Northern Rock plc Compensation Scheme Order 2008

My Lords, whenever we discuss Northern Rock it is like Groundhog Day in that the same questions and assumptions turn up. People are desperate to understand what happened. For me it is straightforward. Had there been any chance of making Northern Rock work, sooner or later a private company would have found a plan that was acceptable to the Government. As regards what was alleged to have happened with Lloyds-TSB, even at the time it was clear to everyone—certainly to me—that it would not have got beyond first base under the EC rules on competitiveness. I do not think that anybody could take that bid seriously. It is quite straightforward: the bank collapsed, the Government had to save it and now we are trying to pretend that it had some value independently of the circumstances. What we have seen in the market apart from Northern Rock are hedge funds such as Peloton, worth $3 billion one day and nothing three days later. We have seen what has happened to the Cargill corporation, which borrowed 31 times its assets and is therefore about to go bust. If people do irresponsible things they will go bust, and if shareholders put their money in such companies they do not get anything out of it, whether they are in Hong Kong or elsewhere. If shareholders invest in a company that goes bust, they do not get anything out of it. It is not a case of the UK Government confiscating these assets; they are worth nothing. I hope that my noble friend will put the record straight. It is very difficult for the assessor to say in one day that the value is zero. One has to pretend that this is a rather difficult problem and at least take a couple of days over it. However, there is no great mystery about what the assessor has to do. The sooner that is done, the better.