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Northern Rock

Part of Topical Questions – in the House of Commons at 3:31 pm on 19th November 2007.

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Photo of Alistair Darling Alistair Darling The Chancellor of the Exchequer 3:31 pm, 19th November 2007

I note that over the weekend the hon. Gentleman changed his position on Northern Rock several times. On Saturday he was calling for full-scale nationalisation, by yesterday he was calling for reluctant nationalisation; and today it was reluctant nationalisation for a very short period. This afternoon, having denounced the City, he went on to press for a quick sale to the very people whom he had denounced.

I understand full well that the board and the shareholders have a particular interest with regard to Northern Rock—I made that clear in my statement—but we, the Government, have an interest in protecting not just financial stability but the taxpayer's money that is being lent. The reason that we insist on our interests being upheld is that we would have to agree with any proposal for the future of Northern Rock. If we do not like a proposal, we can say no to it. We can veto it because, through the Bank of England, we are by far the major creditor.

I believe, however, that simply plumping for one solution today—and presumably, by extension, not bothering even to consider any of the expressions of interest that have been received—would be extremely short-sighted and foolish. Would it not be better to use the time that we have to establish whether those expressions of interest can be translated into a firm proposal that would both help the company and, crucially, protect the public interest? I think that that would be far the better course, and it is the one that I propose to pursue.