PMQs: Vince tackles Gordon on Northern Rock

by Stephen Tall on November 14, 2007

Our glorious acting leader, Vince Cable, once again proved what an asset he is to the party at this afternoon’s Prime Minister’s Questions, demanding to know (i) if it’s true that the Government has loaned Northern Rock a mammoth £24bn of taxpayers’ money; and (ii) if yes, that the money will be repaid with interest in the lifetime of the current Parliament. Unsurprisingly, Gordon ignored both questions.

It’s one of those imponderable ‘what ifs’ – but it’s interesting to consider what might have happened if Vince Cable, rather than Ming Campbell, had stood in the contest to succeed Charles Kennedy back at the start of 2006 as the ‘safe pair of hands’. An excellent media performer, popular in the Commons, respected by the commentariat: nothing seems to faze him.

Vince has handled his potentially tricky role with considerable aplomb; by contrast, Ming never quite recovered his balance from his early, nervy Commons performances as acting leader. But Vince quickly realised the party membership was unlikely to pick another balding 60-something to lead the party this time around – once bitten, twice shy – so it’s mere idle speculation.

Anyway here’s the transcript of his exchange with Gordon Brown:

Dr. Vincent Cable (Twickenham) (LD): This morning, the Chancellor wrote to me about Northern Rock and the Government’s commitment to minimising the cost to the public purse. Can the Prime Minister confirm that the Government have now lent £24 billion of taxpayers’ money to that small mortgage bank—twice the amount of public expenditure on primary schools every year, and four times the aid budget?

The Prime Minister: First of all, we are guaranteeing the deposits of savers—that is well understood—and we are bringing forward legislation in the House. That is absolutely the right thing to do, to move from the situation in 1982, when we guaranteed only 90 per cent. up to a certain amount, to guaranteeing 100 per cent. up to the amount that will be specified when the legislation is introduced. As far as Northern Rock is concerned, matters about what is actually happening within the company are obviously of commercial confidence. I gather that the stories in the newspapers this morning are about papers unrelated to the Treasury, the Bank of England or the Financial Services Authority, and only to Northern Rock itself. I cannot comment on those confidential papers.

Dr. Cable: The arguments about commercial confidentiality are absolutely bogus. Why should the taxpayer have rights inferior to those of the managers, directors and shareholders of the company? If the Prime Minister cannot tell me how much money has been lent, can he give the House an assurance that the loan will be paid back in full, with interest, in the lifetime of this Parliament?

The Prime Minister: I think the hon. Gentleman—to be fair—knows exactly what the situation is. Secured lending is being given in relation to Northern Rock, guaranteed against Northern Rock assets. However, that is a matter about the future of Northern Rock, and it would not be in the best interests of Northern Rock or its investors to speculate on possible buyers and other possible interest in the company. I hope that the hon. Gentleman agrees that such information should at the moment remain commercially confidential.