Banking (S.I., 2008, No. 432)

My hon. Friend makes an important point. The proposals set out in the business plan are for the contraction of the overall Northern Rock business, returning it to its more modest roots and putting it on a more sustainable footing. As a result, it is proposed that staffing should be reduced by about a third. We have had discussions with One NorthEast, and Northern Rock has had discussions with Unite trade union, to consult on job losses and make sure that people receive proper support to find new jobs. There are vacancies in the financial sector in the north-east, and it is important, when there are job losses on such a scale in a particular area, that serious support is available to help people find new jobs. Had we not stepped in in the autumn, which was the right thing to do to protect the financial stability of the banking system, we would have seen job losses across the board. We would have seen Northern Rock go under, so it would not have continued to be a significant employer in the north-east. The business plan envisages that Northern Rock will continue as a significant employer in the north-east, with a viable future for the operation. My hon. Friend also raised the issue of remuneration. He will appreciate that it is not for the Government to set the remuneration of banks. The remuneration of the previous chief executive was set while Northern Rock was in the private sector. However, my hon. Friend is right that staff, depositors and shareholders will all look at those arrangements with some concern, and he is right that remuneration committees in future should reflect on those arrangements. Opposition Members have proposed a series of alternatives and it is right to consider them seriously. However, it is also right to point out that at no stage have the Opposition suggested how any of them would work in practice. They proposed putting Northern Rock into administration. That would have made it impossible to reconstruct the bank. It would have triggered insolvency processes, depressed the price that would have been obtained on any sale of assets, and forced the sale of assets into a market in which a credit squeeze is continuing. It would not have been a good deal for the taxpayer. The Opposition say that the new powers proposed under the special resolution regime should be used. Those powers do not yet exist and Northern Rock needs to be dealt with now, not in 12 months when a new banking Bill has been introduced. It needs to be dealt with now. That, in the end, is the problem with Opposition Members. They will not face up to the consequences for Northern Rock, which need to be dealt with now. They hop about from one position to another. None of them makes sense. How on earth can they promote financial stability in the banking system when they cannot establish stability even in their own policy? Northern Rock got into trouble last year as a result of its business model and the serious turbulence in the financial markets at the time. The Bank of England and the Government stepped in. Now we have to see it through. Temporary public ownership was the right decision for the taxpayer, for financial stability and for consumers. It has provided Northern Rock with the chance to restabilise and to restructure itself at best value to the taxpayer so that it can be returned at the earliest possible opportunity to the private sector. The decision to bring Northern Rock into temporary public ownership was the right way to meet the objectives that we set out, and right for financial stability for the taxpayers and consumers. The Opposition were wrong to oppose it and they would be wrong to vote against the transfer order today.