‘Uncertain future is facing the B&B’ (From Bradford Telegraph and Argus)

‘Uncertain future is facing the B&B’

9:38pm Monday 6th October 2008

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Chancellor Alistair Darling last night admitted it was impossible to say what will be left of Bradford & Bingley bank.

Speaking during an emergency statement in the Commons as MPs returned from their summer break, he warned of the uncertainty.

And he repeated that the Government will do whatever is necessary to ensure the stability of the financial system.

Shipley MP Philip Davies, who has been in talks with ministers and workers since the nationalisation, told MPs many of the employees of B&B were also small shareholders and had supported the firm.

He called for reassurance over what would happen to them now as the shares were worth around 50p each.

Mr Darling said: “I do understand the position because this is exactly what happened in relation to Northern Rock.

“A lot of people who are not big time share dealers, people living locally who thought they were doing the right thing, they bought the shares because they wanted to support their local company and then the company fails.

“We will do what is right but I am afraid at this stage it really is quite impossible to say what is going to be left at the end of the day because this bank frankly does have an awful lot of assets that at the moment are not worth very much at all.”

The Chancellor also called for B&B and Halifax Bank of Scotland (HBOS) to do “everything they can” to maintain jobs.

He said: “And for those people for whom there won’t be jobs in the future to try and help them get jobs elsewhere.”

Making his speech flanked by the Prime Minister, Mr Darling earlier told a hushed House that the Bank of England would be injecting a further £40 billion into the financial system to help ease the credit crunch.

And in an implicit criticism of Germany, which has appeared to act unilaterally to safeguard all private savings accounts, he stressed the need for countries to act together to tackle the crisis.

Mr Darling said the FSA had announced an increase from today to the compensation limit for retail deposits to £50,000, covering 98 per cent of all accounts. The FSA was consulting on whether to increase the limit further – to “ensure that arrangements here continue to be comparable with international best practice”.

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