Northern Rock

Jonathan Evans Excerpts

Monday 21st November 2011 Commons Chamber

[Mr Hoban]

We should think about those dates very carefully. It was demutualised in 1997 and failed in 2007. The hon. Gentleman needs to remember that the regulatory architecture put in place by the previous Government meant that Northern Rock could act as an outlier and become over-dependent on wholesale funding. Nobody did anything about that at a time when there was an asset price bubble in the UK economy. Those factors in the regulatory architecture led to some of the financial problems in the economy in 2007, 2008 and 2009. We are acting to strengthen the regulatory architecture, to tackle those problems and to ensure that the Bank of England has the powers it needs to supervise the banks properly and look at systemic threats to financial stability. We have also set up the Independent Commission on Banking, which is looking at ways of making the banking system in the UK safer while remaining competitive at an international level.

[Jonathan Evans (Cardiff North) (Con)]

My hon. Friend will recall that when he appeared before the all-party group for building societies and financial mutuals he was asked to arrange for the publication of the advice received in relation to UKFI and the start of this sale. Bearing in mind the reliance he has placed on advice today, when does he anticipate that advice being published?

[Mr Hoban]

My hon. Friend will understand from his own business experience that received advice can be subject to commercial confidentiality. I assure him that we looked carefully at the remutualisation of Northern Rock—that is why I went before his all-party group. We reached out to people in the mutuals sector who wanted to see the remutualisation of Northern Rock but, sadly, no one came up with a viable and workable plan to enable that to happen.