Skip to main content

Northern Rock: Nationalisation

Volume 474: debated on Tuesday 1 April 2008

To ask the Chancellor of the Exchequer what assessment he has made of the likely effect of nationalisation of Northern Rock on holders of Northern Rock's callable debt securities. (188188)

[holding answer 22 February 2008]: The Government have assessed the likely effect of temporary public ownership of Northern Rock on holders all of Northern Rock's debt securities. Northern Rock has no public debt securities which are callable by holders in the ordinary course.

To ask the Chancellor of the Exchequer (1) when he first received a draft of the Banking (Special Provisions) Bill; (188406)

(2) when HM Treasury first consulted (a) the Bank of England and (b) the Financial Services Authority on the proposals for the Banking (Special Provisions) Bill; what subsequent consultations took place; on what dates consultations took place; and when each institution was first sent a draft of the Bill;

(3) on what date HM Treasury officials commissioned drafting of the Banking (Special Provisions) Bill from Parliamentary Counsel.

[holding answer 22 February 2008]: Treasury officials undertook a range of contingency planning work in response to the events of September 2007 concerning Northern Rock, which included the development of possible legislative options. The Bank of England and the Financial Services Authority were involved in that work, including preparation of contingency legislation, and the Chancellor was kept informed throughout.

To ask the Chancellor of the Exchequer if he will make a statement on the extent and scope of his responsibilities and accountability to Parliament in relation to the activity of Northern Rock once the team responsible for day-to-day management of the bank under temporary public ownership of the bank is in place; what guidance he has issued to the Northern Rock management team on responding to correspondence from hon. Members; and on what matters relating to the policy, administration and operations of Northern Rock he will (a) answer parliamentary questions and (b) refer such questions to the Chief Executive of Northern Rock to respond (i) by a letter published in an answer in the Official Report and (ii) directly to hon. Members. (190568)

During this period of temporary public ownership, Northern Rock is managed by its board at arm's length from Government on commercial principles.

As the Chancellor said in a statement to Parliament on 18 February 2008, the framework agreement on the relationship between the Government and Northern Rock will be published shortly.