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Govt must publish report into future of Northern Rock, says MP

The Government must publish the Deutsche Bank report which recommended Northern Rock to be returned to the private sector or the credibility of any sale would be destroyed, according to Liberal Democrat MP for Berwick on Tweed Sir Alan Beith.

Last week, Deutsche Bank presented its report looking at the options for the Government to divest itself of Northern Rock to the bank’s board and the body which looks after taxpayer stakes in the bailed out banks, UK Financial Investments.

The Treasury has confirmed the report calls on the Government to explore “options for returning Northern Rock to the private sector”.

Speaking to Money Marketing, Beith says: “If the Government makes a decision relying significantly on advice in the report we are entitled to know what that advice is. Not publishing it would destroy the credibility of any sale based on that advice.”

He says that those with the biggest stake in the decision, taxpayers who paid for the bailout, must be included in the conversation about what happens to the bank, which was nationalised in 2008.

He says: “Taxpayers and those who lost out because of this disaster need to be able to participate in the decision and not have it made behind closed doors on the basis of advice whose value and accuracy we have no way of assessing. If the Government comes to a decision remutualisation is impractical or undesirable, we need to know the basis of the argument so we can challenge it.”

A parliamentary motion tabled by Shadow business minister Chuka Umunna in January calling for “equal and due consideration” to be given to remutualisation has been signed by 109 MPs.

Beith says the Government does not necessarily have to get the highest possible return as long as it recovers the taxpayer money poured into the bank.

A Treasury spokesman says: “As part of the ongoing process of providing advice on strategic options for Northern Rock UKFI is recommending that options for returning Northern Rock to the private sector are explored. The Chancellor will take a decision on when and how in due course.” 

Deutsche Bank was called in by the bank in March to explore all options for the Rock including remutualisation and selling it to a mutual or back into the private sector.

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  1. Pissed Off IFA 3rd June 2011 at 1:26 pm

    This apology of a financial institution should have been pensioned off in 2007 and given us all a break. Northern Rock wanted to blame everyone except themselves for their troubles. In the ideal world, the company should be sold back into the private sector , the HMRC receive milliions for the sale. The taxpayer receives a cut in taxes.

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