Northern Rock
Philip Dunne challenges the Chancellor of the Exchequer over the Chief Secretary's comments that the independent valuer should treat Northern Rock as though it were in administration.
Mr. Philip Dunne (Ludlow) (Con): During the recess, the Chief Secretary wrote to me admitting that the independent valuer should treat Northern Rock as though it were in administration. Has the Chancellor appointed a valuer? Does he expect ordinary shareholders to receive any value, given that they rank below £400 million-worth of preference shareholders? And does he now recognise that Northern Rock is effectively in administration?
Mr. Darling: It is not, and-as the hon. Gentleman knows, because he follows these matters-the compensation regime was set down in the Banking (Special Provisions) Act 2008, which Parliament passed in February. However, it is right for the valuation of the bank to be based on the fact that it owes rather a lot of money to the Bank of England. That was the reason for our proposals, which were accepted by the House. I believe that Members in all parts of the House accept that this is a bank that got into huge difficulties, and that if the Bank of England had not intervened it would have gone under. We must be fair not just to people who are involved with the bank, but to taxpayers as a whole.
