PM refuses to comment on 24 billion pound question

by Richard Kilner

Story link: PM refuses to comment on 24 billion pound question

Prime Minister Gordon Brown was asked by Acting Lib Dem Leader Vince Cable at PMQs yesterday to confirm the government loan to struggling Northern Rock was £24bn in size.

Mr Brown, however, refused to comment on the sum, replying that he could not refer to the size of the taxpayer bail out to the bank as the reports were confidential.

Mr Cable retorted that such an argument was ‘absolutely bogus’ and requested a promise that the entirety of the loan would be fully paid back within the current Parliament’s lifetime.

The Prime Minister answered by saying that the loan was secured against the assets held by the ailing bank.

Mr Brown went on to say that the government would guarantee savers’ deposits, and would soon introduce legislation to increase the guaranteed amount to 100%, from 90%, to a threshold that has yet to be decided.

The Prime Minister’s refusal to comment on newspaper reports about Northern Rock were, he said, because the reports were unrelated to the Financial Services Authority, Bank of England or Treasury and were confidential papers of Northern Rock.

This argument did not impress Mr Cable, who demanded to know why taxpayers should have rights inferior to those involved in the running of Northern Rock.