Northern Rock: Cable criticises Government plans and Conservatives

4.00.00pm UTC (GMT +0000) Mon 21st Jan 2008

Northern Rock

Chancellor Alistair Darling has outlined plans to convert Northern Rock's £25bn Bank of England loan into bonds before selling them to investors. The bonds would be guaranteed by the government to speed up a private sale of the troubled lender. However, if a sale to a private buyer cannot be agreed, the bank will come under temporary public ownership. This would mean the taxpayer would be exposed to Northern Rock for a much longer period than planned, for five years or longer, analysts said. Liberal Democrat Shadow Chancellor Vince Cable has also criticised the Conservatives for not making their position clear over the future of the bank.

Vice Cable, Liberal Democrat Shadow Chancellor said "Brown must not waste billions more of taxpayers' money to save himself from the political embarrassment that would arise if Northern Rock was to be taken into public ownership. It is a cop-out to transfer loans into guarantees and the Government cannot imagine that the public will be naïve enough to be conned by this accounting dodge. It is frankly ridiculous that a major political party can be in the position where it has no idea what it would do about Northern Rock. The Tories' innate fear of nationalisation is nothing more than an embarrassing hangover of Thatcherism."