Government donating to Northern Rock?

Question

How is it that the government can find the money for Northern Rock, but when it comes to investment into our hospitals and schools then there is no money availble, is this selective investment to safe guard the share holders and saving the banking system in the UK ? surely its better to invest monies into the health and education and less of a risk than putting this money into a failing bank ?

Answer 1

while the government are thinking of all sorts of ways to help northern rock the victims of the farepak collapse werent so lucky.

this time last year many poor but hard working people who'd managed to save a couple of hundred quid lost the lot.

even allowing for the housing market to continue falling for the next few years northern rock still has worthwhile assets and is a bargain for someone in the queue of vultures to pick up at a knockdown price.

while health and education are desperately underfunded the government doesnt have any trouble finding the money to bale out badly managed banks and pay for a pointless war in iraq.

Answer 2

The UK Treasury are backing Northern Rock right up to the hilt to the tune of about £950 per head of the UK population. In other words, the same sum as above of your taxes this year, has gone to keep Northern Rock afloat.



In reality this is chickenfeed.



What UK.gov want to avoid is a run on the banks. Scared little middle class rich people ran to the nearest branch of their Northern Rock bank and waited in line like lemmings to draw out their wonga.



Just how daft is that?



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Answer 3

True it is due to the fact that Gov do not want a run on the banks, but why should the Tax Payer pay for it? I run my own company and because of that I pay more taxes and get less for it, and the banking system quite honestly takes the micky out of S.M.E's in the UK, I would like the gov to sell the Northern Rock, not Nationalise it as some have suggested on BBC this morning, look what happened to the GPO!!!

Answer 4

The consequences of allowing Northern Rock to collapse could have been even worse. Banks are different, it's not like a chain of shoe shops closing down. One bank going down can take others with it risking a collapse of the banking system, which Britain (the city of London) earns a great deal of money from. As already said by Stephen M, pretty much a no win situation.

Answer 5

Every year the banks boast about how much profit each of them makes, but what happens to all this cash which is in the uncountable billions? Why is it the taxpayer has to bail them out, but they can't find the cash to give the old age Pensioners a fair pension?,

Answer 6

The government is not donating money. The government has given permission to the Bank of England to release reserves. These reserves are then used in the form of a loan to Northern Rock. They will have to be paid back.

Answer 7

They are probably donating because there are a very large number of labour party electors living in the area in which the bank is based. Also how many of their MPs have mortgages or savings with this bank?

Answer 8

Simple really, shareholders (particularly the sort of small shareholders that are typical of the ex building societies that went public) are voters. Dead patients don't vote & children at school are too young. Another cynical ploy by new Labour to convince us that they are in tune with commercial interests and aren't old style socialists.

Answer 9

There is money in the NHS it's just not managed well if they get rid of the money grabbing pen pushers there would be a mass of money to spend in the NHS.