Northern Crock costs

£182m per job

The nationalisation of the Wreck comes at quite a staggering cost, quite apart from the £100bn already thrown at the bank, we now learn that costs of another £100m will be charged for the financial and legal advice it received in the past five months while Brown and Darling dithered over the outcome. Ron Sandler, it’s government appointed chairman now has to plan to massively cut back on it’s scale of operations and downscale the number of jobs, no longer will Northern Rock be able to offer competitive mortgages as it needs to comply with EU regulations preventing state subsidised competitors. Additionally the state will now be responsible for repossessing homes as Alistair Darling said that Northern Rock would not be discouraged from repossessing homes belonging to people who fell behind with their mortgages.

“They will be treated no differently from people with mortgages with other banks”

Man in a Shed has calculated that the costs of saving the Wreck amount to £182m per employee (they are indeed expensive votes). It would have been much cheaper to give them all a £1m each as part of a settlement to close the bank.

The costs to the tax payer now amount to the equivalent of £3,500 each, tax payer’s exposure is greater than the budget for the entire NHS, and the equivalent of 27p on the basic rate of income tax.

Come to think of it, if the mortgages had been sold on to it’s competitors and the staff made redundant with in excess of a £1m in their pockets we might have seen a significant upsurge in enterprising new businesses in the North East. We may not have needed any regeneration assistance from the government either!

Instead Ron Sandler is to be paid £94,000 a month (£1m a year by the tax payer) to put half of them on the dole - doh!