‘Public should not have to pay’

By Joel de Woolfson

UK TAXPAYERS should not have to support Northern Rock, finance workers said yesterday. While they took their lunch yesterday, the Guernsey Press asked for their views about the nationalisation of the struggling bank.

That means Northern Rock’s Guernsey subsidiary is also now owned by the UK Government.

Steve Bougourd, who works for Julius Baer Trust Company, had no problem with the Government owning a bank in the island but did not think it was fair on taxpayers.

‘From the UK taxpayers’ point of view, why should they have to bail out a private company?’ he said.

‘On one side of the coin, the Government should not be underpinning a private business but on the other side, you have to protect the reputation of the banking industry.

‘You can’t have people queuing up outside the bank. I think the Government was between a rock and a hard place - no pun intended.

‘I don’t feel sorry for the shareholders because they know there is an element of risk when you invest,’ he said.

‘But you just cannot have a failure in the banking system.’

Another finance worker, who asked not to be named, agreed that it was unfair on the UK taxpayer to expect them to support the bank.

‘The Government now owns Northern Rock, which means the public own Northern Rock,’ he said.

‘What will happen if anything else goes wrong? I don’t think it’s a good situation for the Government.

‘I do think it’s very strange that Labour is now running a bank that has a business in Guernsey, especially when that government doesn’t like Guernsey much.’

Peter Creed, also in finance, said he had sympathy for the shareholders.

‘It’s an amusing situation, but it is a subsidiary so I suppose it’s natural that if the Government takes on one it takes the other as well,’ he said.

Trust administrator Ian Clarke did not think the UK Government’s involvement would have any effect locally.

‘I suppose it may not sit to comfortably with them that Northern Rock has an offshore company, but I don’t think it will make a difference in the day-to-day running of the bank,’ he said.