Another poll has underlined the public's view that David Cameron has "played politics" with the Northern Rock crisis. The Times' Populus poll puts Brown/Darling four points ahead of Cameron/Osbourne in terms of trust to solve this year's economic problems. This follows similar findings for the Economist which I blogged about yesterday.
Stephen Tall has blogged about the post-Northern Rock scenario here.
Showing posts with label Northern Rock. Show all posts
Showing posts with label Northern Rock. Show all posts
Saturday, February 23, 2008
Friday, February 22, 2008
Northern Rock attack backfires on Cameron - Cable emerges with honours
The Telegraph reports:
Mr Cameron’s aggressive attacks on the Government’s handling of the Northern Rock nationalisation had backfired.
A YouGov poll for The Economist found that six out of 10 people thought the Tories were opposing nationalisation because they were “playing with politics.”
And only a fifth of voters said the opposition would have handled the crisis better than the Government.
The Economist writes:
As polling conducted for The Economist by YouGov shows, the Tories do not seem to have gained from Labour's woes. Only 5% of people blame the government for Northern Rock's difficulties; over a third think its handling of the crisis has been fair or good (see chart). And critics say the Tories' own response has been shrill. Conservatives pretend to believe that this view does not resonate beyond parliamentary sketch-writers and other denizens of the Westminster village—but only a fifth of voters say the main opposition party would have handled the crisis any better than the government. Almost two-thirds think the Tories are playing politics by opposing nationalisation; their own proposal—putting the bank into administration by the Bank of England and winding it down—is not all that different.
By common consent, the only politician to have emerged from the Northern Rock saga with much kudos is Vince Cable, the Liberal Democrats' Treasury spokesman, who impressed as the party's caretaker leader before Nick Clegg was elected to the job in December. An economist by background, Mr Cable was among the first to suggest that public ownership was the “least worst” option for the bank.
It is interesting that the public blame Northern Rock's management for the crisis. 60% of respondents blamed the management - head and shoulders above anyone else. The government is only blamed by 5% while financial conditions or the Bank of England/FSA get the other votes.
The Economist concludes that, although the Bank's crisis was "Bad news for Labour", it was "No Black Wednesday".
Mr Cameron’s aggressive attacks on the Government’s handling of the Northern Rock nationalisation had backfired.
A YouGov poll for The Economist found that six out of 10 people thought the Tories were opposing nationalisation because they were “playing with politics.”
And only a fifth of voters said the opposition would have handled the crisis better than the Government.
The Economist writes:
As polling conducted for The Economist by YouGov shows, the Tories do not seem to have gained from Labour's woes. Only 5% of people blame the government for Northern Rock's difficulties; over a third think its handling of the crisis has been fair or good (see chart). And critics say the Tories' own response has been shrill. Conservatives pretend to believe that this view does not resonate beyond parliamentary sketch-writers and other denizens of the Westminster village—but only a fifth of voters say the main opposition party would have handled the crisis any better than the government. Almost two-thirds think the Tories are playing politics by opposing nationalisation; their own proposal—putting the bank into administration by the Bank of England and winding it down—is not all that different.
By common consent, the only politician to have emerged from the Northern Rock saga with much kudos is Vince Cable, the Liberal Democrats' Treasury spokesman, who impressed as the party's caretaker leader before Nick Clegg was elected to the job in December. An economist by background, Mr Cable was among the first to suggest that public ownership was the “least worst” option for the bank.
It is interesting that the public blame Northern Rock's management for the crisis. 60% of respondents blamed the management - head and shoulders above anyone else. The government is only blamed by 5% while financial conditions or the Bank of England/FSA get the other votes.
The Economist concludes that, although the Bank's crisis was "Bad news for Labour", it was "No Black Wednesday".
Tuesday, February 19, 2008
Northern Rock nationalisation v the Tory "alternative" - spot the difference
The Conservatives know all about nationalising banks. As Bloomberg reminds us, the last bank nationalisation was when, in 1984, Maggie Thatcher bought Johnson Matthey PLC's lending operation for £1. And in 1994 the Tories rescued Slater Walker Securities by advancing about 70 million pounds.
Small beer compared with Northern Rock, yes. But these couple of examples of the Tories helping out private financial operations with public support indicate that "nationalisation" in an emergency has not been anathema to the Tory party in the past.
So why are they talking about "nationalisation" now as if it is the Black Death?
They are trying to make out that Labour is returning to the days of British Leyland and nationalised electricity, coal, water etc etc. Of course, it is not a return to those days. It is a temporary nationalisation which allows the business to continue trading.
The Tories are trying to paint this as Brown's Black Wednesday. To an extent it is. But I think they are over-doing it. They protesteth a tad too much. They are accusing Brown and Darling of "delay and dither" but they themselves seem to be majoring on wisdom after the event.
They call for Darling's resignation. But the only person in a secure enough position to call for his resignation is Vince Cable. He's actually got the thing right all the way through.
The Tory alternative to nationalisation is "Bank of England reconstruction" or "public administration". One of the arguments they use for this method is that it would not allow Northern Rock to be unfairly competitive. Nonsense. As of today, Northern Rock won't be able to be unfairly competitive under EU rules anyway. So that is a completely void argument.
