Darling defends Rock decisions
The chancellor is under pressure to explain the government's position over Northern Rock
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Monday, 19, Nov 2007 08:25
Chancellor Alistair Darling has defended the decisions he made during the Northern Rock crisis in parliament today.
Mr Darling said "it was right" to give the Bank of England support and maintained that "it is right to use this time to explore the best outcome for the company and the public interest".
His statement followed news from Northern Rock earlier today that bids it has received from potential suitors are "materially below" the beleaguered lender's current market price.
In a statement today the Newcastle-based bank revealed that it had received two types of proposals from those interested in the company – both plans to invest in Northern Rock - including injections of assets and new capital, and proposals to acquire parts of the business.
Mr Darling told MPs that Northern Rock should be allowed time to consider its strategic options and any solution will be assessed by the government to ensure that it "safeguards both the public interest and the specific interests of the taxpayer".
"It would be quite wrong to dismiss any option now without proper consideration as some suggest.
"I continue to believe it is right to use this time to explore the best outcome for the company and the public interest."
Shadow chancellor George Osborne had claimed that pressure is on the government to ensure the interests of the taxpayer were protected and the Liberal Democrats have suggested the government should temporarily assume control of Northern Rock in order to safeguard public cash.
Northern Rock first turned to the central bank for an emergency loan in September in the wake of this summer's global credit crunch.
The move prompted the first run on a British bank in almost 150 years, forcing the government to guarantee the savings of Northern Rock customers in order to restore confidence in the UK banking system.