Northern Rock nationalised

LONDON – The British government faced a barrage of criticism yesterday over its decision to nationalise the Northern Rock bank, amid questions over its reputation for economic competence.

Northern Rock shares were suspended, as a government-appointed trouble shooter took control of the lender, the victim of a global credit crunch which saw the first run on a British bank in over a century last September. Finance minister Alistair Darling announced on Sunday that the troubled mortgage lender was being brought into “a temporary period of public ownership” – the first official nationalisation since the 1970s.Reaction to the decision has been largely unfavourable too the govern with political parties and media accusing the government of delaying too long in trying to find a private sector company to take over the bank and its debts.Northern Rock, repeatedly accused by ministers of having a bad business model, was forced to apply for emergency Bank of England loans in September last year, when the global credit crunch hit its ability to raise funds.It has since borrowed an estimated 26 billion pounds from the British central bank, although media reports have put the actual liability to taxpayers at 55 billion pounds or higher.Darling – who has a mortgage with Northern Rock – toured the television and radio studios on Monday morning, insisting that nationalisation was the “right thing to do” and returning the bank to the private sector remained his goal.And he insisted he would stay in his post, after a weekend opinion poll suggested a majority of people want him to step down because of his handling of the affair and taxation policy.”I’m prepared to see it through no matter how difficult, how uncomfortable that may be from time to time,” he told Sky News television, rejecting suggestions that nationalisation was a gamble with taxpayers’ money.Nampa-AFPFinance minister Alistair Darling announced on Sunday that the troubled mortgage lender was being brought into “a temporary period of public ownership” – the first official nationalisation since the 1970s.Reaction to the decision has been largely unfavourable too the govern with political parties and media accusing the government of delaying too long in trying to find a private sector company to take over the bank and its debts.Northern Rock, repeatedly accused by ministers of having a bad business model, was forced to apply for emergency Bank of England loans in September last year, when the global credit crunch hit its ability to raise funds.It has since borrowed an estimated 26 billion pounds from the British central bank, although media reports have put the actual liability to taxpayers at 55 billion pounds or higher.Darling – who has a mortgage with Northern Rock – toured the television and radio studios on Monday morning, insisting that nationalisation was the “right thing to do” and returning the bank to the private sector remained his goal.And he insisted he would stay in his post, after a weekend opinion poll suggested a majority of people want him to step down because of his handling of the affair and taxation policy.”I’m prepared to see it through no matter how difficult, how uncomfortable that may be from time to time,” he told Sky News television, rejecting suggestions that nationalisation was a gamble with taxpayers’ money.Nampa-AFP