Return to the 'N' word
Imagine, just for a second if you had suggested to Gordon Brown, before he became prime minister, that he would nationalise a bank in his first year in No 10. He would have laughed, then snorted but, if you'd persisted, you might have seen the colour drain from his face.
The N word - nationalisation - is so toxic to Brown's generation that they never wanted it to be heard in the same sentence as the Labour Party again. That is, no doubt, one reason he has delayed so long before taking this decision.
Before Christmas, when the Lib Dems were alone in advocating nationalisation, this was how it was discussed in the House of Commons:
"Jim Cousins (Labour MP for Newcastle upon Tyne, Central):
'Does my right hon. friend accept that the policy of nationalisation would lead to a slow lingering death for the jobs of the Northern Rock workers, its assets and Britain's reputation as a major financial services centre, with my right hon. friend the chancellor cast in the role of undertaker - and that only by finding a successor business to grow on those jobs, assets and reputations can we offer any real prospect of the taxpayers getting their money back?'
The chancellor: 'I agree with my hon. friend.'"
(Source : Hansard, 19 November 2007)
Now, to be fair, the chancellor did not rule out nationalisation then and now argues - with independent advice - that it is the best option for the taxpayer.
So, what will be the price to be paid - political, reputational and financial for today's decision?
Political damage will be:
• very serious for the chancellor who, whether he is to blame or not, is now associated with the first nationalisation in decades and the first run on a bank in over a century
• serious for the prime minister who has been forced to adopt a policy it's clear he was desperate to avoid and took months before taking
• the damage to the Labour Party is unpredictable since it may turn out that the N word is not half as toxic as was assumed.
So the key will be...
• the, as yet, unmeasurable damage to the reputation of London as the world's premier financial sector which, if serious, would lead to...
• a potential loss of business from the City with knock-ons for tax revenues and jobs elsewhere
• a loss of tens of millions in consultant fees for the sale of the Rock which ministers attempted but could not pull off
• the much talked of, though so far purely speculative, loss of billions of pounds in taxpayer guarantees if the Rock cannot pay them back. It may be years before the true scale of any loss is clear
In short, this is a day Gordon Brown would have done anything he could to have avoided but we do not know how well founded his fears were.