PMQs: Vince tackles Gordon on Northern Rock (again)

by Stephen Tall on December 5, 2007

No quips today – acting Lib Dem leader Vince Cable returned to the scene of his triumph last week to quiz the Prime Minister on Northern Rock, demanding once again to know what guarantees Labour has received that the taxpayers’ loan to the troubled bank will be repaid – and why he still refuses to countenance temporary nationalisation to protect the interests of the British people.

(Rather bizarrely, Sky News’s Boulton & Co blog asserts that Vince “got lost with lacklustre questions” – which I think says more about their preference for Commons’ theatrics than it does about Vince’s pointed, and to-the-point questions.)

Anyway, here’s the exchange in full:

Dr. Vincent Cable (Twickenham) (LD): May I add my condolences on the loss of the soldiers in Afghanistan?

Now that the taxpayers’ loan to Northern Rock has almost reached the level of the annual defence budget and is increasing every week by £3 billion—the equivalent of 15 hospitals—what guarantees has the Prime Minister received that this money will be fully repaid, beyond the vague assurances offered by Mr. Branson and the assorted collection of hedge-fund sharks who are behind him and others?

The Prime Minister: The hon. Gentleman should make up his mind whether he wants Northern Rock to be rescued or not. The important thing, for the stability of the economy, the security of mortgage holders and the company’s shareholders, is that it be rescued. We have taken the necessary action. At one stage, there was all-party support for that. I believe that we have done the right thing, and any settlement with any potential buyer will insist that the public funds are properly protected.

Dr. Cable: There is a sensible way to rescue the bank. Why is the Prime Minister so dogmatically opposed to the common-sense solution of public ownership on a temporary basis, which would protect the public loan, the north-east and the depositors? Is it that he regards the advocates of that policy, which now include the Financial Times, The Economist and, apparently, his own civil servants as too left wing, or is he petrified by indecision?

The Prime Minister: I am beginning to think that the hon. Gentleman is better at the jokes than at economics. When he talks about Northern Rock and public ownership as a temporary solution, he means that we should try to find a private buyer. That is exactly what we are going to do. All options are on the table, but we are trying to find a private buyer.