So Ed Balls knew about this then, eh?

Ed Balls, the shadow chancellor, attacked the Government for selling off Northern Rock for “a loss”, saying Mr Osborne would have to explain why now was the best time to sell the bank. “I think there is a question as to whether or not this is the best time,” said Mr Balls.

Well, yes Ed. But it was your lot that agreed to this:

In a letter responding to criticism that the Treasury should have waited to get a better price before selling Northern Rock to Virgin Money last week, the chancellor revealed that the UK was bound by a deal made by the previous government with the European Commission to sell the business before the end of 2013.

In the letter, due to be published today, Mr Osborne said there had only been a “limited window to get Northern Rock plc back into the private sector”.

He added: “Given we were advised that Northern Rock plc would have been likely to remain loss-making [until] at least well into 2012, which would have depleted taxpayer resources still further, agreeing a sale now was even more imperative.”

 

11 comments on “So Ed Balls knew about this then, eh?

  1. Given we were advised that Northern Rock plc would have been likely to remain loss-making [until] at least well into 2012, which would have depleted taxpayer resources still further, agreeing a sale now was even more imperative.

    But wouldn’t the sale price have been depressed in order to take this into account, thus depleting taxpayer resources either way?

  2. Matthew (#5), if they left it too close to the deadline, buyers would bid the price down as the government became increasingly desperate to sell.

  3. “depleting taxpayers resources still further” to placate vested interests and pander to the client base is quite acceptable, if not intentional, for Labour. It is their Modus Operandi.

  4. Ironically, the losses were caused by the government pumping in more capital than would normally be required, to make sure the bank didn’t fail. The “bad” bank made millions, the “good” bank lost millions.

    From this, should we deduce that Northern Rock, less than a tenth the size of Lloyds, is seen as “too big to fail”? So what size should Lloyds be, then?

    And Red Ed, on being told something he should perhaps have known anyway, that a time limit existed, says that the current chancellor should argue against the mistakes and errors made by the last government.

    Quite.
    And they want to get the tax-payers’ money back by selling it back into the private sector?

  5. The sale’s the right call, and Balls is indeed cynically twisting this for party political advantage. 100% agreed.

    Of course, this is exactly and directly comparable to getting rid of gold reserves – economic speculation is not the government’s business, so holding surplus assets (whether bank shares or rare metals) in the hope they’ll appreciate is never worth doing.

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