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| Version 0 | Version 1 |
|---|---|
| Rock rescue plan back before MPs | Rock rescue plan back before MPs |
| (about 2 hours later) | |
| The bill under which Northern Rock will be nationalised returns to the Commons later, with some MPs expected to demand changes before it becomes law. | The bill under which Northern Rock will be nationalised returns to the Commons later, with some MPs expected to demand changes before it becomes law. |
| The Banking (Special Provisions) Bill is expected to be on the statue book by the end of the day. | The Banking (Special Provisions) Bill is expected to be on the statue book by the end of the day. |
| But in Lords debates on Wednesday, the Lib Dems warned they would back Tory amendments and add some of their own. | But in Lords debates on Wednesday, the Lib Dems warned they would back Tory amendments and add some of their own. |
| The Tories want the bank's business plan before Parliament and the Lib Dems are demanding regular progress reports. | The Tories want the bank's business plan before Parliament and the Lib Dems are demanding regular progress reports. |
| Treasury spokesman Lord Davies said the bank was being taken into public ownership to protect taxpayers. | Treasury spokesman Lord Davies said the bank was being taken into public ownership to protect taxpayers. |
| But Tory ex-chancellor Lord Lawson said there were "grave risks" and it was being done for political reasons. | But Tory ex-chancellor Lord Lawson said there were "grave risks" and it was being done for political reasons. |
| During the Lords debate on Wednesday he said the emergency legislation was the "second worst solution" - the worst being to give public subsidies to private buyers. | During the Lords debate on Wednesday he said the emergency legislation was the "second worst solution" - the worst being to give public subsidies to private buyers. |
| Political reason | Political reason |
| "There is no public interest involved here. It is not as if we are short of mortgage-lending institutions in this country. It is not as if there is any strategic national interest in maintaining one more such institution," he said. | "There is no public interest involved here. It is not as if we are short of mortgage-lending institutions in this country. It is not as if there is any strategic national interest in maintaining one more such institution," he said. |
| "There are grave risks in keeping it on. There is a greater exposure of the taxpayer than there would otherwise have been and there is the problem of unfair competition." | "There are grave risks in keeping it on. There is a greater exposure of the taxpayer than there would otherwise have been and there is the problem of unfair competition." |
| He accused the government of trying to save the bank for political reasons because it was "sensitive about feelings in the North East". | He accused the government of trying to save the bank for political reasons because it was "sensitive about feelings in the North East". |
| Meanwhile Liberal Democrat Lord Newby said his party would seek "to strengthen the accountability of the government and Northern Rock, as appropriate, to Parliament". | Meanwhile Liberal Democrat Lord Newby said his party would seek "to strengthen the accountability of the government and Northern Rock, as appropriate, to Parliament". |
| The party is demanding an immediate independent audit of Northern Rock and a regular progress report to Parliament, as well as supporting Tory calls to effectively lay before Parliament the bank's business plan and bring it within the Freedom of Information Act. | The party is demanding an immediate independent audit of Northern Rock and a regular progress report to Parliament, as well as supporting Tory calls to effectively lay before Parliament the bank's business plan and bring it within the Freedom of Information Act. |
| Lord Newby added: "We contemplate supporting this bill more in sorrow than in anger. | Lord Newby added: "We contemplate supporting this bill more in sorrow than in anger. |
| "We have been alarmed at some of the aspects of the dealings of Northern Rock and some aspects of the way the government has attempted to introduce this legislation." | "We have been alarmed at some of the aspects of the dealings of Northern Rock and some aspects of the way the government has attempted to introduce this legislation." |
| Unsecured loans | Unsecured loans |
| Concerns were also raised about Granite, the Jersey-based trust to which Northern Rock sold £45bn of its most profitable mortgages. | Concerns were also raised about Granite, the Jersey-based trust to which Northern Rock sold £45bn of its most profitable mortgages. |
| It has prompted accusations that the taxpayer will be left with the "rubbish" on the troubled bank's mortgage book, such as unsecured loans. | It has prompted accusations that the taxpayer will be left with the "rubbish" on the troubled bank's mortgage book, such as unsecured loans. |
| Lord Lawson said it was "deplorable" Granite was not part of the nationalisation process. | Lord Lawson said it was "deplorable" Granite was not part of the nationalisation process. |
| It is important for savers and depositors to be reassured that their money remains secure Lord DaviesGovernment minister Darling hits back over Rock trust class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=4307&edition=1">Send us your comments | |
| But Lord Davies, for the government, told peers: "Granite, the Northern Rock's securitisation programme, is a special purpose vehicle, a trust, which has no claim on Northern Rock's assets. | But Lord Davies, for the government, told peers: "Granite, the Northern Rock's securitisation programme, is a special purpose vehicle, a trust, which has no claim on Northern Rock's assets. |
| "We are dealing in this bill with Northern Rock and its assets and that is the exposure of the taxpayer." | "We are dealing in this bill with Northern Rock and its assets and that is the exposure of the taxpayer." |
| He said it was necessary to take Northern Rock "into a period of temporary public ownership" adding: "It is important for savers and depositors to be reassured that their money remains secure. " | He said it was necessary to take Northern Rock "into a period of temporary public ownership" adding: "It is important for savers and depositors to be reassured that their money remains secure. " |
| 'The better option' | 'The better option' |
| He said the future of the bank "ultimately" lay in the private sector but the two private sector bids the government had considered involved risk to the taxpayer and a "very significant implicit subsidy" from the Treasury. | He said the future of the bank "ultimately" lay in the private sector but the two private sector bids the government had considered involved risk to the taxpayer and a "very significant implicit subsidy" from the Treasury. |
| "By contrast, under public ownership the taxpayer will secure the entire proceeds of the future sale of the business, in return for bearing the risks during the present period of market uncertainty," he said. | "By contrast, under public ownership the taxpayer will secure the entire proceeds of the future sale of the business, in return for bearing the risks during the present period of market uncertainty," he said. |
| "Therefore we have made the decision we have to protect the taxpayers, after having weighed up all the various competing considerations. It was clear that a temporary period of public ownership was the better option." | "Therefore we have made the decision we have to protect the taxpayers, after having weighed up all the various competing considerations. It was clear that a temporary period of public ownership was the better option." |
| Earlier Chancellor Alistair Darling defended a decision not to nationalise Granite after criticism from the Lib Dems and Conservatives. | Earlier Chancellor Alistair Darling defended a decision not to nationalise Granite after criticism from the Lib Dems and Conservatives. |
| Lib Dem Treasury spokesman Vincent Cable wrote to Mr Darling and accused the government of supporting an "asset-stripping" operation. | Lib Dem Treasury spokesman Vincent Cable wrote to Mr Darling and accused the government of supporting an "asset-stripping" operation. |
| He had threatened to withdraw his party's support for nationalisation - potentially delaying its passage through Parliament. | He had threatened to withdraw his party's support for nationalisation - potentially delaying its passage through Parliament. |