Please download Flash from the Adobe download website.
10:59am UK, Saturday December 31, 2011
Labour has accused the Prime Minister of rewarding “his friends in the City” after a hedge fund manager whose company made millions betting on the failure of Northern Rock was knighted in the New Year honours.
Paul Ruddock used a practice called ‘short-selling’ to profit from a fall in the share price of Northern Rock before it had to be rescued by the taxpayer.
Shadow Cabinet Office minister Michael Dugher said: “David Cameron promised to clean up politics, but in office he has shown he is utterly out of touch with decent British people.
At a time when millions of families are struggling to get by, it’s the Tories’ friends in the City who get the rewards.
Shadow Cabinet Office minister Michael Dugher
“He’s giving a knighthood to Paul Ruddock, who made millions from the collapse of Northern Rock and has given over half a million pounds to the Tories.
“This tells you everything you need to know about the Tories’ priorities. At a time when millions of families are struggling to get by, it’s the Tories’ friends in the City who get the rewards.”
Mr Ruddock has been awarded his knighthood for philanthropy and services to the arts. He is currently chairman of the Victoria and Albert Museum and a trustee of the Metropolitan Museum of Art, New York.
The hedge fund boss has also given nearly £500,000 to the Conservative Party since 2001.
Short-sellers trade their stock, allowing the price to fall, before buying it back. The practice was heavily criticised as the financial crisis took hold for its impact on the troubled banks.
Gerald Ronson has been made a CBE
Northern Rock was the first British bank in 150 years to suffer a bank run after having had to approach the Bank of England for a loan facility, to replace money market funding, during the credit crisis in 2007.
Having failed to find a commercial buyer for the business, it was taken into public ownership in 2008.
There was also controversy over the awarding of a CBE to property tycoon Gerald Ronson, who was jailed in 1990 for his part in the Guinness Four share scam.
The 72-year-old, who brought self-service petrol stations to the UK in 1960s and built Heron Tower, the tallest structure in the City of London, received his award for services to charity.
A Cabinet Office spokesman said every nomination was considered on its own merits, saying: “If someone has served their time and gone on to do wonderful works, I don’t think that prevents someone from receiving an honour.”