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Northern Rock

Volume 464: debated on Wednesday 10 October 2007

To ask the Chancellor of the Exchequer whether the guarantee announced for deposits in Northern Rock covers unlimited new deposits into existing accounts; and for how long it is expected to continue. (155740)

On 17 September I announced that, should it be necessary, the Government, with the Bank of England, would put in place arrangements that would guarantee all the existing deposits in Northern Rock Plc. These arrangements would continue during the current instability in the financial markets.

The Government have today announced that these arrangements will be extended to cover all new retail deposits in Northern Rock Plc. The arrangements will cover all retail deposits taken since 19 September. Northern Rock Plc will pay an appropriate fee for the extension of the arrangements, which is designed to ensure that the company does not receive a commercial advantage.