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Vince Cable demands assurances that Rock sale is in public interest

Liberal Democrat Shadow Chancellor Vince Cable has written to Alistair Darling urging him to ensure taxpayers’ money would be safeguarded if Northern Rock was sold to Virgin.

He demanded assurances that any new owner would be UK-based and would guarantee against the bank’s best assets.

Cable says: “The Chancellor continues to hint that a deal with the Branson consortium is imminent yet we still have no assurances over when and how the taxpayer loans will be repaid.With a falling housing market Northern Rock’s asset book will become ever weaker. It is therefore critical that any bond package put together to repay taxpayers’ loans is only guaranteed against top quality mortgages. Without this the Government may well find itself just as out of pocket as it does now a few years down the line.”

Darling must also ensure the investment vehicle of the Branson consortium pays tax in the UK according to Cable who says it is “simply unacceptable” that a bank propped up by the UK taxpayer could be used to make profits for investors living in tax havens.

He says: “With it looking likely that even with a takeover deal taxpayers will continue to hold a financial stake for years to come, it is of utmost importance that Virgin’s bid is viewed on the basis of securing public funds, not its political attractiveness.”

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