MPs seek further details about sale of Northern Rock

NORTH East MPs yesterday demanded answers about the future of Northern Rock following its sale to Virgin Money.

NORTH East MPs yesterday demanded answers about the future of Northern Rock following its sale to Virgin Money.

Treasury Minister Mark Hoban was repeatedly asked in the Commons what would happen once pledges offered by Virgin Money run out – but sidestepped the questions.

The Government announced last week Sir Richard Branson’s Virgin Money was buying the bank for £747m, sparking fears taxpayers would be left with a £400m loss. Virgin Money said there will be no compulsory redundancies beyond those already announced by Northern Rock for at least three years from the expected completion of the deal on January 1 next year.

And Northern Rock’s current commitment to the Northern Rock Foundation will be extended, in respect of its existing business, until the end of 2013.

Tynemouth Labour MP Alan Campbell said in the Commons: “Will the minister give a cast-iron guarantee that the foundation will still exist beyond 2013?”

Mr Hoban said it was a matter for Virgin Money and the foundation to discuss, adding: “What Virgin Money have said as part of their agreement to acquire the business is to extend the existing arrangements until the end of 2013.

“And what they are very keen to see happen is Virgin Giving work very closely with Northern Rock Foundation so the Foundation can continue its’ excellent work in the North East and Cumbria.”

Veteran Labour MP Ronnie Campbell, who represents Blyth Valley, said: “This is three-year deal by Mr Goody Two Shoes, Mr Branson. What happens after three years in Newcastle?

“What happens to the people of Newcastle? Does he pull to London or does he go offshore after three years? Where’s the guarantee for these workers?”

The Treasury Minister said: “I think there is better guarantee of jobs under the current proposal than there was as Northern Rock continuing as it was.”

 

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