$200000000000 Questions…

“Would you describe the nationalisation of Northern Rock as a rescue, as saving it or as a salvage job? For the record, something sal-vageable is capable of being used or re- constructed in spite of being damaged, but is unlikely to have been improved by the experience.

So why save or salvage NR when there more than 140 other mortgage len-ders in the UK market? It was only unique because it was badly run.

And how can the government justify saving NR – a private institution with just a few branches – at the same time as it is closing 2,500 post offices?

Keeping those post offices open would cost a fraction of the Rock salvage package, and the number of post offices for the axe roughly equates to the number of building society branches in the UK.

But perhaps more important than the number of outlets for the chop is the fact that many post offices serve elderly populations in remote communities who, in Labour newspeak, will be financially excluded as a result of closure.

I suppose the Bipartite Authority which comprises Messrs Darling and Brown – they seem to have replaced the Tripartite Authority of a chancellor, a knight (Sir Callum McCarthy) and a King in the Rock salvage department – might argue they don’t need post offices anyhow.

Punters can get a better deal from a state-guaranteed NR account than from a state-guaranteed National Savings & Investment product – and post offices do mortgages too. Thus, knocking 2,500 post offices off the map will reduce the competition very nicely, thank you.

Which neatly brings me to my next question – how can there be a level playing field in the mortgage market when a state-backed bank under pressure to repay taxpayers competes head-to-head for business with the private sector in a shrinking market?

The situation is all the more fraught because of the collapse of confidence among residential mortgage-backed securities investors and the capital markets generally. The shortage of mortgage funds is impacting across the board, but especially in the specialist sector where NR was a substantial play-er (see Analysis, page 21).

Penultimately, why has the focus been on salvaging NR when the bank’s failure to perform is but a symptom of a more serious condition – a market failure that has yet to be tackled?

It has taken a long time for the bipartite authority to cover virtually no distance and spend millions getting there. Given the half-year timescale, why did they not have all the answers about nationalisation in place when they brought forward legislation to take NR into public ownership? To say “”Trust me”” isn’t good enough. And so to my final question – why exercise all that time and use all that money to relaunch a failed enterprise when the state of the market is the real issue?

What’s worrying is that Darling and Brown’s solution to the lesser of two problems raises more questions than it answers. But I suppose there’s a slender chance that by saving NR they will salvage their political careers.”