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Northern Rock

There were two important points in that last contribution—among the travel adverts. One was that this problem in Northern Rock is going to take some years fully to resolve, and a certain amount of patience is going to be required to resolve it. The other was that the Northern Rock problem is a problem not just for one small English region, but for the whole British financial community and for London's standing in the world. It would be sensible to bear both those points in mind in dealing with this issue. Today, five central banks, including the Bank of England, have announced that they will work together on ways of putting far more cash into the international banking system. That will only increase the growing anger in places such as Newcastle, Sunderland and Durham about this whole situation. If the same arrangements that were announced today had been in place four or five months ago, the Northern Rock collapse would not have occurred. There might still have been problems at Northern Rock, but the collapse would not have occurred. There is a far bigger problem out there than Northern Rock itself, and one bank in the north of England has now become a scapegoat for a much wider set of problems. In August, the Governor of the Bank of England presented himself to us as the hard man who would face the markets down. Where is that policy today, and where would Northern Rock and the City of London have been if his judgment of the situation at that time had been rather better? When we come to questions of judgment, we must also look at the contributions made on this issue by the hon. Member for Twickenham (Dr. Cable). Northern Rock is now trying to rebuild its deposit base. It is advertising attractive savings at attractive rates, which is the proper thing to do to rebuild that base, and it is trying to retain its existing deposit base by offering incentives to some of the savers who have stayed with it. What does the hon. Gentleman say? What did he say this very afternoon in this place? He said that the workers are doing no work, and that the default rates at Northern Rock—they are one of its real market strengths, and they give its workers not just a great deal of pride but market value in the financial sector—were not genuine. Previously in this House, he described the mortgage practices of Northern Rock as being"““little short of a…scam.””—[Official Report, 11 October 2007; Vol. 464, c. 468.]" All these statements are profoundly unhelpful in resolving this problem. They are extraordinarily damaging to the workers and savers at Northern Rock.