Darling ‘incompetent’ over Northern Rock loan
December 1, 2007
In a recent showdown in the Commons the Chancellor of the Exchequer, Alistair Darling, was branded ‘incompetent’ by the Tory shadow chancellor, George Osborne.
The harsh speech from the shadow chancellor was over the loan that Darling authorised to stricken bank Northern Rock from the Bank of England. Osborne accused Darling of acting in secrecy and keeping this vital information from both the unsuspecting taxpayer and from parliament.
According to Darling the way in which the Northern Rock emergency loan situation was handled was normal operating procedure for the Bank of England. He added that he was completely right in granting the loan to the Rock, and said that it was not done in secrecy but that there was no point in making it public due to the panic that it may cause. He stated that the loan had been secured against Northern Rock’s assets, but Osborne said that he had harmed the public purse and had misled the public.
In his speech the shadow chancellor stated: ‘This is a tale of incompetence and weak leadership from a government that now reels from one disaster to another. We have a Chancellor who made loans he kept secret from Parliament. We have a Chancellor who has made guarantees to the taxpayer he cannot be sure of honouring. And we have a Chancellor whose weakness is contributing to the instability of the financial system. That is why we have a Chancellor whose job is on the line.’
After the loan was made public knowledge Northern Rock saw its share prices plummet, and became the first victim of a run on a British bank in almost a century and a half. Over £2 billion in savings was withdrawn from the bank in the space of a few days by worried savers who were concerned that the bank was on the verge of folding.
Alan Wright
1st December 2007
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