Cable vs. Brown over Northern Rock

6.01.00pm GMT Fri 7th Dec 2007

Dec 05: Vincent Cable (Twickenham, Liberal Democrat): 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?

Gordon Brown (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.

Vincent Cable (Twickenham, Liberal Democrat): 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?

Gordon Brown (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.

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