Northern Wreck has lived up to its nickname with the spending watchdog confirming what many knew all along, the hapless bunch at the treasury weren't fit to run a whelk stall, let alone oversee the taxpayers' takeover of the Rock.
A damning National Audit Office report has exposed the monstrous cock-up, as ministers hid the scale of the bill which taxpayers were being asked to pick up.
Even the BBC's business editor and treasury moonlighter, Robert Peston, reckons the report was embarrassing for Brown and Darling as "a spotlight has been shone again on their misjudgements". Though adding the caveat: "none of which will surprise you". As if that miraculously makes it all right.
"We've known for many months that they were wrong on these very big issues," he added, cryptically.
The Orange Party is mystified as to the identify of the royal "we" to which Pesto refers.
With an election round the corner, the Tories are spitting blood over biased BBC coverage, with Cameron's warning dirty tricks would be used against them by New Labour. It seems they are already happening.
On the day the public deficit soared by £9 billion and Cameron made a key-note economic speech, the BBC evening news bulletin was blocked out with three "news items" padded out with time-filling back reporting, before Cameron even got a mention. And only then as a fag end, dropped into a long-winded report on the axing of the Motor Show.
Today the BBC is reluctantly reporting the Rock, allowing Brown to take centre stage, droning on about "doing the right thing" in what was a gross error of judgement.
The NAO found the treasury still allowed Northern Crock to lend £800 million in risky 125% mortgages for six months after it was propped up with taxpayers' cash.
And the treasury was aware of "potential shortcomings" in how to deal with failing banks as far back as 2004, when Brown was chancellor. Even the Telegraph was sounding a warning back in 2007 with this ominous profile of then CEO Adam Applegarth.
That begs the question: Why didn't the treasury demand an immediate stop to the reckless lending that got the bank into trouble in the first place?
True to form Brown's deputy Mandelson has been spinning away and reckons "saving Northern Rock, stabilising it, turning round the business as we are doing now is the right decision."
But the NAO slammed the treasury for not thoroughly checking out the bank's finances before nationalising the bank. And the report reveals greater scrutiny would have uncovered a much higher level of mortgage arrears than the Rock had previously been admitting.
Months of dithering around led to "major due diligence failures at the Treasury both before and after nationalisation" which has resulted in the bill for taxpayers being even bigger than was previously thought.
By the end of December 2008, 33% of all Rock mortgages had fallen into negative equity and with arrears mounting up, the treasury had to give it a further £3 billion financial cushion in July 2008.
Despite all the taxpayers cash, Northern Rock recently announced a loss of £1.4 billion for 2008. LibDem economic oracle, Vince Cable, branded it a disgrace:
"With billions of pounds of public money at stake, the least taxpayers should expect is that basic due diligence of the company's loan book should have taken place before nationalisation."
Often what Cable says gets lost in translation. A monstrous cock-up at the taxpayers expense is equally close to the truth.
2 comments:
What is even more shocking to me is that this is absolute proof that Brown was told of economic and bank related problems, three years before the fan spewed forth the proverbial. His claims no one saw this coming were the usual lies this man speaks.
What is even more shocking to me is that this is absolute proof that Brown was told of economic and bank related problems, three years before the fan spewed forth the proverbial. His claims no one saw this coming were the usual lies this man speaks.
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