Is Darling right to give a government guarantee?
The news within the past hour that the government is to guarantee the deposits of all savers in Northern Rock will be a massive relief to those who have got their savings tied up in the former building society turned plc.
But is it the right decision? Should it be the government’s job to step in to safeguard people from their own investment decisions? Will it be setting precedents for the future?
There’s always a challenge when major events take place during September because of the political conference season. Issues can develop during this month that might find it hard to gain prominence on the same scale at other times because of the party gatherings. Thus today there’s been a lot of focus on Vince Cables’s attack on the government at the Lib Dem conference.
Financial institutions have gone thorough rough waters before and those who had their pensions tied up in Equitable Life might feel a bit sore this evening that there was no Mr Darling when that organisation got into trouble.
Fifteen years ago I lost out badly when a company I had previously worked for went bust taking its pension fund with it. I got out just a fraction of the Â£50,000 at 1991 prices that I had put in.
Clearly the nightly scenes of the queues outside Northern Rock branches was going to have a political impact some way a long the line. Of the latest polls the fieldwork for one from ComRes is almost a week old while only a small part of the YouGov responses would have come after the crisis developed.
If ever a 2007 election was being contemplated, which I very much doubt, then surely this will end it although Roger on the previous thread reckons “…very good move by Darling and it will all be forgotten by Friday.” I’m not so sure.