Cable quizzes Darling on the banks

10.46.34am GMT Mon 16th Feb 2009

• [Feb 12]: Vincent Cable: IS it not becoming increasingly clear to the Chancellor that the ferocious resistance of the management of these banks to the Government's full takeover of them, albeit on a temporary basis, is motivated by a desire to protect bonuses and salaries, . .

. . to resist write-downs and loss declarations and to protect cynical tax avoidance schemes? When will the Government avoid this farcical and completely ineffective arm's length management arrangement?

Alistair Darling (Chancellor of the Exchequer, HM Treasury; Edinburgh South West, Labour) : I do not agree with everything that the hon. Gentleman says. First, I believe that it was necessary to take Northern Rock into public ownership on a temporary basis, but I do not believe that we should seek to take over banks as a matter of course. They are better being commercially run, and I think that the hon. Gentleman and I would both agree that the Government cannot be in the business of running these banks in the long term. However, disclosing the nature and the extent of losses, and providing a greater degree of transparency, is absolutely necessary and we will continue, especially as we work out the insurance scheme of the assets, to ensure that people completely understand the nature of the liabilities that the banks have entered into.

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