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Come on Darling

Monday, 18th February 2008

I’m feeling very left out having not stuck the knife into Alistair Darling for his handling of…well pretty much anything he’s had to deal with actually. Of course the nationalisation of Northern Rock is top of everyone’s agenda and like others I’ve a few quick questions I’d really like someone to set me straight on:

1 – Is this really such a big deal since the bank was de facto already in ‘temporary public ownership’?
2 – Doesn’t this make it rather unfair to other banks since it is now indefinitely running on public money and not expensive money from the markets?
3 – How on Earth can shareholders sue – shouldn’t they be happy they get anything at all?

But the biggest question of all turns on ‘getting value for the taxpayer’, which Darling gave as the reason for this. It looks to me more and more like a political stunt. Just how much of this is really about the taxpayer getting his and her money back from a private sector deal (which the Chancellor made more or less impossible by demanding the money back in 3 years rather than 5) and how much is striking a deal which doesn’t make too much money for the buyer?

Alistair Darling is acutely aware that he must be seen to be a man of the people and not be offering Sir Richard Branson the chance of a windfall. This overly-simplistic trade union-driven view of business is clearly shown by an interview the Chancellor gave at the weekend where he said big bonuses were out of order in the City. He’s clearly ignored two things:

1 – The first half of last year was rather good which is why there are bonuses
2 – The number of bankers whingeing about how little bonus they got (if at all) is testament to the fact the City is one of the world’s purest meritocracies.