Northern Rock Debate
Philip Dunne challenges the Chancellor of the Exchequer over assurances that the bank is solvent and asks if the Treasury has undertaken an independent assessment.
Mr. Philip Dunne (Ludlow) (Con): In his hat trick of humiliating statements, the Chancellor has told us that he is accepting the proposal in order to protect taxpayers. If that is the case, what independent assessment has the Treasury undertaken of the quality of the loan book? A year ago Northern Rock was writing mortgage business at two and a half times its market share, at a time of unprecedented house price inflation. It is highly likely that a large proportion of those mortgages will turn sour. Is the Chancellor relying entirely on the FSA's assurances that the bank is solvent, or has he bothered to do a bit of independent checking himself?
Mr. Darling: The FSA is responsible for regulating Northern Rock. Ron Sandler and his new management team will want to make their assessment relating to the revised business plan on the basis of what they know about the bank, and they will make it their business to find out all that they need to know about it.
