Northern Rock debacle and cover-up (update)

Further to this post earlier today, there have been developments. The Daily Telegraph's original post can be seen here and their story reporting that "Northern Rock has failed in its attempt to win an injunction against The Daily Telegraph after this newspaper revealed details of the sales document sent out to prospective bidders." can be seen in full here. The Telegraph reports that "The beleaguered bank, which has borrowed about £20bn from the Bank of England since September, hired law firm Schillings to additionally attempt to make The Daily Telegraph reveal its source for the article. It also wanted this newspaper to remove the article - published last Thursday - from its website, arguing it contained confidential information." On the case, the Telegraph reports that "In a high court hearing yesterday which Northern Rock attempted but failed to keep private, its lawyers applied for an emergency injunction to force The Daily Telegraph not to repeat any details of the memorandum, which refers to Northern Rock as Blackbird and calls the plan to sell it Project Wing. David Price, acting for The Daily Telegraph, told the court: "It's a strange argument that something published in The Daily Telegraph on November 8 has suddenly become confidential." Mr Justice Tugendhat said it would be "futile" to prevent further publication of the article on the website. The judge granted a temporary injunction against another newspaper revealing further details from the information memorandum until he has had time to consider whether it breaches Northern Rock's confidentiality.".

You should read the Telegraph's original article as the government are using our money to prop up this bank.

It would appear that the original memo appears from time to time on the web, if you want to read it I am sure you could find it.


UPDATE:
From Anatole Kaletsky in The Times today:

"These proposals, published in yesterday's Financial Times under the terms of the limited injunction, include three astonishing “assumptions” - a better word would be “presumptions” - about government support. The first is that the Bank of England's £20 billion line of credit, instead of being repaid in February, would continue until 2010 - at least to the tune of £6 billion. The second is that the interest on this line of credit would be reduced despite Mervyn King's insistence that Northern Rock must pay a “penal” rate for its support. The third is that, in the event of a break-up, the Government would keep a lien only on Northern Rock's riskier assets, allowing all the most secure mortgages to be sold off to private bidders, while taxpayers took their place at the end of the creditors' queue.

Do these proposals still sound too technical and arcane to justify my accusations of attempted larceny and extortion? Then consider the more politically explicit version published in The Guardian under the headline “Taxpayer may lose £2 billion in bank rescue”. According to this story, potential private sector “rescuers” are not just demanding a lower rate from the Bank of England but pressing the Government to waive completely the interest bill on its £20 billion loan.

They are highlighting “the benefits of a bid for the job prospects of the bank's 5,500 workers in Newcastle and Sunderland... Alistair Darling is well aware that Labour has a majority of seats in the North East and needs to protect them ahead of the general election”. Mr Darling is also being told that if he has the temerity to demand payment of the interest due to the Bank of England for the Northern Rock bailout, the Government could face “accusations of profiteering which are unlikely to play well with MPs in the affected constituencies”."

Read the rest but be ready with the mouthwash to take away the sour taste that the revelations will leave in your mouth.