Banking (Special Provisions) Bill

Part of the debate – in the House of Lords at 1:45 pm on 21st February 2008.

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Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords) 1:45 pm, 21st February 2008

The Government have nothing to hide on this issue. I recognise that the noble Lord is not speaking from the Front Bench and therefore may not be entirely compliant with his own Front Bench, either in this House or at the other end, with regard to these issues. However, if he is prepared to attest that he is, it will be an interesting point to put in the ledger.

The noble Lord is contending that as far as the Government were concerned there was another alternative once these bids had failed. The Government made up their mind that public ownership was best in the interests of the nation and for safeguarding the resources already provided by the taxpayer. I know that noble Lords opposite have a fanciful notion that Northern Rock could have gone into some kind of Bank of England administration, an absolute canard on how the issue was meant to work to the benefit of anyone. Certainly it would have been a catastrophe for Northern Rock, a catastrophe for its shareholders and a catastrophe for its workforce. The Government never considered that, and are not prepared to consider it, as a realistic proposition. That is why we have taken Northern Rock into public ownership while, at the same time, being confident that there are assets in Northern Rock against which the loans from the Bank of England and the taxpayers' contributions are secured.