Taxpayers' interests put first - PM
18 February 2008
The Prime Minister has stressed that the Government "will and always has put the interests of the taxpayer first" in dealing with the troubled Northern Rock bank.
Speaking at his monthly press conference in Downing Street, Mr Brown said that placing Northern Rock in temporary public ownership was "the right decision" and that it would have been wrong to accept a private bid whose conditions were not appropriate. The move to acquire the bank was announced yesterday by the Chancellor, Alistair Darling.
The Prime Minister added that the Government was right to intervene when Northern Rock ran into difficulties last summer, ensuring that the bank did not fail and that instability did not spread throughout the economy.
The PM said:
"We have steered a course of stability through difficult times and so my message is: stability is our watchword and will remain so; to protect savers and to secure the best interests of taxpayers; we have the strength to take the long-term decisions and the strength to see them through."
Mr Brown said that developments in the Government's handling of the Northern Rock crisis should be seen in the wider context of the impact of the credit crunch across the globe. There had been a sharp downturn in the US economy, some of the biggest write-offs in the history of the financial sector, and state intervention in the rescuing of three German banks.
The UK had been put in a strong position to deal with the current global economic turbulence due to low inflation and low interest rates, achieved in part through the disciplined staging of public sector awards, he added.
Asked about the running of Northern Rock in public ownership, the Chancellor said it would operate independently and "at arm's length from government", with newly appointed chairman Ron Sandler free to make "normal commercial decisions". Mr Darling confirmed that he would make a statement to the House of Commons on the takeover later today.
The PM added that it was the Government's attention to return the bank to private sector ownership "as quickly as possible" but only when market conditions were right.
Image copyright: Reuters
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