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Northern Rock

My right hon. Friend is absolutely right. His intervention underlines the reason why, historically speaking, Northern Rock was so highly regarded, particularly as a building society but later also as a bank. The chief executive exploited that reputation to run it into a very dangerous situation. I am not blaming him alone, however. The regulators should have seen the dangers. I want to turn now to the different options available, and to where things stand in regard to the proposed private sale. There seem to be two serious offers, although others come and go. There is the offer by Branson, and that by Luqman Arnold's Olivant group. They differ in that Branson's consortium wants a takeover and is willing to trade on the basis of the Virgin reputation as a way of attracting new deposits, while Luqman Arnold is not interested in a takeover. He wants a minority stake and to run the bank properly while restoring it to its purpose as a responsible bank. In normal circumstances, I am sure that either of those proposals would be an interesting proposal to be treated with the market. This is an extraordinary situation, however, and it is becoming increasingly apparent that neither of those two, or any of the others, will be remotely able to raise the amount of money required to take over the bank as a going concern and give the Treasury the guarantees that it requires. Of course, they say that they can guarantee the first half, the £15 billion. What they cannot guarantee is the next £15 billion. That will be the difficult bit, because that is where the lack of security is. Nor should we be under any illusions about the motives of the people who are bidding. I have never met Mr. Branson, but he seems to be an engaging character who has had some successful ventures. He is, however, a front man for a consortium of hedge funds and private equity operators whose aim is to make a killing. He is proposing to invest about £200 million in a company whose gross assets will be more than £100 billion, and he will be hoping to sell it on in due course and make a large capital gain which, as he is registered overseas, might well not attract UK taxation. So we are not talking about Mother Theresa here; we are talking about some very tough short-term financial investors. As I talk about the bidders, it is coming back to me that the Government have made a bad mistake—even within their own policy—in giving preferential status to one of the bidders, the Branson group. The other bidders have discovered, as they enter the early stages of due diligence, that the Government—and the taxpayer—are paying the legal fees of the Branson consortium but they are not willing to pay theirs. Understandably, they are aware that they are not operating on a level playing field. I do not want to run Mr. Branson down, but it is a matter of fact—of which I was previously unaware—that he has a criminal record for tax evasion. There is therefore good reason to believe that the people who have to stump up the money for his consortium may well not regard him as a fit and proper person to run a public company, let alone a bank, and let alone as someone responsible for £30 billion worth of taxpayers' money. So there are real questions about whether this private bid is ever going to succeed. In the context of the private bid, one must also ask—this goes back to the question about private shareholders—