Did Vince Cable stop Richard Branson from getting Northern Rock?

Vince Cable's powers of political assassination are becoming legendary, so how far is the Brutus of the Liberal Democrat party responsible for toppling Richard Branson's Virgin bid?

Cable's assaults introduced onto the political agenda three questions: would the taxpayer get value for money; would the profits go through an offshore account and whether Branson personally could be trusted. A politically incendiary cocktail - and one the Tories have almost entirely steered clear of.

The first phase of Cable's attack came on November 18, when he asked why taxpayer's money should be used to help a Branson bid. On November 27 he suggested Virgin would "run rings around the Treasury", then at the start of December he predicted "catastrophic losses if Richard Branson's hedge-fund friends get their hands on Northern Rock."

But it got really personal - and interesting - on December 13. Speaking in the Commons, he said of Branson:

"I don't want to run the man down.... There is good reason to believe that the people who have to stump up the money for his consortium may well not regard him as a fit and proper person to run a public company - let alone a bank and let alone be responsible for £30 billion of public money."

Ouch. After Christmas, the body blows continued. Branson had become Gordon Brown's "mate", and someone who would put Northern Rock profits through a Caribbean tax haven. But the piece de resistance was an article in the Mail on Sunday, knife freshly sharpened:

- "(Sir Richard) is a dashing entrepreneur with a Rolls-Royce publicity machine",

- "Sir Richard nor his partners come from the Mother Teresa school of business management. They are in this for what they can get out of it"

- "Sir Richard insists he pays tax here on his UK earnings, Virgin Holdings is registered in Switzerland, not Britain. And are the rest of Sir Richard's consortium colleagues registered for tax purposes in the United Kingdom?"

Cue angry letter from Sir Richard. His people, however, were unable to say which Virgin vehicle would own the shares in the new company and claimed that Cable's comments were part of a campaign to nationalise the bank. While this damage was being done, the government seemed to be holding out for an ever better deal: whether this was the "Cable effect" at work behind the scenes we may never know. One factor is unknown: how seriously the government took the threat of large shareholders to block the Virgin offer, which would have diluted their holdings, in the courts.

But the last word goes to Charlie Whelan, now Gordon's man in the unions, in a PR Week column from January 23.

"It is a great relief for Labour, then, that the Liberal Democrats are the ones proposing nationalisation, although it is probably illegal under EU rules. Vince Cable may have made all the running as temporary Lib Dem leader but he will be losing media support with this left-wing line."

Comments

[Gary Smith]

The LibDems are the 'Old Labour' now. They
have no chance of achieving power of their own, but can be spoilers as Vince Cable demonstrates. His questions reeks of left-wing politics of 1970s, and the government
it appears went along the route he was suggesting and is now lumbered with tens of billions of pounds of liability.

It should be an eye opened for any voter who is thinking of voting LibDems. They will get the left-wing policies that were consigned to history decades ago.

[Chuck Unsworth]

Personally I think Cable has played a blinder so far. Whether one agrees with nationalisation or not, the fact is that the Government - Darling being Brown's face - has had to back down repeatedly.

I wonder how Darling can get out of bed in the morning. It's bad enough having to deal with all the ag, let alone having to keep his back to the wall at all times. Cooper and Balls are sharpening the stilettos, Brown is lurking in the background waiting to give the signal for the assassination, innumerable other Labour MPs now willing to strike the first blow. Must be nerve-racking. Still, he knew all this before he started the job.

I think the best thing Cameron can do is just to stoke the fires. There's no need for out and out confrontation on this, NuLabour are imploding. Trouble is, it's costing the taxpayer quite a lot of money.

All this nonsense about 'we couldn't have let the bank go to the wall because of the potential damage to others' is just flim-flam. It's really to do with Darling's mortgage and the NuLab heartland. Had it been a bank in Oxford or the Home Counties the story would have been radically different. But (Economic Miracle) Brown's problem now is - when does he call the election?

[Diddly Do]

The thought of Virgin posting mega profits just before the next election would have galvanised the government into turning down his offer no doubt. It would have been even worse if the profits were hidden behind a smokescreen of offshore holdings, as our mighty media in this contry would have looked under every stone, even if it had taken years to find the truth and the effect on Labour would have rolled on like some disease, effecting their election hopes for years to come.

[Branson watcher]

Vince Cable has been right on all 3 counts-see my e mails to him .Brown realised 10 days ago that if Branson had been let loose, the Investigative Journalist with the true Branson story would have made a fortune and brought down this so called goverment. No wonder Tories are silent-Hague put Branson up for a knighthood and check for Ashcroft and Branson connection- No wonder Fossett has gone AWOL.Bet you all Virgin group advertising in National media now ceases!

[D. L Stephens]

Vince Cable is right. We owe him a considerable debt for making public in a credible way that which has been obvious for a long time. It is beyond ordinary members of the public to see into the murky waters of Virgin. When things are just obviously wrong and seem to be hiding behind smoke and mirrors that alone ought to cause caution. Happily we have at least one MP who has the necessary background to see through the facade.

I am not a Lib dem supporter by the way, but credit where credit is due.

[Sixupman]

WHATEVER HAPPENED TO "LIFEBOATS"?

[john bates]

I agree with Gary Smith - Cables desire for nationalisation is little more than old school Marxism ...

[William]

Maybe someone read Tom Bower's biography of Branson! After reading it, I have a very negative view of all things "Virgin".

[James]

Hurrah - Vince has fleeced the shareholders of any chance of getting some money back.

Vote LibDem and watch as they don't even go to the bother of hiding the robbing as taxes, they just take it from you.

Vince and Alistair should both go. One for cocking up and one for effectivly ending any market for small share holders, at a time when the economy needs them. Branson wasn't the only pony in the race - but Alistair changed the rules so often no one else wanted to play anymore. Complete screw up.

[Essex Boys]

We have it on good, internal Virgin, authority that the group has survived only with the large injections of taxpayers funds via Virgin Rail. So a good call Vince - we support virtually everything that's anti-Brown (after all it's so easy to do!) and when YOU speak the political world now listens. We have absolutely no doubt that yours was the decisive voice, particularly post-China! Thank you.

[Essex Boys]

Yvette Cooper sidestepped the question tonight of how much the government had underwritten/paid for the Virgin bid and advertising. Is there someone who can tell us please? It seems that tomorrow's Times will be majoring on the Goldman Sachs fee (also sidestepped by Mrs Balls) but it remains to be seen if and what the paper has to add about Virgin costs.

[Roger Lawson]

This is all nonsense. It was not Vince Cable that stopped the Virgin offer, it was the shareholders who showed at the EGM that they were powerful enough to block any offer they did not like, and subsequently showed that they were not going to support the Virgin bid.

Roger Lawson, UK Shareholders Association