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There has been a bit of talk this week that the Northern Rock incident is Labour's very own Black Wednesday. Jack Straw has rightly said that this is "utter nonsense", but it's worth highlighting the differences nonetheless.

First, Northern Rock: essentially, the global credit crunch meant that Northern Rock had to borrow money from the (independent) Bank of England. Worried customers withdrawing their savings etc. caused a further rush on the mortgage lender, so the government stepped in to guarantee all deposits held by savers. Full details are here.

What of Black Wednesday? This was the day when Britain had to withdraw from the Exchange Rate Mechanism, which tied the pound to the deutschmark, and cost the Treasury some £27bn of reserves in order to prop up the pound and lost the British economy some £3.4bn. Throughout Black Wednesday, Norman Lamont as Chancellor and John Major as Prime Minister raised the already high interest rate up from 10% to 12% to 15%.

What is most important about Black Wednesday, though, is that it was the result of the disastrous policies implemented by the Conservative government of the day. These were the days of "boom and bust" — endless growth and recession — which were the direct result of Conservative, and especially Norman Lamont's, approach to managing the economy, so that entry to the erm was designed as a way of stabilizing Britain's economy. Far from doing so, however, it revealed just how bad the Conservatives had been at managing the economy, and earned them a reputation they have never been able to shake off since. (More useful background on Black Wednesday is here.)

The incidents are in no way comparable. But it's worth noting who was there throughout Black Wednesday, acting as special adviser to Norman Lamont: David Cameron. Is it any wonder he's been so quiet about making the Black Wednesday comparison?

(Incidentally, George Osborne was a special adviser at the Ministry of Agriculture, Fisheries and Food during the BSE crisis. Clearly, the top brass in the Conservative party have a pretty good heritage between them!)

Tags — Politics