Sweden really does rule. What Mervyn King and Gordon Brown have agreed today is, essentially, the Swedish 1992 bank bailout plan, (NYT write-up here). It was authored by the same conservative government which introduced the voucher school model that the Tories are proposing to replicate. While the UK bailout is comparable to the Paulson plan in the US (adjusting for the size of the respective economies) in terms of scale, it is a far better plan. And this is where Gordon Brown does deserve some credit. Instead of buying toxic waste, as Paulson proposes, the UK taxpayer is injecting capital and taking preference shares. This means that if the economy turns around, the UK shareholder will be first in line for the dividends. If the banks go bust, we’ll be first in line for asset sales upon liquidation. The US taxpayer, by contrast, can kiss goodbye to that $700bn because I suspect that toxic waste will just be buried somewhere.
Britain’s best politics newsletters
You get two free articles each week when you sign up to The Spectator’s emails.
Already a subscriber? Log in
Comments
Join the debate for just £1 a month
Be part of the conversation with other Spectator readers by getting your first three months for £3.
UNLOCK ACCESS Just £1 a monthAlready a subscriber? Log in