OPINION: Branson bid will take the heat off Labour

Apart from Labour voters in the North East of England, few people will be affected materially by what happens with Northern Rock. That said, the way the Government flogs it off will matter hugely in PR terms.

Charlie Whelan
Charlie Whelan

Most people realise that the bank run was not the Chancellor's fault and had much to do with an obscure credit crisis in the US. Northern Rock has been saved by the Bank of England and the Treasury, and people now focus on how much taxpayers' money is at risk.

As luck would have it, though luck probably had nothing to do with it, Richard Branson has been on the Prime Minister's trip to China and India. Some in the media may carp about 'secret deals' but most punters would be delighted to see Branson take over Northern Rock.

Virgin is a great brand and is so because Branson knows how to run a successful business. Just ask anyone travelling on his trains or flying across the Atlantic on one of his planes.

I first met Branson the night Labour won power in 1997. He was so happy to have a new dynamic government that he kissed my shoes, though it has to be said that Labour's victory probably wasn't the only reason - a little celebratory drink may have helped. He has been close to Labour ever since and that relationship may help him launch his Virgin bank out of the old Northern Rock.

But Branson knows that now the Treasury has reopened bids on the back of its clever bonds scam, others will join the takeover race.

This is exactly what the Chancellor and Prime Minister wanted. When big banks such as RBS and Lloyd's make bids it will be easy to 'sell' the takeover as a private one and not the 'nationalisation' that Gordon Brown has been avoiding at all costs.

It is a great relief for Labour, then, that the Liberal Democrats are the ones proposing nationalisation, although it is probably illegal under EU rules. Vince Cable may have made all the running as temporary Lib Dem leader but he will be losing media support with this left-wing line.

The Tories aren't in much better shape as David Cameron found out last week when challenging the Prime Minister on Northern Rock at Prime Minister's Questions. The problem is that the Tory policy seems to change from day to day. The official opposition must come up with a workable alternative to the one proposed by the Treasury.

The Northern Rock story isn't over, but with Branson and his PR machine looking to take over, the Government can relax a little.


Email: charlie.whelan@haymarket.com  

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Already registered?
Sign in