Northern Rock needs to be rescued not nationalised, states Cameron

The government has recently announced possible plans to nationalise troubled mortgage lender Northern Rock. The lender enjoyed a reputation as the nation’s fifth largest mortgage provider until last summer, when it became the first victim of a run on a British bank in nearly 150 years. This occurred after it became public knowledge that Northern Rock had taken a multibillion pound emergency loan from the Bank of England.

However, David Cameron, leader of the Conservative Party, has stated that nationalisation is the wrong move, and that the government should take steps to enable the Bank of England to reorganise the bank rather than have it pass into public ownership. He has added that if the issue arises in the House of Commons his party will not vote for the mortgage lender to be nationalised.

Cameron stated: "We don’t think nationalization is the right answer. They should be looking at other sorts of structures, such as the Bank of England acting as the restructurer of Northern Rock. It’s not right to rule out administration or other options.” He also stated: "It’s very, very difficult to see any circumstances in which nationalization can be justified. It sends a terrible message overseas, and it lands taxpayers with all sorts of potential problems.”