Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page:

From The Socialist newspaper, 29 November 2007

Northern Rock scandal

Nationalise the banks!

NORTHERN ROCK, the UK's fifth biggest mortgage lender, went into financial meltdown when it was forced to call on emergency funding from the Bank of England in September, sparking the first big run on a British bank in 140 years.

Elaine Brunskill, Newcastle Socialist Party

The latest twist in the bank's saga is that the consortium led by Richard Branson's Virgin Group is being picked as the bank's preferred bidder. The Virgin deal is being dressed up as a step forward for the 6,500 Northern Rock staff who have had a dark shadow over their jobs, and for the small investors who have seen share prices plummet.

Branson has said that "pretty much all" jobs will be guaranteed. This is a vague promise, which like a pie crust will be easily broken.

The bank and government are reportedly going to say there is no alternative to Virgin, other than the bank going into administration. No doubt Branson and his consortium will be rubbing their hands in glee at picking up Northern Rock at a knock-down price, after the bank has been bailed out by public money.

The guardian recently further exposed the bank's murky finances. Local branches were ruthlessly closed down and replaced by internet banking. Fewer branches meant many people moved their accounts and the bank lacked savings. To secure finances for new mortgages, alongside relying heavily on money markets, the bank parcelled up existing mortgage loans and sold them on. 70% of Northern Rock's mortgage assets were squirrelled away to an offshore company.

Granite, that owns 53 billion of Northern Rock mortgages, "is ultimately owned by Law Debenture, a Jersey-based trustee, but controlled by Northern Rock". Yet chancellor Alistair Darling and Bank of England governor Mervyn King handed out an emergency loan of 23 billion.

Surely anyone with half a brain would check out the assets of a company first!


While Northern Rock workers and small investors face uncertainty, the bank's former chief executive, Adam Applegarth, has ensured himself a rosy future. He received a 1.36 million salary and bonus package last year and also got 1.6 million from cashing in shares. The shenanigans of such super-rich individuals need to be scrutinised, not by parliament or select committees, but by representatives of the workers whose jobs are at risk.

The Northern Rock crisis is not just a case of one rotten apple in the barrel. The whole capitalist system which banking operates in is rotten to the core. No doubt many Northern Rock workers are looking anxiously at the US financial sector, suffering its worst year for job losses on record. As a direct result of the US subprime mortgage crisis, on and off Wall Street 130,000 finance jobs have been axed this year.

Whilst the government and Northern Rock bosses have hatched up plans to turn Northern Rock over to Virgin, many serious economists have recommended temporary nationalisation. Prior to the Virgin announcement even the pro-free market Economist stated that "nationalisation looks the best choice of a bad lot".

Nationalisation is certainly necessary. However, in order to make it the best case scenario for bank workers, small investors and for public money, it must be permanent, under democratic workers' control and management, and must include the whole of the banking system. Furthermore, compensation should only be paid on the basis of proven need why pour money at the fat cats who have creamed the banks at the expense of workers?

Ultimately, only by running the banks in the interests of the whole of society, as part of a socialist planned economy, can workers' futures be guaranteed.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.

In The Socialist 29 November 2007:

Northern Rock scandal: Nationalise the banks!

Environment and socialism

Stop the ruin of our planet

What we think

Mass scrutiny needed to protect our rights and privacy

Data loss - no surprise to HMRC staff

Socialist Party NHS campaign

NHS - new 'surplus' but problems continue

Demo shows support for victimised nurse

Socialist Party news and analysis

QinetiQ sell-off

In brief: Who safeguards safety?

Socialist Students

Fight to save the NUS!

Students protest at Griffin and Irving

Exeter students gain anti-fascist victory

Kick the BNP out of Northumbria

Nigerian students detained

Defend students from victimisation

Che Guevara meetings

International socialist news and analysis

Brazil: An explosive brew in land of contrasts

Australia: Howard disappears under a Labor party landslide

France: Transport strikes suspended

Scotland: Solidarity conference

Marxist analysis: history

Preparing a revolution and its party

Workplace news and analysis

Communication Workers Union ballot

Teachers need a fighting union leadership

Construction bosses found guilty

In brief


Home   |   The Socialist 29 November 2007   |   Join the Socialist Party

Subscribe   |   Donate  

Related links:

Banking crisis:

triangleBarclays finally charged for having hands in till

triangleLessons of the 'N30' 2011 pension strike

triangleWaltham Forest Socialist Party: The banking crisis

triangleRotten greedy banks still threaten crisis


triangleHousing crisis: Corbyn's positive measures blanked by Labour's right

triangleThem & Us

triangleDefuse the consumer debt time bomb: nationalise the banks!

Northern Rock:

triangleTories flog bank assets to hellhound US profiteers

triangleThem & Us

triangleNationalise the banks


trianglePowerful picture of the Port Talbot steel workers' struggle

triangleTories torn - bin them now


triangleCapitalism gambles with our lives

Reports and campaigns

Reports and campaigns


North West

Arriva North West bus drivers strike over pay


Democratic rights

Conference on state spies: who's watching who?



Striking back against sackers' charter at Leeds Uni


Royal Mail

Royal Mail bosses block strike - back postal workers



Balloting members on the pay cap



'Dazzling' Bad Art show points to socialist future



Sheffield Labour council threatens peaceful protesters with prison


South West Wales

Hundreds turn out for rally aimed at removing west Wales Tory MP



Uprising to save the NHS!



Can you donate to the Socialism 2017 appeal?


East London

No cuts - hands off King George A&E!


North London

North London hospital workers fight cuts and job losses



Nationalise to save jobs at BAE Systems



Schools "can't go any further" - stop the cuts: set deficit budgets now



Socialist Students 'welcome' Hillary Clinton to Swansea

triangleMore Reports and campaigns articles...

Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party

triangle19 Oct Arriva North West bus drivers strike over pay

triangle18 Oct Russia, October 1917: When workers took power

triangle18 Oct Tories torn - bin them now

triangle18 Oct Royal Mail bosses block strike - back postal workers

triangle18 Oct Balloting members on the pay cap

triangle13 Oct The end of the Tories?

triangle11 Oct Nasty party out the Tories

More ...

triangle21 Oct Birmingham: NSSN Solidarity Forum

triangle23 Oct Chesterfield Socialist Party: The continuing struggle for abortion rights

triangle24 Oct Liverpool Socialist Party: The October Russian Revolution 100 years ago to the day

triangle25 Oct Salford Socialist Party: The October 1917 Russian revolution

More ...

Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube



October 2017

September 2017

August 2017

July 2017

June 2017

May 2017

April 2017

March 2017

February 2017

January 2017





















Platform setting: = No platform choice