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| Version 12 | Version 13 |
|---|---|
| Northern Rock bill clears Commons | Northern Rock bill clears Commons |
| (about 1 hour later) | |
| The government has taken steps towards the nationalisation of Northern Rock after emergency legislation was rushed through the Commons in a day. | The government has taken steps towards the nationalisation of Northern Rock after emergency legislation was rushed through the Commons in a day. |
| The Banking (Special Provisions) Bill was given a third reading by 293 votes to 167 despite Conservative opposition. | The Banking (Special Provisions) Bill was given a third reading by 293 votes to 167 despite Conservative opposition. |
| The bill now goes to the Lords later, with ministers hoping it can be on the statute books by the end of the week. | The bill now goes to the Lords later, with ministers hoping it can be on the statute books by the end of the week. |
| It will put the troubled bank into what the government has described as temporary public ownership. | It will put the troubled bank into what the government has described as temporary public ownership. |
| The bill will spend at least one day in the Lords, before the Commons considers any amendments on Thursday. | The bill will spend at least one day in the Lords, before the Commons considers any amendments on Thursday. |
| The decision to rush through the bill on Tuesday was criticised by some MPs, but Chancellor Alistair Darling said it was essential to "proceed quickly". | The decision to rush through the bill on Tuesday was criticised by some MPs, but Chancellor Alistair Darling said it was essential to "proceed quickly". |
| Shadow Treasury chief secretary Philip Hammond said MPs had been expecting a "narrowly focused" measure, not a 24-page bill, which he said could allow other banks and mutual building societies to be nationalised. | Shadow Treasury chief secretary Philip Hammond said MPs had been expecting a "narrowly focused" measure, not a 24-page bill, which he said could allow other banks and mutual building societies to be nationalised. |
| Liberal Democrat Simon Hughes accused ministers of treating the Commons "disgracefully". | Liberal Democrat Simon Hughes accused ministers of treating the Commons "disgracefully". |
| The chancellor said the bill could be used only in "very defined and exceptional circumstances". | The chancellor said the bill could be used only in "very defined and exceptional circumstances". |
| "It is impossible to run a bank - let alone any other company - unless it is clear who is in charge of that bank," he said. | "It is impossible to run a bank - let alone any other company - unless it is clear who is in charge of that bank," he said. |
| Liberal Democrat support for the emergency law means it is likely to be approved. | Liberal Democrat support for the emergency law means it is likely to be approved. |
| An independent figure will then be appointed to value the bank's shares and decide how much compensation shareholders will get. | An independent figure will then be appointed to value the bank's shares and decide how much compensation shareholders will get. |
| The action comes after the bank ran into problems last autumn amid the US sub-prime lending crisis and the global credit squeeze. | The action comes after the bank ran into problems last autumn amid the US sub-prime lending crisis and the global credit squeeze. |
| Ministers opted for public ownership of Northern Rock after rejecting a bid from a consortium led by Sir Richard Branson's Virgin Group and a proposal from the board of Northern Rock. | Ministers opted for public ownership of Northern Rock after rejecting a bid from a consortium led by Sir Richard Branson's Virgin Group and a proposal from the board of Northern Rock. |
| 'Protects taxpayer' | 'Protects taxpayer' |
| Taxpayers are subsidising the bank in loans and guarantees to other lenders to the tune of about £55bn, which will rise to £110bn under the new strategy, equivalent to £3,500 per taxpayer. | Taxpayers are subsidising the bank in loans and guarantees to other lenders to the tune of about £55bn, which will rise to £110bn under the new strategy, equivalent to £3,500 per taxpayer. |
| Mr Darling told the Commons: "We are proposing a course of action that will maintain financial stability. | Mr Darling told the Commons: "We are proposing a course of action that will maintain financial stability. |
