UK Parliament discusses nationalisation of Northern Rock

February 19, 2008

The UK Parliament has been discussing the proposed nationalisation of the troubled UK bank Northern Rock. If the bill is passed it will be the first such move by the UK government since the 1970s.

The bill was introduced by Yvette Cooper from the UK Labour Party. Philip Hammond (Conservative) responded by saying that the bill should only apply to Northern Rock as if a similar crisis happens again parliament should carry a new bill through parliament. Hammond also said that the House of Commons were not given enough time to discuss the bill. Simon Hughes (Liberal Democrats) said he accepts nationalisation is required but that he thinks the bill should be passed through over a longer period of time to allow the House of Commons to fully review the bill.

Conservative Members of Parliament said lots of conventions in lawmaking had been broken in the bill. Yvette Cooper responded to this saying that she hopes Members of Parliament will "understand the unusual circumstances" of the situation regarding Northern Rock.

The UK Chancellor of the Exchqequer, Alistair Darling has defended the bill by that some of the powers are necessary not only to "transfer ownership from" the private sector but also to "transfer ownership back" to the private sector. He also claimed that part of the powers granted by the bill were supported by the Conservative Party who have stated that they wish to oppose the bill. He also said that Northern Rock would have gone bankrupt if the government had not intervened.

Shadow Chancellor of the Exchqequer, George Osbourne responded to the Darling's statement by saying that the parliament should be made aware of the risks of buying Northern Rock. For example, Osbourne said that the pension deficit of Northern Rock should be released to parliament to allow them to make a more informed decision on the nationalisation.