MP under fire after attack on Rock ‘brand’

May 9 2008 by William Green, The Journal

ATOP Tory MP was under fire from Labour yesterday after questioning the Northern Rock “brand” amid efforts to rebuild the bank.

Shadow Postal Affairs Minister Charles Hendry suggested post offices should be allowed to offer more financial services to help secure their future, but questioned if any would deal with Northern Rock.

“I don’t think there would be any interest in the post offices doing that. I think that they would be uncertain about being associated with a bank in that position. I am not saying it is not a good bank, but given the problems it has had that they would rather have a brand name which had a much better reputation,” said Mr Hendry.

Up to a sixth of the region’s post offices could shut under a national closure scheme, added Mr Hendry in the run-up to a public consultation on proposals in Tyne and Wear, Northumberland and Durham due to start in July.

Labour’s Jarrow MP Stephen Hepburn branded Mr Hendry’s comments over the Rock as a disgrace, adding: “It is a bizarre thing to say when we are trying to build up the bank.”

The row came as Rock shareholders launched a legal challenge to fight for compensation after prices dropped following nationalisation. The UK Shareholders Association is submitting an application for a legal review into the nationalisation terms. It promotes the interests of the approximately 150,000 small private shareholders who held as much as 25% of the shares.

Robin Ashby, of the Northern Rock Small Shareholders Association, said: “The small shareholders don’t have the money or the appetite for long drawn-out legal processes. However, they are very supportive of the position being done by the larger share holders and believe that this is the only way we are likely to get a fair offer to the expropriation of a company by nationalisation.”