One of the most insidious of crimes committed by the Thatcher government was the privatisation of the building societies (Feature, Socialist Review, February 2008).
For over 100 years these bodies provided cheap mortgages and good savings opportunities for the working class. The reason for this is that they were mutuals, where all savers and borrowers were equal owners of the building societies.
The crisis at Northern Rock occurred because this former building society switched to a business model which involved borrowing short term on the money markets while lending for up to 30 years on mortgages. Any student doing GCE Economics should recognise this was a very risky strategy.
The belated government nationalisation of Northern Rock is likely to end up costing the taxpayers tens of millions of pounds, all because Brown was reluctant to be seen to return to an Old Labour policy. In 1972 when Rolls Royce faced bankruptcy, the then Tory prime minister, Edward Heath, had no hesitation in nationalising the firm.