Yes, but what about us tax payers? Why should we bail out a company that has developed a failing buisness model? Your party stopped supporting British Steel and the National Coal board in the ’80s, because we (the tax payer) were being skinned. Why is Northern Rock different?

Many of us had the choice to bank with Northern Rock, many declined the opportunity. Why should we now be forced to bank with them after all, especially when there buisness model is looking very flaky, and what’s worse, on even worse terms than if we had done so of our own free will when they looked like a good bet?

JR: “It leaves us asking the reasonable question, what business mistakes or problems will the Chancellor refuse to alleviate?”

Quite. One might put the same question to the Tory economic adviser too.

Reply: The Bank (and the Chancellor by implication) assure us lending to Northern Rock is a safe thing to do. They do not therefore need to make subsidy payments from taxation to the company in the way successive governments bailed out nationalised industries.. No-one is being forced to bank with Northern Rock. Any sensible person wants stability in the UK banking marketplace, which sometimes requires Central Bank intervention, especially after a big change from easy money to tight money such as the one we have recently experienced. My view is the authorities helped create the current conditions in financial markets by keeping interest rates too low for too long and then imncreasing them substantially. They do have a responsibility to help manage the change from such easy money conditions without doing too much harm to the rest of the economy in the process.