The Rock Goes Public
I work in the Public Sector. I used to work in the Private sector. Except now the Private Sector company I used to work for is to move to the public sector after all, it appears…
Northern Rock is to be nationalised, the BBC’s business editor Robert Peston has learned.
A consortium led by the Virgin group was leading bids to run the beleaguered bank, while a management buyout had also been considered.
But ministers have decided that nationalisation - the first such move since the 1970s - was the only option.
It’s a bit of a surprise: I knew the option was there, but I’d assumed all along that the government would have preferred to go down one of the other routes. Not being a market analyst, I wouldn’t claim to know what this is going to mean for Northern Rock’s current employees, what it’s going to mean for the economy as a whole, or what exactly the nationalisation of Northern Rock will mean for customers or shareholders.
To be honest, I’m not that fussed about the shares. I didn’t qualify for any shares while I was there (I arrived about 6 months too late to qualify for staff shares), I didn’t have a Northern Rock staff mortgage (they’d stopped offering them to staff by the time I joined), so even when I was an employee I didn’t feel the same attachment to the share price that others did.
But I do have concerns over the Northern Rock foundation: a charitable trust that has donated a percentage of Northern Rock’s profits to benefit projects across the North East: helping preserve bits of Roman heritage and so on. It’d be a shame to see that go.
Best of luck to all the staff and their families; they are the ones I feel sorry for. So when you hear over the next few days, shareholders worrying that they’re not getting every last penny that they feel entitled to, think instead of those people who don’t really know if they’re going to have an income to pay their own mortgages.
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Erm how come the BBC have forgotten about Railtrack?
I also took exception to their sensationalist “government will now be responsible for millions of savers and mortgages”, erm… unlike National Savings or NS&I as it seems to be called these days.
The worst part of it all is that Ron Sandler is being put in charge of it. He’s the one who came up with the stakeholder pension…least successful product initiative in financial services ever.
The government can’t even run themselves let alone a commercial organisation.