Banking (Special Provisions) Bill

Part of the debate – in the House of Lords at 2:51 pm on 21st February 2008.

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Photo of Lord Baker of Dorking Lord Baker of Dorking Conservative 2:51 pm, 21st February 2008

I consider that comment rather naïve. It is able to offer the most attractive interest rates in the market only because it has two unique guarantees—one to depositors and one on any bonds that may be issued. No other lending institution in the country has that degree of security. It is very important that there should be a level playing field. My noble friend referred to what the Rock was offering compared with competitors. I believe that this morning it was still offering mortgages at 125 per cent of the value of a property. Therefore, if the property is worth £100,000, it will offer £125,000. If the property is worth £1 million, it will offer £1.25 million. Yesterday, Alliance and Leicester and Abbey National both withdrew their 125 per cent mortgages. In fact, one went further and said that it was thinking of withdrawing its 100 per cent mortgages. But with a bank that has a total and complete guarantee, it can go on doing that. Does not the Minister agree that it is improvident for a bank to be taken into public ownership still to be offering 125 per cent mortgages? Does he approve of that?