Treasury official regrets slow Northern Rock nationalisation

Tim Wallace
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THE GOVERNMENT would have lost less money on the nationalisation and subsequent sale of Northern Rock if it had acted sooner, a top Treasury official told MPs yesterday.

“With the benefit of hindsight, the Treasury was slow off the mark in terms of addressing the problem,” permanent secretary Sir Nicholas Macpherson told the Public Accounts Select Committee.

“From the run on the bank in September 2007 through to nationalisation we had five months of drift. That made it likely we would lose money on Northern Rock in a way which was not inevitable when we took a majority stake in RBS,” he added.

But Macpherson rejected suggestions Northern Rock should have been shut down, pointing to the bank’s importance as an employer in the north east.