Government must not be left with worst Northern Rock assets - Liberal Democrats

2.08.00pm UTC (GMT +0000) Wed 20th Feb 2008

Northern Rock

Liberal Democrat Shadow Chancellor, Vince Cable, has today written to Alistair Darling calling on him to explain why the Government is not planning to nationalise Northern Rock's Granite fund, which holds many of the bank's best assets. During yesterday's debate on the bank's nationalisation Dr Cable said the separation of the best mortgages from the nationalised parts of Northern Rock had the appearance of "an asset-stripping operation". The Lib Dems abstained at the bill's third reading, with Dr Cable warning that "we need to build into the Bill provisions to create much more transparency than has existed so far." At today's PMQs Nick Clegg said Gordon Brown seemed to be "jeopardising the interests of British taxpayers all over again by hiving off the bank's best assets elsewhere." He also called on the PM to admit that "if he had acted sooner, he could have saved the taxpayer the tens of millions of pounds frittered away on bidders' costs and prevented the untold damage done to this country's reputation as a world financial centre".

Vince Cable, Liberal Democrat Shadow Chancellor said "After five months of Government indecision it would seem that in the rush to nationalise Northern Rock ministers have forgotten about the 40% of the company's best assets. Ministers have so far completely failed to answer how the continued existence of Granite will be anything other than an asset stripping operation, designed to protect this segment of the bank's activities while the taxpayer is left with unsecured loans and high risk mortgages. The shambolic performance of ministers in Parliament last night smacks of a Treasury that is out of control. The Government must explain how it will ensure that taxpayers will not end up picking up the scraps of Northern Rock from Granite's table."