Vince demands Labour comes clean on Northern Rock

by Stephen Tall on November 20, 2007

Acting Lib Dem leader Vince Cable has today been piling the pressure on Labour, launching a campaign to demand Gordon Brown tells the British taxpayer how much money has been loaned to Northern Rock, and when it will be paid back.

Writing in today’s Guardian, Vince argues the case for temporary nationalization of Northern Rock to protect the public interest:

neither the chancellor nor the prime minister have been able to give me an unequivocal assurance that the taxpayer’s money will be repaid in full, with interest, during this parliament. The likelihood is growing that billions may be lost. …

[A] possibility which I believe must be seriously considered is for the government to take the bank over, temporarily. It can thereby stabilise the position, avoid being held to ransom by fortune hunters in the City or the shareholders. Public ownership would also create time for an orderly sale, either through flotation or to a mutually assured Northern Rock, operating as it did in happier times before conversion.

Anyone advocating this option can be pilloried, as I have been, as an advocate of old-fashioned nationalisation. I am frequently described as an Orange Book Liberal Democrat, for whom this is an improbable criticism. I don’t believe in general that governments should be running banks. But both in the UK and the US this approach has been used before to safeguard the public interest. There are tough options to be faced, and a period of public ownership may be the least worst option available. It is a test of Gordon Brown’s and Alistair Darling’s political maturity, as well as their financial competence, as to whether they can navigate through this dangerous crisis without ideological preconceptions getting in the way.

Writing to party members, Vince has highlighted the party’s ‘Come clean on Northern Rock’ website:

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The Chancellor has taken to calling my comments “unwise”. I wonder what words posterity will use to describe a Chancellor and a Prime Minister who entrusted billions in taxpayers’ money that was only partly secured and was managed by discredited executives, feathering their own nest.
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