Northern Rock: My Letter to George Osborne MP
Posted in Uncategorized on February 23rd, 2008Dear Mr Osborne,
I am writing today to urge you to go more on the offence against Mr Brown and Mr Darling over Northern Rock.
It is my fervent belief that Labour is going to completely destroy this company and would be further outraged were this not to be the catalyst for getting that load of schysters out of power before there’s nothing left of our reputation and economy.
The government appears to have lost sight of the fact that 75% or Northern Rock employees were shareholders. Northern Rock was a model employer, its employees took part in Share Save and were rewarded well with bonuses all of which meant that many had holdings in the 10s of thousands of pounds. The capital gains tax regulations would have made it extremely difficult for the employees to dispose of these shares at the “right time” finding themselves locked in for taper relief.
These same employees, now completely wiped out by Nationalisation, no-doubt share the same sentiment as every other Northern Rock shareholder - that the Labour government played no small part in the companies down-fall.
These same employees are now those the government will be relying on to help rebuild the business. Not exactly a formula for success.
The Labour party has a history of contempt for shareholders. During the Railtrack years shareholders were despised as “grannies” and these days we are derided as “speculators”, “carpet-baggers” and “bottom feeders”.
The shareholders of First Group were congratulated by a cross-party group of MPs in 2006 for “the innovative use of their shareholdings to raise the issue of FirstGroup’s violation of basic human and labour rights at the company’s annual general meeting on 13th July” - so there appears at-least some evidence that shareholders have capacity for good.
The fact is, as I would fully expect a Conservative to appreciate, that shareholders are the life-blood of capitalism… we provide the capital that creates business, wealth, jobs and innovation. We are card-carrying capitalists, even the little old grannies.
So it should perhaps be no surprise then that New Labour are torn between the two ideals of (new) Capitalism and (old) Socialism. They are forced to endure Capitalism in order to govern this Nation, however if their handling of shareholders both through Railtrack and Northern Rock is anything to go by then one must conclude they have still to reconcile their beliefs fully.
If I may draw your attention to what the Times said on 17th July 2005:
“Compensation is normal when democracies nationalise private firms. Gordon Brown’s Treasury refused to acknowledge this. Its memos oozed contempt for ordinary citizens. It apparently hoped that by manoeuvring Railtrack into bankruptcy, it could get Railtrack for nothing. And this from a man who last month lectured African governments on their probity.”
[http://www.timesonline.co.uk/tol/comment/article544925.ece]
So to the purpose of this letter. I recall how effectively Theresa May MP crucified Mr Byres during commons debates over Railtrack. I have seen no repeat of this from the Conservative party over Northern Rock. The attempts from yourself and Mr Cameron have been rather pathetic to be honest.
I think there is much political capital left in Northern Rock.
I hope your party will take up the battle for shareholders property rights, and not allow the government to attempt to repeat the Railtrack scenario again. I see they’ve learned at-least some lessons from Railtrack having slapped in an FOI exclusion this time.
Having the independent [sic] assessment fixed by terms which mean shareholders will be offered nothing will serve only to drag everyone through expensive legal proceedings to neither the benefit of the taxpayer nor the shareholders.
It is my belief that the failure of the tripartite authorities and the disclosure of the LOLR facility played no-small role in Northern Rocks collapse, and I am certain a truly independent review would reach the same conclusions. As such I hope your party will be pressing for such an independent review of the situation to be led by members of professional and non-government associated organisations, this means no organisation who receives a significant amount of their revenue from government work should not be involved. The British Bankers Association and Bar Association would be high on my list.
I include below a copy of a letter sent recently to the Chancellor from my self.
Kind Regards,
Gerard Calderhead

