Chamber
Plenary, 01 Apr 2009
01 Apr 2009 · S3 · Plenary
Item of business
Dunfermline Building Society
I am not sure that Iain Gray fully understands the nature of the payment to Nationwide of £1.6 billion. The payment was made because Nationwide has taken on the army of depositors and the liabilities, but many of the assets have been retained in the tripartite arrangement. As I said, informed commentators—I was referring to Robert Peston, who finds things out long before anyone else does—have estimated that the final liability for the Treasury might be as low as £10 million.
The Nationwide, which is a highly reputable institution, has got the most amazing deal out of the process, as it acknowledged this morning. It is delighted with the quality of the asset base and indeed of the staff who have come into the society. There is no doubt that that is a great investment from the Nationwide's point of view.
The preferred outcome, not just for me but for many members and, I think, for the Chancellor of the Exchequer during the negotiation, was for the Dunfermline to trade on with an independent, sustainable future. The losers in the outcome are the members of the society, who did not even get a vote on its future, and the risk to headquarters staff in Dunfermline is real, despite the Nationwide's best efforts, as is the risk to Scotland of losing an independent financial institution.
Iain Gray asked what my preferred outcome would have been—it would have been to make the investment that was required to allow the institution to go forward into the future. If anything like the protection of assets that has, in effect, been available to the Nationwide had been available to the Dunfermline Building Society—perhaps even a tenth—that is exactly what could have happened.
The Nationwide, which is a highly reputable institution, has got the most amazing deal out of the process, as it acknowledged this morning. It is delighted with the quality of the asset base and indeed of the staff who have come into the society. There is no doubt that that is a great investment from the Nationwide's point of view.
The preferred outcome, not just for me but for many members and, I think, for the Chancellor of the Exchequer during the negotiation, was for the Dunfermline to trade on with an independent, sustainable future. The losers in the outcome are the members of the society, who did not even get a vote on its future, and the risk to headquarters staff in Dunfermline is real, despite the Nationwide's best efforts, as is the risk to Scotland of losing an independent financial institution.
Iain Gray asked what my preferred outcome would have been—it would have been to make the investment that was required to allow the institution to go forward into the future. If anything like the protection of assets that has, in effect, been available to the Nationwide had been available to the Dunfermline Building Society—perhaps even a tenth—that is exactly what could have happened.
In the same item of business
The Presiding Officer (Alex Fergusson):
NPA
The next item of business is a statement by the First Minister on the Dunfermline Building Society. The First Minister will take questions at the end of his ...
The First Minister (Alex Salmond):
SNP
Thank you, Presiding Officer, for the opportunity to make a statement to Parliament on the Dunfermline Building Society.Everyone in the chamber will have fol...
Iain Gray (East Lothian) (Lab):
Lab
I thank the First Minister for allowing early sight of his statement.This afternoon it is surely most important to welcome the fact that the assets of the cu...
The First Minister:
SNP
I am not sure that Iain Gray fully understands the nature of the payment to Nationwide of £1.6 billion. The payment was made because Nationwide has taken on ...
Annabel Goldie (West of Scotland) (Con):
Con
I thank the First Minister for providing an advance copy of his statement. It is extremely sad that the Dunfermline Building Society, a name that is synonymo...
The First Minister:
SNP
I welcome the fact that Annabel Goldie thinks that the demise of the Dunfermline Building Society is a matter of sadness. I think that it is, too, and most p...
Jeremy Purvis (Tweeddale, Ettrick and Lauderdale) (LD):
LD
Customers of Northern Rock could have warned the First Minister not to use Robert Peston as his adviser on the best interests of customers of the Dunfermline...
The First Minister:
SNP
I was not claiming Robert Peston as my financial adviser; I was merely saying that he is usually informed before the event of any announcements—so it appeare...
The Presiding Officer:
NPA
We come to back-bench questions. We will get everybody in as long as everybody is fairly short and sharp.
Tricia Marwick (Central Fife) (SNP):
SNP
I welcome the First Minister's very full statement. Is he aware of the fury in Fife that the Dunfermline Building Society, which had been in existence for 14...
The First Minister:
SNP
In very constructive discussions this morning, Nationwide undertook to have a continuing dialogue. Tricia Marwick's latter point is important and we will cer...
Helen Eadie (Dunfermline East) (Lab):
Lab
I declare an interest as a Labour and Co-operative Party member who always values the chance to advocate mutuals.On Monday morning, I woke up to the good new...
The First Minister:
SNP
Frankly, I simply do not understand that last point. I understand that Mr Rennie was in close contact with the management of the Dunfermline over the past tw...
Gavin Brown (Lothians) (Con):
Con
The First Minister said that the Dunfermline's social housing portfolio has been placed in a bridge bank that is wholly owned by the Bank of England to allow...
The First Minister:
SNP
Gavin Brown should read the chancellor's statement from Monday, in which he said specifically that the Scottish Government would be consulted on the future o...
Jim Tolson (Dunfermline West) (LD):
LD
As the local member for Dunfermline West and the area that contains the building society's headquarters, I think that it is at this point extremely important...
The First Minister:
SNP
Yes—that would be highly appropriate. Mr Bernau's conversation with me and Mr Swinney this morning was very positive and constructive. Indeed, perhaps becaus...
Margo MacDonald (Lothians) (Ind):
Ind
I hope that Jim Tolson will forgive me. I will be looking back because I do not have immediate responsibility for the future of the employees. The process is...
The First Minister:
SNP
As Margo MacDonald well knows, I am not a lawyer. It does seem strange that a mutual society can effectively be broken up without a vote by its members. That...
The Presiding Officer:
NPA
If I am to fit everybody in, I will need short questions and short answers from now on.
Sandra White (Glasgow) (SNP):
SNP
I declare an interest as a member of the Dunfermline Building Society. I have certainly spoken in support of Margo MacDonald's position and suggestion.Given ...
The First Minister:
SNP
Of course, it is a parliamentary matter for the Finance Committee to decide what inquiries it wants to conduct. Any minister would be best to leave it to par...
David Whitton (Strathkelvin and Bearsden) (Lab):
Lab
I welcome the First Minister's statement that responsibility for what has happened to the Dunfermline rests with its management. I am sure that that will com...
The First Minister:
SNP
I do not think that only Fifers will be furious at the loss of an independent Scottish financial institution: there will be fury across the country. Perhaps ...
John Park (Mid Scotland and Fife) (Lab):
Lab
The job situation has been the most concerning thing throughout the process. We are concerned that lots of people in the head offices do not have the job gua...
The First Minister:
SNP
We have not to date had such dialogue for the obvious reason that the situation has been developing. We asked that question of the Nationwide this morning, a...