Interesting read about the demise of the N.East

[anewloginapparently]

Hyperbole or truth?

http://www.guardian.co.uk/money/2011...bol-north-east

Northern Rock's demise is a fitting symbol for the north-east

Once a sign of a wealth unfamiliar in the region, Northern Rock's demise is now a symbol of its collapse. Andrew Hankinson has got the T-shirt

Andrew Hankinson
guardian.co.uk, Friday 18 November 2011 23.01 GMT
Article history

As I write this, I'm wearing a T-shirt with "Rock steady" written on it. My mum gave it to me in September 2007 when she worked as a project leader at Northern Rock. She asked me to wear it to a rugby match. It was hoped the T-shirt would inspire popular support and save the bank from collapse. But the bank collapsed. The T-shirt was an insufficient fiscal tool.

Northern Rock never recovered. It was nationalised, and the government has been trying to sell it ever since. On Thursday it was announced it was being sold to Virgin Money for £747m. Ministers talked about how the sale "secures the long-term future of the company", but the Northern Rock name will turn to dust; it's being rebranded Virgin Money.

For a decade the north-east had a heartbeat. It was a weird time: the unfamiliarity of prosperity and hope. The feeling swelled in the mid-1990s and was made official in 1997, when a local constituency delivered the prime minister. The region was validated. People gave us free cash to build art galleries and concert halls. Plays were written about us. We never had a Harvey Nicks, but pubs started to put tables out on the pavement.

We went with the grains of fashion: football became mainstream, cobbled streets were heritage, working class was a lifestyle choice, the north became a mini-break destination. The hubris of tourism and travel polls made us believe in the north-east. We were offered regional governance and declined – we thought we didn't need it. We felt part of the momentum, rather than a parasite or a rube. Then the Rock demutualised. Suddenly we had a bank. A Geordie bank – how mad is that?

"It was fabulous," my mum says when I ask her about Northern Rock's metamorphosis. "It went huge. It was exciting. We were becoming modern."

Northern Rock became Britain's fifth largest mortgage lender. We were proud of it. That should have been a warning. The credit market froze in 2007 and the bank ran out of cash. Staff in branches wore the T-shirt while customers queued to close accounts, and Michael Owen, bought by Newcastle United using Northern Rock's sponsorship cash, wore the T-shirt. The fightback failed. We had no idea what we were fighting against.

The bailout was insufficient. In 2007 Northern Rock employed 6,000 people. Fewer than 2,000 are left. My mum was made redundant in 2008. It was her first job after graduating with a 2:1 in computing from The University of Sunderland in 1994. She looked for another job that made use of her education and experience. There weren't any. She stopped looking for a while. Eventually she found a job at an M&S outlet in North Shields. She loves it. She gets a 20% discount and brings me cheap biscuits and baby clothes.

She worries about her former colleagues. She says she was lucky, because she only had a few years before retirement and she still has the pension and new kitchen. Her colleagues had their working lives ahead of them. They were the big earners in their families. They've got big mortgages. There's nothing left for them here. The Northern Rock diaspora wander through second-rate local firms, or they change careers, or they paddle to the London lifeboat. If they stay around here their careers go down with the ship.

The north-east is being taught a hard lesson in moral hazard. Journalists visit us to see the recession – the retro misery, the familiar torpor. We break easily. In 1992 the north-east's unemployment rate was 13%. By the end of 1997 it was 8.3%. At the end of 2007 it was 5.7%. Now it's 11.3% – the highest in the country. The biggest regional employer is the public sector. A recent report from PricewaterhouseCoopers said cuts are hitting us hardest. The next day a report from Savills, the estate agency, singled out the north-east as about the only place in the country where house prices will carry on falling for years to come. The future economy is not ours. If you're counting shoots of growth, the north-east is Alan Shearer's former hairline.

A walk through the Regent Centre business district, where Northern Rock still resides, reveals the stagnation. Adjacent to Northern Rock is a tower. It was supposed to be the bank's new headquarters when completed in 2008. Northern Rock stayed put and sold the £35m tower to the council for £22m. Energy efficiency contractor Eaga moved in. The government cuts came, Eaga made redundancies, and earlier this year the company was bought by the multinational Carillion. Carillion is offshoring jobs to India.

