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Rock bill going before Parliament Rock bill going before Parliament
(about 1 hour later)
The bill to nationalise Northern Rock is to go before the Commons, with the Conservatives ready to vote against it. MPs are set to debate nationalising the Northern Rock bank - with the Conservatives ready to vote against it.
They believe the government's move is a "disaster" for taxpayers and that Chancellor Alistair Darling is now "politically a dead man walking". The government wants to put the troubled bank into "temporary public ownership" in the hope of finding a long-term buyer.
However Lib Dem support means the bill is almost certain to be approved. But the move has already prompted calls from the Tories for the resignation of Chancellor Alistair Darling. They call it a "disaster" for taxpayers.
Ministers say the "temporary" move was necessary after they failed to find a private buyer for the bank that would deliver value for money for taxpayers. Lib Dem support for the emergency law means it is likely to be approved.
Share value
The bill to nationalise Northern Rock was published on Monday and is expected to become law by the end of Thursday.The bill to nationalise Northern Rock was published on Monday and is expected to become law by the end of Thursday.
New competitor on the block
It will spend one day in the Commons going through all its stages and at least one day in the Lords, where governments are less able to force the pace of bills.It will spend one day in the Commons going through all its stages and at least one day in the Lords, where governments are less able to force the pace of bills.
Commons leader Harriet Harman said the lower house would consider any amendments made in the Lords on Thursday and the Commons would be kept going until the bill was passed. Commons leader Harriet Harman said the Commons would consider any amendments made in the Lords on Thursday and the Commons would be kept going until the bill was passed.
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.
There have been fears that Britain's reputation as a financial centre has been damaged by the crisis, but John McFall, Labour chairman of the Commons' Treasury Select Committee, says foreign businesses are not telling him that.
"I spoke to the European Commission particularly on the legislative issues associated with Northern Rock a couple of months ago," he told BBC Radio 4's Today programme.
"What they are saying is maybe there is a flesh wound being experienced by the City of London, but it's robust enough to turn things around.
"What they were saying to me was they need the UK in there to argue on the big issues of globalisation and to ensure we get regulation right in the future."
Job cuts?
Meanwhile, Chief Secretary to the Treasury Yvette Cooper has refused to be pressed on the accuracy of newspaper reports that taxpayers face a £100m bill for the cost of advice from banks and lawyers during efforts to secure a private sale for Northern Rock.Meanwhile, Chief Secretary to the Treasury Yvette Cooper has refused to be pressed on the accuracy of newspaper reports that taxpayers face a £100m bill for the cost of advice from banks and lawyers during efforts to secure a private sale for Northern Rock.
She told BBC Two's Newsnight: "I can't tell you the precise figures that are involved at this stage.She told BBC Two's Newsnight: "I can't tell you the precise figures that are involved at this stage.
"It's right the bank should take expert advice and the bank will pay for it.""It's right the bank should take expert advice and the bank will pay for it."
Job cuts? Ministers opted for public ownership of the bank after a bid from a consortium led by Sir Richard Branson's Virgin Group, alongside a proposal from the board of Northern Rock.
Ministers say the move to nationalise the bank after two private sector proposals were rejected is temporary.
The Rock's new executive chairman, Ron Sandler, who has the task of finding a strategy for the bank, said it was too early to discuss potential job cuts among its 6,000 employees.The Rock's new executive chairman, Ron Sandler, who has the task of finding a strategy for the bank, said it was too early to discuss potential job cuts among its 6,000 employees.
Subsidies
But he added that there was a good platform from which to stabilise the bank and repay billions of pounds of loans.But he added that there was a good platform from which to stabilise the bank and repay billions of pounds of loans.
The Unite union, which represents 4,500 of Northern Rock's staff, called for the government to guarantee that nationalisation would not lead to compulsory redundancies. The Unite union, which represents 4,500 of Northern Rock's staff, called for the government to guarantee nationalisation would not lead to compulsory redundancies.
Graham Goddard, the union's deputy general secretary, said the bank's new management had given a commitment that they would be able to discuss Northern Rock's future, for the benefit of everybody.Graham Goddard, the union's deputy general secretary, said the bank's new management had given a commitment that they would be able to discuss Northern Rock's future, for the benefit of everybody.
He said he was hopeful they could find an alternative to compulsory redundancies, such as retraining and natural wastage.He said he was hopeful they could find an alternative to compulsory redundancies, such as retraining and natural wastage.
HAVE YOUR SAYDue to greed, political and financial incompetence, the taxpayer has been left with a huge billHoss, EdinburghSend us your commentsHAVE YOUR SAYDue to greed, political and financial incompetence, the taxpayer has been left with a huge billHoss, EdinburghSend us your comments
Taxpayers are currently subsidising the bank in loans and guarantees to other lenders to the tune of about £55bn.Taxpayers are currently subsidising the bank in loans and guarantees to other lenders to the tune of about £55bn.
Under the new strategy this will rise to £110bn, an equivalent of £3,500 per taxpayer.Under the new strategy this will rise to £110bn, an equivalent of £3,500 per taxpayer.
Matthew Sinclair, from the Taxpayers' Alliance, said this was a very big price for taxpayers.Matthew Sinclair, from the Taxpayers' Alliance, said this was a very big price for taxpayers.
"Taxpayers have been saddled with debts the private sector did not have much appetite for," he said."Taxpayers have been saddled with debts the private sector did not have much appetite for," he said.
A consortium led by Richard Branson's Virgin Group had put forward a rescue package for the bank and the board of Northern Rock had also come up with a proposal for the lender.
Trading in Northern Rock shares was suspended on Monday morning, ahead of the introduction of the emergency legislation.Trading in Northern Rock shares was suspended on Monday morning, ahead of the introduction of the emergency legislation.
Groups representing Rock shareholders, who are likely to receive very little in the way of compensation, say there are "good grounds" for legal action over the government's move.Groups representing Rock shareholders, who are likely to receive very little in the way of compensation, say there are "good grounds" for legal action over the government's move.
Northern Rock's problems were prompted last autumn by a slump in the US housing market and a freezing up of global credit markets that started a run on the bank.Northern Rock's problems were prompted last autumn by a slump in the US housing market and a freezing up of global credit markets that started a run on the bank.