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Northern Rock

Volume 472: debated on Monday 3 March 2008

To ask the Chancellor of the Exchequer how much is due to be paid to the Virgin consortium from the public purse in relation to Northern Rock; and if he will make a statement. (188251)

[holding answer 25 February 2008]: As announced by Northern Rock on 26 November 2007, the company agreed to cover certain expenses in connection with the indicative proposal from the Virgin consortium. Paying such expenses is standard as part of bidding processes of this nature.

As a commercial bank, Northern Rock will pay these expenses out of its own income, not from the taxpayer.

To ask the Chancellor of the Exchequer what the quality rating of Northern Rock mortgage security is (a) within Northern Rock and not otherwise committed, (b) within Northern Rock and committed to the Bank of England and (c) committed to the Granite Master Trust. (188958)

[holding answer 25 February 2008]: The Financial Services Authority has confirmed Northern Rock continues to be solvent and has a good quality mortgage book.

Further information on the size and nature of the contractual relationship between Northern Rock and Granite is publicly available in the full Granite prospectus on the Northern Rock website.