Virgin chief Richard Branson accused British Prime Minister Gordon Brown of having “bottled out” of the Northern Rock crisis in a move that will “haunt” him.
The British entrepreneur wanted to take over the stricken bank, but Brown’s government nationalized it instead because of a “lack of courage,” Branson told the Daily Mail newspaper in an interview published yesterday.
‘TRAGIC ERROR’
Branson warned that the “tragic error” would cast a shadow over the government for years to come.
The collapse of the mortgage lender last September has been a key point in Brown’s 15-month premiership and was a bellwether moment as the economic downturn kicked in.
Branson’s Virgin Group was behind one of two private takeover bids that British Finance Minister Alistair Darling rejected, saying they would not give taxpayers value for money as he confirmed the temporary nationalization in February.
“Brown was more concerned with tomorrow’s news than jobs,” Branson said.
NO COURTESY CALL
“He didn’t care about saving a great British institution. Brown bottled out. He was scared of the prospect of me, a capitalist, turning the bank around,” he said.
“Darling didn’t even have the courtesy to ring and tell me of their decision,” he said.
“I expected the courtesy of a call, especially as they promised me that if they decided to nationalise they would let me know first. Then I heard rumours that the BBC was about to break the news,” he said.
“So I rang Darling. It was tense. As we were talking, the news broke on the TV. Unbelievable! Then I got a call from Gordon Brown telling me to move on and not to make a nuisance of myself about the decision,” he said.
JOB POTENTIAL
“I would have created thousands of new jobs, but instead it has been made to disappear. It will haunt this government and those who follow it,” he said.
Branson said that he handled the setback by getting “very drunk.”
“I think it was 10 tequila slammers. I had the most terrible hangover,” he said.
The global credit crunch, which resulted from the collapse of the US subprime home loans sector, forced Northern Rock to request emergency funding from the Bank of England.
The mortgage lender could not raise funds on credit markets to cover its liabilities and depositors began queuing round the block to withdraw their savings, which hit consumer confidence in the banking sector as a whole.
It was the first run on a British bank in more than a century and led the government to nationalize Northern Rock.
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