Sunday, 17 February 2008

Rock Nationalisation just the start of Labours problems

Todays announcement of Northern Rock nationalisation is just the start of Labours problems.

I like many other demutualisation shareholders have seen the writing on the wall for weeks but at the end of the day the whole fiasco should never have been allowed to happen.

I hope tomorrow that Vince will ask the hard questions.

The questions that seek to understand what the Chancellor was doing in the summer when he knew the problems at Northern Rock were a possibility, the questions as to why the FSA allowed the directors to act in the way they did and the questions that seek to unravel if there has been a false market in Northern Rock shares since the middle of August last year.

Because these are the questions on my mind at the moment, I accept shares go up and down and are a risk but put simply I owned shares in a company who in the full knowledge of the Government were keeping price sensitive information from the market.

In fact the whole story of Northern Rock is enough to shake the foundations of confidence in the banking sector to the core.

Price sensitive information not released to shareholders, dividends announced and then withdrawn, the government inferring that a private deal was possible then pulling the plug at the last minute, rescue terms set with financially impossible criteria. Then terms of reference for compensation set by the people writing the final cheque.

Now as we go down the nationalisation route I ask myself how much less taxpayers money would have been spent with nationalisation at £4 a share in the second week of the crisis than will now have been spent over the intervening time and will be spent in the courts.

Wheter I get a penny out of this I now don't really care, what I do care about is the incompetence of our Chancellor past and present exposed to the full. All the lessons that are to be learnt learnt in full and the relevant people (and I dont mean Northern Rock employees) given their P45 at the first available opportunity

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