Will the £110 billion that is said to be the current exposure of the Taxpayer to Northern Rock prove in due course to be the biggest election bung ever for an election that never happened? And should we be looking more carefully at the events of September 2007 as to how the partisan electoral calculations of Gordon Brown have left us thus exposed?
By the time the crisis arose all the signs for a snap Labour election victory were propitious: Gordon Brown and Labour were riding high in the polls, high enough to suggest a win with a good working majority in Parliament.
One is bound to wonder, therefore, if the rescue package that was arrived at in mid-September was the best one that could have been achieved in the circumstances or whether one that was ultimately more likely to succeed but which involved immediate, but electorally damaging, job losses and branch closures especially in the Labour heartlands of the North-East could have been put together.
Speed can very much be of the essence if such crises as these are to be nipped in the bud. Delaying for even a day can be fatal. One wonders how seriously an immediate sale of the business to another Bank was pursued, one that may have involved politically sensitive contractions in jobs unpalatable to an electorate but commercially sensible nonetheless. Or was the decision taken to apply huge sums of public money to Northern Rock at that moment designed to keep it intact long enough to get Labour over the hump of an autumn general election and allow Brown and Darling to continue to present themselves as economically competent?
And if that is what lay behind the decision to keep it afloat on a veritable raft of taxpayer’s money, was the result that, with every passing week, Northern Rock in fact became a less and less attractive prospective acquisition to mainstream financial institutions leaving only speculative quick-buck merchants in the game whilst the exposure of the taxpayer rose by billions every week?
If one thinks for a moment about the calculations that were ongoing in the Brown camp for an autumn election, which must have involved consideration of a 2008-2009 downturn in the economy of which Northern Rock was a clear harbinger, it is not difficult to see why they would have opted for a solution that would preserve as much as possible of the status quo, so that it could be presented as a ‘steady as she goes’ sort of crisis with a skilled helmsman and experienced navigator at the helm of the UK economy. After all winning is everything to Labour, regardless of any considerations whatsoever for the National Interest.
In the event the banking big boys seem to be conspicuous by their absence from the list of serious suitors since October 2007 when Brown announced the election that never was. Northern Rock has become a less and less attractive proposition with every week that passed, leaving only speculators such as Branson who hoped to buy at fire-sale prices and sell on at whacking profit in the game.
Finally Labour bit the bullet and Nationalized it but not before our exposure to its downfall had risen to a potential sum the size of our annual NHS budget (and three times the Defence budget).
As I ask at the outset, could that be the biggest election bung in history, bunged for an election that never happened?
One hopes we never have to find out for sure.