Downing Street Says » Northern Rock

Asked if the Government had contact with the European Commission regarding the nationalisation of Northern Rock and state subsidy laws, the PMS replied that the plan was that Northern Rock would submit its business plan to the European Commission to get state aid clearance within the coming weeks.

Asked if Northern Rock would be discussed at the Prime Minister’s meeting with President Barroso on Thursday, the PMS replied that he would not expect any substantive discussion on Northern Rock.

Put that the Conservatives had pointed out at a press conference that Northern Rock was still offering 125% mortgages and offering the highest deposit rate to people saving with them, and asked how comfortable the Prime Minister was with the taxpayer essentially underwriting those deals, the PMS replied that this was the current position. Mr Sandler had been up in Newcastle today, and he would be bringing forward his own business plans for Northern Rock. As the Chancellor and Prime Minister said this morning, obviously we did have a strict competition regime in the European Union in relation to state aid that would be to be adhered to.

Put that David Cameron had called on the Chancellor to resign, and asked if the Prime Minister had full confidence in the Chancellor, the PMS replied of course.

Asked if the bank would be able to solicit new business and encouraged to do so, or would it stop taking new business and generally run with its existing mortgage book, the PMS replied that these were matters for the new Executive Chairman Mr Sandler.

Asked what the general principal would be, the PMS replied that the general principle was the one that the Chancellor and the Prime Minister set out this morning, which was that Northern Rock would need to operate within the constraints of competition and state aid laws.

Asked if these were the only constraints, and did the Government want Northern Rock to expand its business if possible and return to health that way, the PMS replied that these were matters for Mr Sandler. Mr Sandler had been talking this morning in his press conference about the need to stabilise Northern Rock’s business.

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» Monday, February 18, 2008

Northern Rock

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