Skipton Financial Services managing director Simon Holt wonders how the Government will support two financial organizations – Northern Rock and National Savings & Investments.
He says: “We have two institutions that are now backed by the Government – how will they compete? How will the justify different rates, for instance?”
Holt says from the savers’ point of view it has got to be a good thing to be nationalised as they have said their first priority is the security of the savers’ deposits.
But he says this has to be a worrying time for shareholders, who will be looking for them to create real value.
Holt says: “Mr Darling has said the bank will be put back into private hands but we have no way of knowing when that might be.”
Positive Solutions chief executive Jim Reeve says: “It has taken so long and so many different options to try to manage Northern Rock – this is a very unenviable position for everybody.
“There is a clear concern by the Chancellor and the Government that maybe Virgin could cause too much upset and not present enough commitment to the repayment of public debt. It seems they do not want to go to private ownership with some people making a killing off the back of public money. Maybe we will see the Virgin offer amended though.”
The chief of the Newcastle-based firm says the staff losses are always the saddest part of a situation like this.
He says: “From the North East perspective, there are so many jobs here that will now be at risk. I feel sorry for the staff.”