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From: The Socialist issue 879, 18 November 2015: No to terror, war, racism

Search site for keywords: Northern Rock - US - Tories - Banks - Mortgages - Gordon Brown - Sub-prime - George Osborne - Debt - Bankers

Tories flog bank assets to hellhound US profiteers

Tom Baldwin

The Tories have sold off another 13 billion of public assets to a US private equity firm. This time it was mortgages from failed bank Northern Rock, bought as part of Gordon Brown's bailout of the banking system.

Chancellor George Osborne is hailing this as a success because the mortgages have not been sold at a loss. This is certainly an improvement on previous sell-offs. But overall, the taxpayer has made a big net loss on Northern Rock.

Loss

The privatisation of Royal Mail and the sale of RBS shares earlier this year also made a loss of over 1 billion each. This shattered Osborne's portrayal of himself as careful guar-dian of the country's finances.

It will likely not prove a good deal for mortgage holders. Cerberus, the casino-capitalist buyer named after the three-headed dog which guards hell, has a record of tough enforcement of any breaches of contract. Described by one property developer as "ruthless, unjust and unreasonable", it specialises in risky or 'distressed' assets.

Greedy, speculative behaviour by finance firms was a big factor in the financial crash in the first place. Banks sold 'sub-prime' mortgages - where homeowners would have problems paying them back. So the loans the banks thought would be earning them money were actually worthless.

The then-Labour government rescued the banks by buying up this bad debt, at huge cost to the taxpayer, fully expecting to hand it back to the bosses when it could make them money again. The Tories have dutifully carried out this programme.

The Socialist Party said at the time we should not have just nationalised the debts and let the bosses keep the profits.

We fight for whole financial system to in be in public hands, not the hands of these private sharks. Run finance under democratic workers' control to serve society's needs, not just inflate a few bankers' bonuses.

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Article dated 18 November 2015

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