Rock and a hard place?

I don't understand why people are attacking the decisions taken over Northern Rock. Yes, I think that it was appalling that because we are in the EU the Commission wouldn't let the Bank of England organise a quiet deal with big banks which would have meant that the run on the bank wouldn't have happened.

The Government has spent no money - repeat, spent no money - on Northern Rock.

When you get a loan from a bank they charge you interest. They make money from you. The Bank of England has extended a loan at a penal rate to Northern Rock. Northern Rock will pay the loan back in full, plus the interest payments, over time. So, like Natwest would benefit from loaning money to someone, the public finances will benefit from this.

The interest rate charged to Northern Rock will be above the market rate.

So when David Cameron was just bawling out Gordon Brown asking him how much the tax payer will be paying for Northern Rock, the Prime Minister wasn't not answering, because it was a question by someone who doesn't seem to understand how loans work. Which is not surprising, given that he probably never needs to get a loan out.