NORTHERN Rock could be nationalised halfway through January if taxpayers’ debts can not be paid back, a North MP said last night.
Berwick MP Alan Beith last night told The Journal he believed civil servants had been authorised to consider what type of legislation would be needed to nationalise the troubled bank, and suggested a draft bill could be ready early next year.
Northern Rock is thought to have borrowed £25bn from the Bank of England, and may be a further £5bn in debt by the time any sale is reached in February.
The Liberal Democrat politician has called on the region’s MPs to “stop demonising” his colleagues for suggesting alternatives to an “increasingly unlikely sale”. Mr Beith said: “While the region’s Labour MPs have attacked us for daring to suggest the bank be nationalised, their own Government is preparing draft legislation to nationalise the bank.
“I know they have asked the civil service to look at preparations for the draft bill.
“If either of the potential bidders can come up with the huge sum of money required to buy out the bank and repay the tax payers then everyone will be delighted, but the risk of that not happening is very high and that is why the Government is drafting this bill which will do just what the Liberal Democrats have suggested.
“We have a situation in which North-East Labour MPs demonise the very idea of nationalising a bank while their Government is working on the legislation needed to do just that. We are unlikely to have any action before Christmas, and while there is an aspect of ‘wait and see’ we can not wait for long because it is not doing the bank any good.”
Last week Mr Beith warned MPs in the House of Commons against the delaying a solution to the Northern Rock crisis, and questioned the use of tax payers’ money to prop up the bank.
He said: “For heaven’s sake, if we can have billions of pounds of Government money to help the North-East, which certainly needs help, would we choose to put money on such a scale into a failing bank?
“What about all the other things that we need in the North-East, such as our infrastructure, the A1, fast rail links, schools, universities to build up our skills base, and new businesses?”
His comments follow statements by a number of the region’s Labour MPs accusing the Lib Dems of talking down the bank’s future while the Government looks for a private sale.
The Government yesterday played down talk of draft legislation.
A Treasury spokesman said “all options were been considered” and insisted the preferred option was still a private sale.