Another open letter to Ronnie Campbell MP

Dear Ronnie,

I'm a Northern Rock small shareholder whose shares were obtained on privatization by virtue of being both an investor in and having my mortgage from Northern Rock. As such, they boosted my retirement plans, as did the dividends during the good times, and were valued at upwards of £10,000 at their peak. Consequently, I feel aggrieved at the manner in which the Government has handled this matter and has now arranged for the 'independent' valuation of the shares so that any compensation is likely to be close to zero. Since the re-structured company is paying back all Government loans (with interest) and since ultimately, according to Gordon Brown, Northern Rock may well be returned to private ownership "at a profit", why not return the newly profitable company to its rightful owners, the shareholders, at the appropriate time.

The "Rock" continues to attract criticism for its mortgage lending policy, but this was not very different from numerous other lenders at the time. The "Rock" management had the foresight to recognise an emerging credit problem, soon to be faced by all banks, and seek assistance via the regulatory authorities. Other European banks were allowed to borrow "anonymously" from the European Central Bank while the "tripartite authority" tailed to organise routine inter-bank support for the Northern Rock, which, helped by leaked information and meddling from the media, precipitated the infamous "run" on the bank. After Northern Rock were refused a £2b loan initially, the Government's "Special Liquidity Scheme" subsequently has had to provide multi billions of pounds in facilities for rival banks. Ironically, it turns out that the quality of Northern Rock's mortgage book is better than that of most of these rivals. I wonder if a bank based in the Home Counties would have been allowed to go to the wall in the way we have seen with the "Rock"?

Having retired two years ago, I hope that my advanced planning will enable me to withstand the current economic downturn, but the Northern Rock shares were certainly meant to be a substantial plank in the whole structure and influenced the early timing of my retirement. Like many other ordinary people, homeowners, investors and Northern Rock staff, who are the real losers from the failings of the "tripartite authority", I feel strongly that we deserve a better deal. I feel that Northern Labour MPs could present a united front and be more vocal in their support for the people in the North East. I hope that you can reassure me on this point.

Yours sincerely,

Another Cramlington Constituent