Northern Rock – so interested parties want us to write off £2 billion?

The deadline for interested parties is on us.  And if press reports are to be believed, they want us, as a country, to write off £2 billion in interest charged.

Let’s explore this further:

• Northern Rock would have had to pay interest on the money it would have had to borrow.  Why should we, as a country, waive all interest? 
• The interested parties asking for us to waive that interest make huge profits, typically £5 billion or so, each a year.  To them it is a few months’ profit, a mere blip in the dividends they pay to shareholders, in return for a long term investment that they are getting at a knock-down price.
•  £2 billion could go an awful long way in providing services to those we neglect (remember the failure to provide drugs to breast cancer patients on cash grounds? Our armed forces are operating on a shoestring).
• Surely if anyone should be coming out of this hurting financially, it should be the shareholders of Northern Rock, not us: the price for which the eventual buyer picks up the shares must reflect the interest payment, for it not to do so would mean each of us subsidising Northern Rock shareholders.  We don’t, and shouldn’t do it for others, why should we do it for them?  

It will, in my view, be completely the wrong for the government to write off any of the £2 billion interest.  Big business must bear the cost, not us.