Let us look at the definition of the "administration" (from http://www.bized.co.uk/) which the Tories advocate:
Administration. An application to a court by the company to suspend the requirement to pay creditors for a period of time. During this period of time, the company will be administered by an IP (Insolvency Practitioner) and it will be their job to either find a new buyer for the business or parts of the business, negotiate with the creditors to restructure the debts or oversee the liquidation of the assets to pay off creditors. Going into administration gives the firm some breathing space to help deal with its problems and can result in the firm surviving albeit probably in some different form than before it went into administration.
The first thing to note is that a company usually applies for administration of itself. Not the government. And Northern Rock haven't done that and didn't seem to be about to.
The other thing is that administration, to a large extent, seems remarkably similar to nationalisation anyway. In fact, it's "spot the difference" time. The Bank of England is "wholly owned by the government". So putting Northern Rock into "public administration" (George Osborne's words) under the Bank of England is putting it, effectively, into public ownership albeit, perhaps, for a shorter period than the government's "temporary public ownership". But such an administration would seem to have the disadvantage of effectively throwing in the towel as far as Northern Rock continuing as an effective viable company.
So goodness knows what the difference is between Labour's "nationalisation" and the Tories "public administration". It is very difficult to put a fag paper between them. If anything, the Tory plan seems marginally worse because it would effectively be surrendering the battle to continue Northern Rock as a going concern in more or less the same form as it is today. At least under the Labour plan there is a competent commercial manager in place who will attempt to run the bank on a commercial footing. The Bank of England public administration plan would have something of a winding up/selling off operation about it.
Small beer compared with Northern Rock, yes. But these couple of examples of the Tories helping out private financial operations with public support indicate that "nationalisation" in an emergency has not been anathema to the Tory party in the past.
So why are they talking about "nationalisation" now as if it is the Black Death?
They are trying to make out that Labour is returning to the days of British Leyland and nationalised electricity, coal, water etc etc. Of course, it is not a return to those days. It is a temporary nationalisation which allows the business to continue trading.
The Tories are trying to paint this as Brown's Black Wednesday. To an extent it is. But I think they are over-doing it. They protesteth a tad too much. They are accusing Brown and Darling of "delay and dither" but they themselves seem to be majoring on wisdom after the event.
They call for Darling's resignation. But the only person in a secure enough position to call for his resignation is Vince Cable. He's actually got the thing right all the way through.
The Tory alternative to nationalisation is "Bank of England reconstruction" or "public administration". One of the arguments they use for this method is that it would not allow Northern Rock to be unfairly competitive. Nonsense. As of today, Northern Rock won't be able to be unfairly competitive under EU rules anyway. So that is a completely void argument.
Let us look at the definition of the "administration" (from http://www.bized.co.uk/) which the Tories advocate:
Administration. An application to a court by the company to suspend the requirement to pay creditors for a period of time. During this period of time, the company will be administered by an IP (Insolvency Practitioner) and it will be their job to either find a new buyer for the business or parts of the business, negotiate with the creditors to restructure the debts or oversee the liquidation of the assets to pay off creditors. Going into administration gives the firm some breathing space to help deal with its problems and can result in the firm surviving albeit probably in some different form than before it went into administration.
The first thing to note is that a company usually applies for administration of itself. Not the government. And Northern Rock haven't done that and didn't seem to be about to.
The other thing is that administration, to a large extent, seems remarkably similar to nationalisation anyway. In fact, it's "spot the difference" time. The Bank of England is "wholly owned by the government". So putting Northern Rock into "public administration" (George Osborne's words) under the Bank of England is putting it, effectively, into public ownership albeit, perhaps, for a shorter period than the government's "temporary public ownership". But such an administration would seem to have the disadvantage of effectively throwing in the towel as far as Northern Rock continuing as an effective viable company.
So goodness knows what the difference is between Labour's "nationalisation" and the Tories "public administration". It is very difficult to put a fag paper between them. If anything, the Tory plan seems marginally worse because it would effectively be surrendering the battle to continue Northern Rock as a going concern in more or less the same form as it is today. At least under the Labour plan there is a competent commercial manager in place who will attempt to run the bank on a commercial footing. The Bank of England public administration plan would have something of a winding up/selling off operation about it.
Monday, January 21, 2008
Vince Cable - the city traders' enemy
Thanks to a commenter called DavidA, on my previous post about Northern Rock, for this link to a site where city traders share tips and chat.
The link is to where the traders were chatting during the House of Commons discussion of Northern Rock this afternoon.
In summary, they liked Darling's speech very much because it sent the Northern Rock share price soaring as he spoke. They were all licking their lips at making a killing. (In fact I think some of them were "typing one handed" because they were making a killing as they chatted!) And then they wanted Vince Cable to shut up - badly.
It is spine-chilling to read their greedy remarks when you consider we are talking about vast amounts of taxpayers' being put on the line here.
It doesn't take a genius to work out that Alastair Darling is the city traders' friend, while Vince Cable is the City trader's enemy and the taxpayer's friend.
Here are some of the remarks from the traders:
Paranoia Blue wrote:
All being told, I thought that was a pretty good all-round performance [except VC, of course] Let’s hope for a few more companies entering the fray – to punt this price up some more!
BigFoot001 wrote:
I wish VC would sit down and shut his mouth. anybody would think he has a vested interest to help someone to buy NRK on the cheap. all he keeps harping on about is to drive the price down. to no avail today.......... good!!!
now the sea of blue and @ 94.00
As Darling was talking, Whizzy wrote:
As he's speaking.its going up. Someone tell him to keep talking for the next hour lol.
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