delusionofgrandeur

The emergency bill for nationalisation of failed bank Northern Rock was debated to the end of it’s second reading last night in the House of Commons and some rather interesting facts were thrown at the government who were represented by chief secretary to the treasury Yvette Cooper.

First of all, the Guardian newspaper, back at the end of November last year discovered that 70% (some £53 billion) of Northern Rock’s loan book was held by an off-shore operation known as Granite based in Jersey. Granite is not owned by Northern Rock.

This, of course, came out last night in the commons and it became quickly clear that the public would not be receiving ownership of Granite which holds the ‘good’ assets of Northern Rock. A well prepared Tory pointed out, due to contractual obligations, Granite would also be able to pull in further assets from Northern Rock after the bank has become nationalised!

Conservative MP Ken Clarke said:

“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.”

The best Yvette Cooper could do was attempt a truculent look which instead conveyed an expression of extreme discomfort. Clearly she was none the wiser and had been badly briefed on the Granite situation (if at all!). She was apparently unable to answer questions from members with regard to Granite.

Liberal Democrat spokesman Vince Cable put it well:

“What is going on here appears to be not public ownership of Northern Rock but an asset-stripping operation designed to benefit whoever, we don’t know. This is a very serious development.”

I don’t think there was a third reading for the Commons (I fell asleep) so the bill now passes to the House of Lords who will hopefully tear it to shreds and save us from being sold down the river (yet again).

Also of interest is the draft text [pdf] of the bill itself. It makes no mention whatsoever of ‘Northern Rock’. Effectively, the legislation could be used to nationalise any UK bank. It makes one wonder just how many banks Labour intend to nationalise.

Tags: asset stripping, granite, jersey, ken clarke, nationalisation, northern rock, uk, vince cable, yvette cooper

This entry was posted on Wednesday, February 20th, 2008 at 12:21 pm and is filed under Economy, News, Politics.You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.