22/02/2008

Parliament Approves Northern Rock Nationalisation

Parliament passed legislation on Thursday that will allow the government to make Northern Rock PLC, the first sizable British bank to be nationalised in 25 years.

On Thursday night, the House of Commons approved the nationalisation legislation by a margin of 126 votes. The bill then went back to the House of Lords, where its legislators first rejected three provisions of the bill. They later dropped their opposition without a vote.

The Liberal Democrats and Conservatives had argued over the last three days that Northern Rock's offshore special purpose vehicle Granite might be used to siphon off assets from Northern Rock.

Chancellor Alistair Darling has insisted that it is up to the new management team at Northern Rock and that it should have no impact on tax payers if they decided to wind it down.

The government must now obtain an order which transfers the bank to public ownership, powers which were awarded by the bill. An order which deals with compensation to the bank's shareholders will then follow.

(CD)

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01 May 2008
Job Cuts Planned At Troubled Bank?
Troubled lender Northern Rock plans to axe 2,000 jobs within three years, it has been reported. The bank has been struggling since last year due to unsettling financial conditions sparked off by the global credit crunch. Long queues formed outside the bank last September as savers tried to withdraw their savings.