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Northern Rock's 'best assets' NOT to be nationalised

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    Northern Rock's 'best assets' NOT to be nationalised

    Brown accused over Northern Rock

    http://news.bbc.co.uk/1/hi/uk_politics/7254451.stm

    Gordon Brown has been accused of failing to answer questions on Northern Rock, including why its most profitable part will not be nationalised.

    Tory leader David Cameron also demanded to know how long the bank would be publicly owned and why it was exempted from Freedom of Information laws.

    He told MPs Mr Brown's lack of openness would "make Fidel Castro proud".

    Mr Brown said the government had acted in taxpayers' interests and said the Tories had no credible alternative.

    The government is rushing through emergency legislation to nationalise Northern Rock after efforts to find a private buyer failed.

    But opposition MPs are concerned it has not done enough to protect taxpayers if the bank runs into further trouble.

    'Rubbish' assets

    There is particular concern about the role of Granite - a Jersey-based trust set up by Northern Rock in 1999 to package up and sell on its best mortgages to investors - which owns about half of the bank's assets.

    Granite contains about £45bn of Northern Rock's most profitable mortgages but it will not be nationalised - leading opposition MPs to claim taxpayers will be left with the "rubbish" in the bank's mortgage book.

    Mr Cameron and Lib Dem leader Nick Clegg both raised the issue at prime minister's questions in the Commons.

    Mr Clegg said the way the nationalisation had been handled was "jeopardising the interests of the British taxpayers". Mr Brown insisted "stability" was the government's "watchword" - and Granite would "not affect the sale of Northern Rock to a private buyer".

    Responding to questions from Mr Cameron, Mr Brown said it was necessary to exempt Northern Rock from freedom of information laws because of commercial confidentiality.

    'Student politics'

    He claimed the Conservatives had been through six different policies on Northern Rock, with their latest set of proposals amounting to "fire sale" of its assets.

    Mr Cameron described the prime minister's answers as "feeble" as several other publicly-owned companies were subject to FoI laws.

    He said Mr Brown had failed to say what the total liability to the taxpayer would be over Northern Rock, how long the public would own it and why half of its mortgages would be left in private hands.

    Mr Brown accused Mr Cameron of reducing the Northern Rock issue to the level of "student politics" and said the government had acted in the best interests of taxpayers.

    'Asset-stripping' claim

    Clashes are also expected later in the House of Lords as peers debate the nationalisation of Northern Rock.

    The Lib Dems are threatening to vote against it setting up the possibility of the bill 'ping ponging' between the Lords and the Commons as the government battles to get it on the statute book by its deadline of Thursday.

    Lib Dem treasury spokesman Vince Cable earlier accused chief secretary to the Treasury Yvette Cooper of not knowing what was happening to the mortgages held by the offshore trust.

    "Ministers have so far completely failed to answer how the continued existence of Granite will be anything other than an asset stripping operation, designed to protect this segment of the bank's activities while the taxpayer is left with unsecured loans and high risk mortgages.

    "The shambolic performance of ministers in Parliament last night (Tuesday) smacks of a Treasury that is out of control.

    "The government must explain how it will ensure that taxpayers will not end up picking up the scraps of Northern Rock from Granite's table."

    Mr Cable has written to Chancellor Alistair Darling to ask why Granite will not be nationalised and, although the Lib Dems support nationalisation, they will vote against it in the Lords if they do not get a satisfactory explanation.

    Jobs 'threat'

    In Tuesday night's debate, Ms Cooper insisted the government had made the position on Granite clear and taken everything into account and that taxpayers would not be made to the foot the bill if it collapsed.

    "It is a separate legal entity, it will not be covered by the order - but equally it was not covered by the government guarantees and we have made that clear from the beginning," she said.

    But former Conservative chancellor Kenneth Clarke persisted: "The best assets are in Granite.

    "It looks as though there is a contract enabling more assets to be drawn in and it is the rubbish in the assets that we are now nationalising."

    Labour MP John McDonnell said he was writing to the chancellor to demand an explanation of Granite's role, which he said increased the burden on the taxpayer and put Northern Rock jobs at risk.

    Emergency legislation to nationalise the stricken bank was rushed through the Commons in a single day on Tuesday, with the government hoping to get in to the statute books by Thursday.

    #2
    I'm really warming to Dave.

    Messers Clegg and Cable also seem quite adept and putting the boot in.

    Perhaps we will finally get something resembling an opposition.

    The Northern Crock is an unfolding disaster the like of which UK banking hasn't seen in modern times.

    Had it been the Home Counties Building Soc. on the skids, I suspect things might have been handled in a less lenient fashion.

    You've come right out the other side of the forest of irony and ended up in the desert of wrong.

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      #3
      Is that you AtW??

      Bought a red pen instead of a thick black one??

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