I am a businessman by background. I have occasionally bought or sold companies. Never have I been asked to buy a company with so little information available on its assets, liabilities, past and possible future performance as today, when the government wants me to approve the purchase of Northern Rock for taxpayers. Never have I been asked to put my name to such a huge commitment before – placing the taxpayer at risk for more than £110 billion.
They will not tell me how much they wish to pay for the shares. That will be decided after they have announced the purchase and legislated for it! This is not the usual negotiating procedure between buyer and seller.
Because they are compelling sale by the shareholders, they leave taxpayers open to lawsuits. I doubt they will tell us how much of a risk that is, nor will we be given their legal advice to make our own decision about how likely a successful legal challenge for compensation might be.
We will not be told what is the true state of the mortgages that are the banksâ€™ main assets, and we will not be given a schedule of either assets or liabilities. There will be no accountantâ€™s reports, no assessment of the term structure of the loans and assets, and no commentary on the likely movement in the bad debts.
We will not see management accounts for the last year, and we will not have budgets for the next couple of years. We will not even be told what the general outlines of the business plan might be, because they are awaiting clearance from Brussels for how much new trading they can undertake. They will have to be careful about what the bank can offer in the marketplace, as its privileged access to public money leaves it open to allegations of anti competitive trading if it gets the offer wrong.
We will not be given a report on the size of the deficit in the pension scheme and how that has been calculated, nor will we be warned that the pension deficit might be about to get larger in the light of recent regulatory and actuarial comments on how people are all living much longer than has been allowed for in many a pension fund calculation.
There will be no environmental report on the properties with an assessment of risk under Environmental regulation, which any purchaser would need these days. There will be no property report about the leases and freeholds, and the lease and maintenance obligations.
We will not see the main contracts of the very expensive senior staff to be able to review the bonus arrangements and to see how much it will cost taxpayers if we need to terminate some of their employments. We will not receive a Human Resources report on pay, morale and efficiency of the workforce we will inherit.
There will be no survey of customer attitudes or study of the value of the brand post the disturbing changes to it in recent weeks. There will be no report on the relationship with the Trust, on the ability of a public enterprise to sponsor one particular football team or on the extent to which a nationalised company can continue the social and community work Northern Rock performed in its profitable private sector days.
In sum, Parliament will have none of the usual information directors would require as matter of course from acquiring management and their advisers before consenting to an acquisition. Perhaps for that reason Parliament is once again being railroaded and sidelined by the government. It is a farce to allow only one busy Parliamentary day to consider all stages of the Commons procedure for this bill. It means we have had no normal time to read the Bill and table amendments, and if we had there will be insufficient time to debate them. This is rushed debate on a botched nationalisation by a government which has not done its homework. The taxpayer is being put into a deal without knowing the price or the long term risk and cost. Ministers tell us all that taxpayers are risking is guarantee. Not so Ministers – the taxpayer is now liable for every broken window in a branch, every severance and pension payment, every mortgage and loan. If the assets cannot cover the cost of these things taxpayers will have to pay more tax to sort it out.