The other main residents on the strip are the DVLA and the Department for Work and Pensions. Almost every building has a sign advertising vacant space. A recently completed office development stands entirely empty.

Even call centres, our former forté, are closing. Earlier this year, a Darlington call centre offered staff relocation to the Philippines. The deal included a rice allowance. Greggs is about the only success story. The Gosforth baker is opening new branches and recently built a new bakery a couple of miles from Northern Rock. It employs 2,600 people in the north-east. It's not a highly-skilled workforce, but there's no moral hazard in sausage rolls.

My mum holds no grudge with Adam Applegarth, the brains behind Northern Rock's disaster. I send a letter to him asking for an interview, but he writes back telling me he can't talk about Northern Rock for legal reasons. He says he will never be able to talk about Northern Rock. It's a very polite reply and I appreciate it. I've read that he currently works as an advisor for American private equity firm Apollo. I hope he's doing OK.

I ask my mum what's next for the north-east. She sees nothing. I ask local business people and they say the same. Southern friends say the same. The north-east had moved past the unhelpful shadows of nostalgia – "Did we tell you about our mining and ship-building industries?" – but we're in limbo now. We're in economic and existential crisis. One of my mum's friends suggests we become a giant heritage zone. They could put turnstiles on the A1 and charge tourists to see olde Britain. Grants could subsidise it. But as a going concern, the north-east is finished.

[Mr Redknapp]

Thatchers fault

[Womble Don]

What is interesting about it?

Northern Rock were growing rapidly
Northern Rock have now gone bust
His Mam now works at M&S
There are some office blocks empty
The north east is in a slump

Nothing new in that article

[hank williams]

Demse f the north east happened back in 1985

[Arkle]

Originally Posted by Womble Don

What is interesting about it?

Northern Rock were growing rapidly
Northern Rock have now gone bust
His Mam now works at M&S
There are some office blocks empty
The north east is in a slump

Nothing new in that article

That was new to me, to be fair.

[super-niall]

But as a going concern, the north-east is finished.

[yorkyexile]

Around the time of the floatation i worked for the firm that handled the voting procedure. Basically the sacks of mail came in, we sorted the yes,no`s and spoils etc then someone else counted them.However a lot of the votes that came back no had letters in from folks like me gran that had been their core savers for years all explaining that since the Bank would simply be sidelining them they felt that if the vote went yes they would be closing accounts. A lot of these were local durham/sunderland/shields folk who had been there for a lot of years(presumably since it was founded?) I guess that the writing was actually on the wall once they deserted their core members and went chasing business elsewhere

[Pseudonym Number 1]

Maybe a useful tool to remind those Southern, Tory voting c.unts that we up here are suffering....

[anewloginapparently]

Interesting bit for me is about the lack of well paid jobs in the N.East & how now even call centres lay people off to move overseas.

I have had to move away from the N.East four times in search of work, including once when my new job at Northern Rock was cancelled before it started when the crash happened.

When I first left Newcastle I was on 8.5k a year at HMRC & it was the best job I could find, within 2 weeks of moving to Manchester was on 21k.

Would move back to the N.East in a second if could earn a decent crust, or even have a lower paid job that matches my skills. They're just thin on the ground.

[riffraff]

Originally Posted by hank williams

Demse f the north east happened back in 1985

Clive fuckin Walker and Davey bloody Corner

I was a Northern Rock customer (still have mortgage) from the week after my birth. Saved with em all my NE living life until I moved dahn south where there were only four iirc branches in London (Kingston, Ilford, Harrow & Regents St). I only closed my accounts when they started sponsoring the mags

They seemed to suddenly go huge on the back of the mortgages. I asked a NR employee marra what NR were doing "right" and everyone else wasnt? Ans: Didnt know and didnt care. When I replied "it cant be this bloody simple or all the "big boys" would be doing it and their on a nationwide scale" he still didnt care and reckoned it was always "glass half empty with me".

Someone somewhere shouldve been asking the questions. Whether at Govt level or boardroom or union level or even in the canteen.

The whole affairs embarrassing for the NE imho as it makes it look as if the NE is incapable of running a business without Govt help.