Northern Rock (Granite)

Part of Oral Answers to Questions — Treasury – in the House of Commons at 10:30 am on 6 March 2008.

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Photo of Yvette Cooper Yvette Cooper The Chief Secretary to the Treasury 10:30, 6 March 2008

No, as we have made repeatedly clear, Northern Rock has been taken into temporary public ownership; Granite has not. It is the case that Northern Rock has significant control over Granite, because it sets the mortgage rates and decides whether to sell mortgages to Granite, and it set up Granite solely for the purpose of raising finance for mortgage lending by Northern Rock, so there is a clear commercial relationship between them. However, the hon. Gentleman seems to be proposing that we should effectively buy out the Granite bond holders. That would not be sensible for the taxpayer and could lead to considerable taxpayer costs.