Prime Minister's question asked in the House of Commons, by Lord Cameron of Chipping Norton (Conservative). It was answered on Wednesday, 23 January 2008 on behalf of the Prime Minister.

Engagements

Question: The Prime Minister talks about changing positions, but last week he was all in favour of nationalisation. Then, he gets a tough time at Prime Minister's questions, he gets on an aeroplane with Richard Branson and he drops the whole plan. The Prime Minister will not tell us how much taxpayers are in for or how long they will have to wait to get their money back. It is like a used car salesman who will not tell someone the price, will not tell them the mileage, and will not give them a warranty. He has gone from prudence to Del Boy without even touching the ground. This deal depends on a massive effective subsidy from the British taxpayer to Northern Rock shareholders through either lower borrowing or a guarantee. So can the Prime Minister tell us how much that taxpayer subsidy is?

Answer: The loans and the bonds are secured against the assets of Northern Rock. It is as clear as that. If I may say so, the reason that we intervened is the reason that we still are intervening: to secure the stability of the economy. I believe that all parties in the House should be in favour of ensuring that what happened at Northern Rock does not spread to the rest of the economy. I believe that all parties in the House would want to ensure that the depositors of Northern Rock and other building societies are protected, but what we are now seeing is the height of opportunism on the part of the Conservative party. One day it favours nationalisation; another day it favours a private sale; then the shadow Chancellor says that his favoured option is now administration. Let me just tell the House what administration means. It means a fire sale of the assets, it means closing down the company and it means the Government losing billions of pounds of money. It is the worst possible solution and the Conservatives are not only guilty of inconsistency, but guilty of putting the stability of the economy at risk.

Secondary information