Tories blame Labour's 'decade of debt'
Alistair Darling was challenged yesterday to disclose exactly what he "knew and when he knew it" in the run-up to the credit crisis.
The Tories called on the Chancellor to reveal whether he had received any prior warnings about Northern Rock's position.
George Osborne, the shadow chancellor, also suggested soaring personal debt under a decade of Labour could be a key factor in the crisis.
Vince Cable, the Liberal Democrat Treasury spokesman and a former chief economist at Shell, joined the attacks by warning that Gordon Brown as Chancellor had presided over mounting personal debt in Britain, which now stood at £1.3trillion.
He said he had warned Mr Brown three years ago of the problems and said that now, one pound in every five of average household income was going to service debt.
Separately, it emerged yesterday that Mervyn King, the governor of the Bank of England which is now assisting Northern Rock, would be questioned by the Commons' Treasury committee this week as part of a scheduled quarterly session on inflation.
But Mr Darling reacted furiously to the Tory challenge, accusing David Cameron of being "opportunistic" and insisting that his party was "fundamentally wrong" in its analysis.
Speaking on BBC1's Sunday AM programme, he said he had no advice as to whether people should queue to withdraw their money even though he insisted that Northern Rock was solvent.
"Northern Rock has got the money. So if people want to take their money out, they can get it out," the Chancellor said.
However, Whitehall sources revealed last night that Northern Rock was in discussion with possible buyers.
The brand is thought to have been irreparably damaged and a sale to a combination of banks is considered by Government sources to be inevitable.
But the Tories, convinced that denting Mr Brown's economic record could be crucial in ousting Labour, scent blood over how a crisis started by problems in the US "sub-prime" mortgage market has had such an effect on the UK.
Today, Mr Cameron will use a hastily-arranged speech in the City focusing on the economy.
Mr Osborne stressed that the Tories supported the Bank of England in its decision to help Northern Rock out.
But Mr Osborne added: "In the short term, we need to be told what Alistair Darling knew and when he knew it.
"When he attacked the behaviour of banks in a newspaper interview last week, did he know he was going to have to reassure the public about the banking system just a day later?
"In the longer term, we need to ask whether an economy built on debt during Gordon Brown's chancellorship has left the UK more exposed to this global financial turbulence than it should be."
Source: telegraph.co.uk
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