And the winner is …

I have a little black book in which I record bets, usually for 50p or nothing, and I have just found a money-free wager dating from January 2008. I was at a Downing Street reception with fellow journalists, and we were waiting for Gordon Brown to arrive.

We talked about Brown and Alistair Darling’s decision to “spend” what was widely reported as £24bn of taxpayers’ money to save Northern Rock. I thought such numbers were ill informed, and so I asked some of my economically literate colleagues: What will be the net cost to the taxpayer of the Northern Rock rescue after five years? I wrote down the predictions of four of my eminent colleagues as follows:

William Keegan £7-8bn

Hamish McRae £100m

Robert Peston £10bn

Nick Robinson £7bn

Now, the five years is not up yet, but in May this year the National Audit Office produced a thorough estimate of the net present value of the likely cost to the taxpayer of the rescue. It concluded that “the taxpayer will recover all of the cash provided”, but that there was an opportunity cost:*

The current estimate is that there could be a net present cost for the taxpayer of some £2 billion by the time the assets are fully wound down. This net present cost should, however, be seen as part of the overall cost of securing the benefits of financial stability during the financial crisis.

Congratulations to Hamish, my colleague on the Independent and Independent on Sunday, who was closest by some margin. The prestige of his victory is worth much more than any monetary prize.

And the losers in this competition are … David Cameron and George Osborne. Cameron said at the time: ”The nationalisation of Northern Rock is a disaster for the taxpayer, a disaster for this government and a disaster for our country.” Osborne said Darling was a “dead man walking” and that nationalising the bank had taken the country “back to the 1970s and the failed policies of Labour’s past”.

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• Junius

  ‘Congratulations to Hamish, my colleague on the Independent and Independent on Sunday, who was closest by some margin. The prestige of his victory is worth much more than any monetary prize.’

  Might we have a word or two by way of confirmation from Mr McRae? I would be gobsmacked if a hard-nosed economics journalist rated prestige above mazuma.

• JohnJustice

  Now that’s the kind of solid information I like to have, putting the knockers and whingers well and truly in their place. Well done JR.

• Pacificweather

  I’ll have a 50p bet that the NAO will be proven wrong when the five years is up. A case of counting your winnings before they are hatched.

  I would also like to know the opportunity cost of letting NR fail and only bailing out the non bank creditors. The value of that lesson on the banks might have been even more valuable. Has the NAO counted the cost of the moral hazard Brown and Darling created.