Banking (Special Provisions) Bill

There really is only one issue before the House this evening, and that is the question whether nationalisation of Northern Rock is appropriate at this time. There is a secondary issue if a decision is taken to nationalise—although it would have arisen whether the bank was nationalised or not—of what happens to Northern Rock in business terms in the future. If the Government had announced in September in response to the difficulties of which they were notified by Northern Rock that nationalisation had to take place immediately, there would have been an outcry from the Opposition. They would have said that the Government had not given time to think about what the issues were, that the Government's action was ideologically driven and that it was a return not to the 1970s but to the 1940s. The Government were right to ask what were the issues before us. The Government were clear, and they had the support of the British people—people in Newcastle, shareholders, workers and even the Conservative party—when they said that the issue was not only about Northern Rock. Northern Rock is an important issue—believe me, it is in my constituency—but it is also important for Britain's financial markets. From the Government's point of view—I say this coming from Newcastle—the key issue is the future of the financial markets in Britain. They are a massive employer, they make a massive contribution to our economic growth, and they are important to our reputation as a trading nation. The Government made the right decision, which was to say that if the problems of Northern Rock spilled over into other sections of the financial community there would be serious problems for everyone, including even worse problems for Northern Rock. What the Government did then of course helped to bolster Northern Rock, and that was welcomed more by depositors than anyone else, as was shown by their response. I supported what the Government said then, which was that Northern Rock would not stay as it was. There were three ways forward: to close the business as quickly as possible and sell off any assets; to find a private sector solution that could lead the business forward; or to nationalise the bank, which is the third option that we are dealing with today. It was right to try to find a private sector solution, and that was supported by the trade unions in Newcastle because they know, as I know, that people who have experience of retail banking and the mortgage business realise the pitfalls and know what is necessary to make the business tick. If we could have found as a nation a private bidder to take over Northern Rock in a sensible way, that would have been by far the most desirable outcome. I am pleased that we have the support of the Liberal Democrats today on nationalisation. They were somewhat premature in jumping to the conclusion that nationalisation was inevitable, but that in a sense is history; it is behind us now. I believe that today the House will be overwhelmingly in support of the nationalisation of Northern Rock because there is no alternative. If we do not nationalise, there will be immediate damaging consequences for Northern Rock and for the rest of the financial industry, even today. That is how we must go forward. I must say that I am still not clear what the Conservative position is. I do not want to wind this debate up into a big rhetorical battle between us and the Conservatives, but I have listened to what has been said on the radio and in some media outlets, and the message being sent clearly to the British people is that the Conservative party is against nationalisation, full stop, and that whatever happens to Northern Rock, its shareholders and its workers as a result of no nationalisation just happens. According to the Conservatives, if the consequence is that the business goes bust, people are laid off and the shareholders get nothing because Northern Rock is a business without value—the Conservative Front-Bench team has confirmed it today—we as a nation generally, and those of us in Newcastle, who have a special interest, must all live with that. If that is not the Conservative position, I would be extremely grateful if someone could tell me what it is.