David Cameron, interviewed by Jim Naughtie on Today at 8.10am, said that he did not agree with Vince Cable about bringing Northern Rock into immediate public ownership.  The taxpayer should not be exposed to further risk, he said, and a private sale was still the most desirable option.  If the possibilities of a private sale do fall through, however, any nationalisation of Northern Rock would amount to a "monumental failure" by the Labour Government.

The main focus of David Cameron’s interview was the housing market – a subject addressed on this page on Sunday.

He will be addressing the Council of Mortgage Lenders later and is set to call for social responsibility from Britain’s financial institutions and the pursuit of best practice in dealing with the end of fixed-term mortgage packages and sharing of credit information:

  • To avoid a regulatory answer to Britain’s looming difficulties in the
    housing market, David Cameron urged mortgage lenders to "taper" or "stagger" increases in interest payments
    when periods of fixed-term mortgages come to an end.  110,000 households are seeing fixed-rate packages expire every month and many are facing interest rate payments rising by a third.
  • The Conservative leader also called for more sharing of information between financial institutions.  The worst defaults for banks come from people who have already defaulted on previous loans with other institutions.

Currently in the middle of a series of high-level private meetings with major financial institutions, David Cameron is clearly communicating concern about Britain’s deteriorating economic situation but he is being cautious in making big policy recommendations.

Related link: Andrew Lilico’s Tuesday column examines how British politics would be changed by a recession.

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