The government announced this week that Northern Rock will be sold to Virgin Money. It was the right decision to take Northern Rock into public ownership in 2008 and the decision to now sell at least ends the uncertainty the staff have faced about their future.
However, serious questions remain about the timing and the manner of the announced sale.
The deal does not appear to be in the long term interests of the taxpayer. The government has offered no compelling reasons about why the sale needs to happen now, which suggests they believe that economic conditions are likely to worsen.
Attempts to blame the sale on EU rules are misguided. The agreement reached at the time the bank was nationalised allowed Northern Rock to remain within public ownership until 2013.
As it’s only 2011 there seems no need for undue haste to sell at a loss, and surely the government could have made the case for an extension to this agreement in light of the Eurozone crisis.
It is also disappointing that no real consideration appears to have been given to the remutualisation of Northern Rock, something that many people in the region supported.
While it is positive that Virgin Money have said that there will be no compulsory redundancies or branch closures in the short term, these assurances aren’t binding on the company.
We also need answers about the long term future of the Northern Rock Foundation, which has done such fantastic work with local charities.
I want the sale to be a success, but it’s hard to see how this can be achieved with what appears to be a firesale at the worst possible time.
Click here to view the original article published by the Sunderland Echo on Wednesday 23rd November 2011.