Bend over Mr Taxpayer

Here comes another length up the old ring piece..

Chancellor Alistair Darling has outlined plans to convert Northern Rock's £25bn Bank of England loan into bonds before selling them to investors. The bonds would be guaranteed by the government working taxpayers to speed up a private sale of the troubled bankrupt lender.

In effect, it turns Northern Rock debt into government bonds or gilt-edged stock. However, if a sale to a private buyer cannot be agreed, the bank will come under temporary public ownership. Talk about fraud...Phew!.

That would mean the taxpayer would be exposed to Northern Rock for a much longer period than planned, for five years or longer, analysts said. But don't worry, the banks investors will make a killing.

Either way, savers' money will be protected by the government taxpayer. Northern Rock shares gained 42% after the news. Shares in Northern Rock soared by 26.5 pence to 91 pence.


Observers have said the Treasury's funding proposals could attract other suitors, now that a buyer would not have to shoulder the whole £25bn worth of Bank of England loans. Great idea, the investors make a profit whilst the taxpayer carries the debt. Oy Vay, I wonder who thought of that one....

Pip pip