Alistair Darling has admitted publicly for the first time that the taxpayer could end up losing money in the multi-billion pound rescue of Northern Rock, a senior MP claimed yesterday. Financial Times, The Times.
In a letter to interim Liberal Democrat leader Vince Cable, Darling has written that one of his key objectives is 'minimising the cost to the public purse' of the bail-out, an apparent recognition that the bank’s crisis could end up costing the taxpayer money.
Previously, the chancellor had talked of his desire to 'protect taxpayers', who are underwriting Bank of England loans to the bank, which are thought to have reached £20bn so far.
The Chancellor will reveal within days how long the Government will continue its emergency support of Northern Rock, amid concerns that a lack of detail from the Treasury had hampered bidders from finalising detailed offers.
Alistair Darling yesterday gave the troubled Newcastle-based bank a 'few weeks' to settle on a rescue plan. 'We’ve got to reach a situation in the next few weeks where it’s clear what’s going to happen to Northern Rock,' he told Parliament.
Bankers advising on the sale of Northern Rock were sceptical that the deal would be concluded by Christmas, saying that bidders were unable to submit firm offers until the Government had provided clarity on its expectations.