Northern Rock debacle and cover-up

Some people may be a little confused by the exchange between Vincent Cable and Gordon Brown at yesterday's PMQs. The emphasis is mine.

"Dr. Vincent Cable (Twickenham) (LD): ...This morning, the Chancellor wrote to me about Northern Rock and the Government’s commitment to minimising the cost to the public purse. Can the Prime Minister confirm that the Government have now lent £24 billion of taxpayers’ money to that small mortgage bank—twice the amount of public expenditure on primary schools every year, and four times the aid budget?

The Prime Minister: First of all, we are guaranteeing the deposits of savers—that is well understood—and we are bringing forward legislation in the House. That is absolutely the right thing to do, to move from the situation in 1982, when we guaranteed only 90 per cent. up to a certain amount, to guaranteeing 100 per cent. up to the amount that will be specified when the legislation is introduced. As far as Northern Rock is concerned, matters about what is actually happening within the company are obviously of commercial confidence. I gather that the stories in the newspapers this morning are about papers unrelated to the Treasury, the Bank of England or the Financial Services Authority, and only to Northern Rock itself. I cannot comment on those confidential papers.

Dr. Cable: The arguments about commercial confidentiality are absolutely bogus. Why should the taxpayer have rights inferior to those of the managers, directors and shareholders of the company? If the Prime Minister cannot tell me how much money has been lent, can he give the House an assurance that the loan will be paid back in full, with interest, in the lifetime of this Parliament?

The Prime Minister: I think the hon. Gentleman—to be fair—knows exactly what the situation is. Secured lending is being given in relation to Northern Rock, guaranteed against Northern Rock assets. However, that is a matter about the future of Northern Rock, and it would not be in the best interests of Northern Rock or its investors to speculate on possible buyers and other possible interest in the company. I hope that the hon. Gentleman agrees that such information should at the moment remain commercially confidential."


What is happening is that the The Financial Times published an investment memorandum, the so called "Northern Rock summary" obtained by their Alphaville blog. Since then this blog entry has been taken down following a High Court Judge's injunction. If you want to know what the document revealed then I suggest that a Google search might be in order. We do know that Vince Cable asked Gordon Brown yesterday if "the Government have now lent £24 billion of taxpayers’ money to that small mortgage bank".

I suggest you research this matter for yourself, it is after all your money that Gordon and Alistair have used to prop up this bastion of Labour banking.