PRESSURE is growing for the Northern Rock Foundation’s future to be safeguarded if the bank is sold.
Gateshead MP Ian Mearns has tabled a Commons motion urging Chancellor George Osborne to make continued support for the Foundation a condition of any sale of the Northern Rock bank – particularly if David Cameron wants to make good his talk of a Big Society.
The foundation is currently dipping into its £38m reserves to keep going. The previous Labour Government agreed to give it £15m a year after the bank was nationalised in 2008.
But it has since been told it will only get 1% of any pre-tax profits as the Rock most recently posted a £232m loss – and that agreement is not guaranteed after a sale of the bank.
Mr Mearns said: “We all know that the Northern Rock Foundation has done a fantastic job in backing projects that have changed many people’s lives for the better. We are very proud of our community spirit here and the foundation’s work goes with the grain.
“It’s not good enough for ministers merely to hope that it will be all right on the night.”
The Labour MP added: “The only way to avoid looking like they are whistling in the dark is to make it a condition of sale that the new owners keep funding the foundation. Failure to do this and David Cameron’s Big Society aspirations for places like the North East of England will be greeted with incredulity.
“Without initiatives like the Northern Rock Foundation, ministers’ pious hopes will be dismissed as mere platitudes.”
The move by Mr Mearns comes after he challenged North East-born Treasury Minister Mark Hoban about the situation – setting out how the foundation has handed out millions of pounds to deserving causes in the region.
Mr Hoban said it was an important point, adding: “We all recognise, particularly those of us with strong roots in the North East, the important work that the Northern Rock Foundation has done not only in the North East, but in Cumbria.
“An agreement was reached that Northern Rock would continue to contribute 1% of its profits to the foundation between now and December 2012.
“But I am sure that any bidder looking for support from the North East will think very clearly about the role that the foundation will play in future.”
