithering "government" has finally pulled the trigger on nationalising Northern Rock, taxpayers are formally and irrevocably on the hook for up to £110bn (we don't know how much because we haven't seen any proper accounts for months). For taxpayers, there are three key questions.
Where are we with Northern Rock?
It seems to me that the fundamentals of this problem have left policy makers with few sensible choices. The Government was right to step in last autumn to save Northern Rock - protecting depositors and stopping its problems spreading to other parts of the banking system. Alastair Darling was right to properly test all options for the future of the bank. The Treasury had two detailed proposals on the table and they are now taking a hard-headed choice in the best interests of the tax payer. The Chancellor has clearly decided that under current market conditions the private equity options failed to deliver sufficient value for money for the tax-payer. So bringing forward legislation to take Northern Rock into a period of temporary public ownership is the right decision.
Darling and Brown go mad; Northern Rock Nationalised
Well it is all over the news and I am quite shocked that it has come to this. Sadly, I have to eat my hat (hat-tip istockphoto) as I was sure that Virgin would win the bid. Instead, the Government has decided it knows how to run a bank better than private sector bankers. The decision really beggars belief and although I will post on this later this week, but here are 5 key points to remember:
Sifting through the Northern Wreckage
Perhaps, the greatest political danger for the government from yesterday’s nationalisation of Northern Rock is that it fits so neatly into the narrative of a government that is incapable of making a decision. On The Today Programme this morning, Alistair Darling was repeatedly pressed on the question of why this step was not taken earlier and had no adequate answer.
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.
Northern Rock nationalised
Cranmer is not going to bore his readers and communicants with allusions to the wise man who built his bank on a rock and the unwise man who built his bank on sand, but the decision to nationalise Northern Rock does demand a little analysis beyond that presently being served up by the mainstream media. This is, after all, the first nationalisation of an industry since the 1970s, since those heady days when the likes of British Leyland, British Aerospace, or Rolls Royce were in public ownership so that profits may be shared ‘for the benefit of all’.
How Mr Darling lost the government’s economic reputation
The Northern Rock crisis has undermined this government’s economic reputation, and deservedly so. They have made mistake after mistake in responding the Credit Crunch and the run on the bank. I have put the main blog entries on Northern Rock from this site together so people can remind themselves of the way the crisis unfolded from last summer. The main errors (highlighted at the time on this site) were:
Punters unmoved by the Northern Rock announcement
Is nationalisation really going to have no electoral impact? Even though some are calling it “Labour’s Black Wednesday” there has been very little movement in the general election most seats betting following yesterday’s announcement by Alistair Darling that Northern Rock. The chart showing betting prices as implied probabilities has hardly changed on the past week. It’s the same with the spread betting markets where punters buy and sell the number of seats the parties will get at the election as though they were stocks and shares. There was a minuscule move to the Tories yesterday but that was prompted more by the latest YouGov poll showing Labour 9% behind rather than Northern Rock.
Are the Tories doing well enough?
Even David Cameron’s most enthusiastic backers in the 2005 leadership contest might have thought it unrealistic to imagine that after a little over two years in the job he would have opened up a nine point lead over Labour. But despite having done this, Cameron is still plagued by the question of whether the Tories should be further ahead.
Lib Dem nasties challenge Clegg
"It's delicious to watch another party suffering European difficulties," writes ConservativeHome's Tim Montgomerie. He's referring of course to David Heath's threat to defy the Lib Dem Whip over the revised EU constitution - a "u-turn on policy that has never been debated at conference," according to Linda Jack.
Children with fathers do better
On 21 January Peers voted in favour of a change in the law which undermines the importance of the father to a child born after in-vitro fertilisation. The law currently refers explicitly to a child's 'need for a father', which doctors must consider before providing fertility treatment. But the Government proposes to replace this with a reference to 'the need for supportive parenting' in order to give lesbians and single women easier access to IVF.
The latest moral corruption of society is mineral water?
Jesus wept. That is all you can say when you hear that the Environment Minister, Phil Woolas, has said that the amount of money that people spend on bottled water "borders on being morally unacceptable". What a complete idiot. All those people that go a long journey and find themselves thirsty are now it seems morally reprehensible. Why.. doesn't anyone know they should be drinking coca cola? Diet of course so that we can stave off the obesity epidemic, and caffeine free too so that you don't have a heart attack and cost the state lots of money as well.
How Goes The War On Ken? (Part 2)
Friday’s decision by Ken Livingstone to suspend his equalities adviser Lee Jasper and invite the police to investigate the many claims made against him by the Evening Standard was a calculated gamble at the end of another awkward week for the London mayor. His and Jasper’s wish must be that the move will persuade the capital’s voters that there is nothing to hide and result in Jasper’s exoneration. Livingstone will also be hoping that some of the heat will now go out of the story and that the media will talk instead about the issues he would prefer to debate.
In defence of supermarkets
Jay Rayner argues in The Observer that supermarkets have made our lives better. It is a odd thing to say, but I think he has a point. Politaholic is no spring chicken. I can remember a time when most shopping was done, certainly in the working-class area in the city where I grew up, in corner shops. This was before the rise of the super and mega markets. In those days if you asked the corner shopkeeper for parmeson cheese he would have looked at you as if you were mad. An avocado? I didn't know what one looked like until I was in my 20's. Wine was for posh people; and was expensive (now one can buy a reasonably quaffable bottle for around a fiver).
Kosovo's giant mosh pit
Mother Teresa Street in central Pristina has turned into a giant mosh pit. The crowd surges one way and then twists back the other and, for a while, you have to give up all hope of independent movement. From time to time people will clear a small circular space for a spot of traditional dancing to the sinuous local pop music, as the crowd flows either side of them.
YouGov reports nine point Tory lead
A new YouGov Poll for the Sunday Times tomorrow, according to the Press Association has some good news for the Tories. “…Questioned on their voting intentions, some 41% of those taking part said they would back the Tories (down two points on a similar poll last month), 32% Labour (down one) and 16% the Liberal Democrats (up two). The overall Conservative lead was down marginally from 10 points to nine compared to the last comparable poll.”
Parties steady in latest YouGov poll
After almost a fortnight without any voting intention polls there is a new poll from YouGov in the Sunday Times. The topline voting intention figures, with changes from YouGov’s last poll back in January, are CON 41%(nc), LAB 32%(-1), LDEM 16%(nc). The poll was conducted between the 14th and 15th of February and clearly shows no significant change in party support over the past two weeks.