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Northern Rock to be nationalised
Northern Rock, the bank at the centre of the credit crunch, is to be nationalised in an effort to protect the taxpayers' money invested in keeping it afloat, the chancellor Alistair Darling has announced.
According to figures from the Guardian, the Bank of England has lent £55 billion in public money to the bank to date - and the chancellor has ruled out sales to two private consortiums, including one led by Richard Branson, as a way of guaranteeing the money will be returned.
Nevertheless, Mr Darling said the nationalisation was a "temporary" measure and that the bank would be returned to private sector ownership "as soon as it is right to do so".
Shadow chancellor George Osborne criticised the move, calling it a "disaster" that left taxpayers holding £100 million in mortgage loans in a volatile market.
Vince Cable of the Liberal Democrats, however, said the government had "belatedly" made the right decision.
Mr Darling also said that depositors' money was safe and people with loans or mortgages with Northern Rock should continue to make repayments.
The last companies to be nationalised in Britain were British Aerospace and British Shipbuilding, which went into public ownership in 1977.