| "It will support the savers and it also gives a chance for this company to refocus and restructure. It is also a proposal that protects the taxpayer." | "It will support the savers and it also gives a chance for this company to refocus and restructure. It is also a proposal that protects the taxpayer." |
| HAVE YOUR SAYIf they are going to invest taxpayers money into a failing company, then taxpayers should get a say in what happensLee, HertsSend us your comments | HAVE YOUR SAYIf they are going to invest taxpayers money into a failing company, then taxpayers should get a say in what happensLee, HertsSend us your comments |
| He said that while ministers would not be involved in the day-to-day running of Northern Rock, they would need to approve its business plan. | He said that while ministers would not be involved in the day-to-day running of Northern Rock, they would need to approve its business plan. |
| Shadow chancellor George Osborne said the Conservatives supported an alternative plan of Bank of England-led administration and said the government was writing "a huge blank cheque". | Shadow chancellor George Osborne said the Conservatives supported an alternative plan of Bank of England-led administration and said the government was writing "a huge blank cheque". |
| "Not only do we not know what we are paying for this bank, we don't know what we are buying into," he said. | "Not only do we not know what we are paying for this bank, we don't know what we are buying into," he said. |
| "The government simply refuses to tell us how risky this exposure is." | "The government simply refuses to tell us how risky this exposure is." |
| He accused the government of avoiding the word "nationalisation", adding: "It has become the policy that dare not speak its name." | He accused the government of avoiding the word "nationalisation", adding: "It has become the policy that dare not speak its name." |
| Competition questions | Competition questions |
| But Labour's Newcastle MP Jim Cousins accused the Tories of wanting a "rapidly managed run-down" of the bank. | But Labour's Newcastle MP Jim Cousins accused the Tories of wanting a "rapidly managed run-down" of the bank. |
| Lib Dem Treasury spokesman Vincent Cable raised concerns about the "very messy area" of competitive principles in relation to other banks. | Lib Dem Treasury spokesman Vincent Cable raised concerns about the "very messy area" of competitive principles in relation to other banks. |
| "What is the kind of deposit interest rate that can be offered? Can it offer a higher rate of interest in attracting deposits or the same? How is it going to be constrained. What are its lending practices going to be?" he asked. | "What is the kind of deposit interest rate that can be offered? Can it offer a higher rate of interest in attracting deposits or the same? How is it going to be constrained. What are its lending practices going to be?" he asked. |
| The running of the bank and any restructuring will now be the responsibility of City trouble-shooter Ron Sandler, who will be paid £90,000 a month and, it has emerged, is a non-domiciled taxpayer. | The running of the bank and any restructuring will now be the responsibility of City trouble-shooter Ron Sandler, who will be paid £90,000 a month and, it has emerged, is a non-domiciled taxpayer. |
| BBC business editor Robert Peston said Mr Sandler had lived and worked in the UK since the mid-1980s, paying UK tax on what he earns here, but he was brought up in Zimbabwe, has a German passport and holds assets overseas. | BBC business editor Robert Peston said Mr Sandler had lived and worked in the UK since the mid-1980s, paying UK tax on what he earns here, but he was brought up in Zimbabwe, has a German passport and holds assets overseas. |
| And the woman he has chosen as his £75,000-a-month chief financial officer, Ann Godbehere, is resident for tax purposes in Switzerland and is also likely to adopt non-dom status. | And the woman he has chosen as his £75,000-a-month chief financial officer, Ann Godbehere, is resident for tax purposes in Switzerland and is also likely to adopt non-dom status. |
| The government is currently targeting non-domiciled taxpayers - people who live in the UK but who say their real home or "domicile" is elsewhere and pay no UK tax on their overseas earnings. | The government is currently targeting non-domiciled taxpayers - people who live in the UK but who say their real home or "domicile" is elsewhere and pay no UK tax on their overseas earnings. |
| A Treasury spokesman said they would be "very relaxed" if Mr Sandler had the non-dom tax status. | A Treasury spokesman said they would be "very relaxed" if Mr Sandler had the non-dom tax status. |