Releasing contentious information on Friday afternoon used to be UK government’s way of minimising its impact. A Sunday release seems to be taking the practice of making news items insignificant to a whole new level. How keen must these Treasury workers be, if they are working on a Sunday?
The BBC has just reported that the failed Northern Rock Building Society is to be nationalised. After spending a fortune on it, the UK government was not best pleased that the Office of National Statistics (ONS) decided to class Northern Rock as part of the public sector. Hence its debts added close to £100bn to the National Debt.
(Fascinating sub-plot. ONS employees, facing their jobs disappearing if they won’t move to Wales and with a new obligation to prove scientific independence, just decided to tell the truth. Woot.)
….as the Office for National Statistics has made clear by insisting that its liabilities, to the tune of £90bn, should be classified as government borrowing (from the Observer, 10 Feb, 2008.
As a side-effect, a harsh spotlight fell on the plans to plug the holes in pass this billion-leaking cash sieve and pass it on to Virgin so they could make profits.
By the way, the UK’s population is round about 61 million. So, thats well over a thousand pounds for every person in the UK. If we just count the working population, this is about 29 million. If I haven’t got the wrong number of zeroes here, I make that £3,103 for every working person in the UK. That’s a year’s tax for the huge numbers of low-paid workers who make up the bulk of the population. Don’t make me look up how many countries in the world there are where the average annual income is much less than that. (That’s what Wikipedia is for)
The British public seems to love Richard Branson, seeing this ex-Etonian as a true man of the people, because he wears loud sweaters and gets in hot-air balloons. Even so, there is a limit even to the British people’s love of ballooning billionaires. Hence there is some opposition to shoring up a company for his benefit at quite this level.
Or maybe Branson isn’t prepared to take any risk at all with Northern Rock and needs the government to make Northern Rock profitable before Virgin get their hands on it.
From yesterday;s Guardian:
Taking the bank into public ownership – which could mean sacking thousands of staff and making taxpayers in effect bear the risk of ‘owning’ £100bn in mortgages – would trigger a storm of protest…..
I can see that letting a bank go bankrupt would be pretty economically devastating and the government had little choice but to rescue it. Even so, how come no one has been arrested? And what about the regulatory agencies that are supposed to be there precisely to make sure that people like me – i.e with no capital and a poor track record for looking after even their own money – don’t suddenly find themselves looking after billions of pounds of other people’s money?
And assuming, that the government now has to do all the dirty work to bring the bank back to life, why on earth must they hand it back to the private sector as soon as it ever becomes profitable again?
(Sorry if you thought this was going to be about the beautiful wrestler-turned actor in rubbishy movies, the Rock. You probably noticed by now that it isn’t.)