Northern Rock Plan Backfires on Brown

In reshuffle, British PM invites Apprentice host to join government

(NEWSER) - Gordon Brown looked set to hang on to power this morning, despite the shock resignation of yet another minister who called on him to step down. James Purnell, a young Blairite, quit the Cabinet seconds after polls closed in last night's election, forcing Brown to bring forward a planned government reshuffle. Among the new faces: Alan Sugar, the host of Britain's version of The Apprentice, who will be made a lord and serve as an enterprise czar. More»

UK economic chief bluntly warns of harder times ahead

(NEWSER) - The outlook for Britain's economy is the bleakest since the days when the country was rebuilding from the Blitz, Chancellor Alistair Darling tells the Guardian. Darling warns that the downturn for the UK and the wider world could be "more profound and longer-lasting" than people expect. He acknowledges that voters are "pissed off" with the Labour party, and him personally. More»

Pundits examine the fallout of unavoidable nationalization

(NEWSER) - The subprime crisis has forced the British government to do what it dreaded: nationalize a bank. What's the fallout from the Northern Rock takeover?

• Gordon Brown "put quite a good face" on an unpalatable decision, says Philip Stephens of the Financial Times. Nationalization hasn't hurt him much, but the dithering has. Result: An election is probably years away.

Finance industry's fears of exodus forces minister's hand

(NEWSER) - Facing criticism from Britain's financial establishment and within his own Labour party, Treasury Minister Alistair Darling yesterday scrapped plans to tax "non-domiciled" foreigners as much as $60,000 a year. Investors worried the levy would push rich foreigners out of London and compromise the financial sector, the Financial Times reports. The troubles at the Treasury have led to speculations on Darling's future. More»

Deal pays back government loans, but public still on the hook

(NEWSER) - The British government today unveiled its last-gasp plan to hand off the Northern Rock hot potato and prevent nationalization, the London Times reports. Under the plan, the bank would immediately pay back the £25 billion it owes the government by selling the debt to private investors as bonds. But since the government is backing the bonds, taxpayers are still on the hook if the Rock defaults. More»