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Northern Rock

After five months, the Government are now in the best position to ensure the repayment of the taxpayer's money. They were right to decide that temporary nationalisation is a better option than a bad private sale whereby the taxpayer would have underwritten the risks and the private buyer would have acquired the profits. I am tempted to say, ““I could have told you so””, but this is too important for that. I will content myself simply with making this comment: when the Chancellor receives a large multi-million-pound invoice from Goldman Sachs for its financial advice, could he perhaps return it politely with a little note saying that he received rather higher quality advice free of charge from me and the Liberal Democrats? The Conservative spokesman talked about the dark satanic socialism of the 1970s, but will the Chancellor confirm that the last time a private bank was nationalised in Britain was in 1994, when the last Conservative Government acquired National Mortgage bank, paying its owners a total of £1? And was not the last major bank nationalisation in the western world undertaken by that loony left-wing Trotskyite President Ronald Reagan, when he acquired Continental Illinois bank, which was subsequently returned at a profit to the American taxpayer by the Clinton Administration? Clearly, choices have to be made. The Government have made theirs and we have made ours. Until today, the Conservatives had no alternative. I think that they are now suggesting public administration under a publicly owned Bank of England. What is that but nationalisation in all but name? The hon. Member for Tatton (Mr. Osborne) is so determined to keep one foot on either side of the fence dividing the public and private sector that he is in imminent danger of being castrated by the serrated edge. However, there are questions for the Chancellor. What sort of undertakings did he give to Sir Richard Branson and others to pay their fees for private bids? When will he commission a fully independent audit through the Bank of England to establish the quality of the assets—the loan book for which this enormous sum of public money has been advanced? When will there be democratic scrutiny of the new business model, which could involve contraction or expansion of the bank? I hope that the changes will put an end to the extreme loans to which the hon. Member for Tatton rightly referred, which lent more than the value of property. In general, the Government have to face some difficult decisions. The bank will have to contract and there will be job losses. We all recognise that, but at least the bank and the north-east have some long-term hope. For that reason, we shall support the measures in Parliament, while giving constructive criticism. That is the right thing to do.