I remember when Virgin made its bid for Northern Rock in about early 2008.
Listening to the news this evening, I hear that Virgin Money has got the go-ahead from the British government to buy Northern Rock.
My wife Tamara and I happened to be in London on the day that Northern Rock’s demise was being debated in the House Of Commons.
Tamara had been invited to tea at the the House of Lords earlier that day, and I went to collect her.
We decided to walk down the corridor and watch the proceedings in the House of Commons. We stood in line and went through endless corridors to eventually find ourselves in the Visitors’ Gallery looking down on the Speaker and the assembled MPs.
It couldn’t have been better timing because instead of something arcane that would have held little or no interest for us, the House was debating the proposed takeover of Northern Rock.
The chamber was packed and the two sides of the House were arguing bitterly over whose fault it was that the bank had collapsed. Was it due to easy credit, poor regulation, bad tax incentives, sky-high commissions?
We watched the debate for a long while, quietly noting the new plexiglass screens along all sides of the chamber – separating the visitors from the MPs below.
Northern Rock’s Background
Northern Rock is a bank. It started out life as a ‘building society’, which meant that its lending policy was governed by the Building Societies Acts. That meant it could only lend money against mortgages on property and that it had to follow the strict rules applicable to building societies.
Changes In Legislation: From A Building Society To A Bank
Northern Rock became a bank in the 1990s when, owing to changes in legislation, many other building societies were taking the opportunity to do the same. The advantages were that as a bank it could invest and also borrow more widely.
Unfortunately, the new latitude led to its becoming the first bank in 150 years of British banking to suffer a run on its assets.
This was caused by the money market (i.e. even bigger banks) refusing to lend on its dodgy lending portfolio and the Bank of England having to step in.
The run on Northern Rock’s assets carried the risk of a total default, so the British government bought the bank.
As Tamara and I lined up to go into the visitors’ gallery of the House of Commons we were each handed a thin A4-size booklet that contained a copy of the day’s proceedings. I still have mine, and Tamara has also kept hers.
I would show you a photograph of the booklet, but it is Crown copyright. What that means is that I would need a licence to copy it.
Growing up in England, I was aware that Crown copyright protected all kinds of things from being copied to the detriment of the publishers – namely the Crown, the courts, Parliament, Her Majesty’s Stationery Office, and other similar institutions.
At least that was how I looked at it until I read Heather Brooke’s extremely readable book The Revolution Will Be Digitised: Dispatches From The Information War.
In it she explains what Crown copyright is from her perspective.
An American Perspective On Government Copyright
Heather Brooke is an American living in Britain. It was she who blew open the MPs’ expenses scandal.
She makes the distinction between the situation regarding copyright in the United States and in Britain.
Originating with a principle laid down by Thomas Jefferson, all documents originating with the American government belong to the people.
That is why all Americans are free to copy, for example, Dorothea Lange’s world-famous photographs of poverty during the Great Depression.
As I say, in Britain the situation is different. And as Heather Brooke puts it, Crown copyright means that citizens have to ask their government for permission to use public data.
She found this out first hand when she made repeated requests for information about MPs’ expenses under the new Freedom Of Information Act and found that public bodies placed copyright notices on their responses.
Her view is that copyrighting of public information in Britain is specifically used as a means of restricting the flow of public information.
As an example of what that means, in 2004 Parliament demanded that a certain civic website shut down because it published details of how MPs had voted on matters in the House of Commons.
The information is published in the official records of Parliament known as Hansard, and Hansard is owned by Parliament and not by the people. So copying information from it is protected by Crown copyright.
In the end, Parliament was itself backed into a corner and was forced to grant a licence to the civic website – They Work For You – because the idea of suing a website for making such information available to the public was embarrassing to it.
One could say that democracy prevailed, but the reality is that TheyWorkForYou survived because it accepted that it needed a licence. Another viewpoint would suggest that the publishing of this kind of information should not require a licence.
So hearing this evening about the purchase of Northern Rock by Virgin Media brings back all kinds of memories: about the financial meltdown, rogue bankers, the government bailouts of the Royal Bank of Scotland and of LloydsTSB Bank, huge undeserved commissions, doom-laden TV news reports, and the ongoing restrictions of Crown copyright.