DEPUTY Prime Minister Nick Clegg has been accused of only offering “weasel words” over the future of Northern Rock.
Newcastle Central MP Chi Onwurah spoke out after the Deputy Prime Minister appeared to rule out any prospect of the bank being returned to its mutual society roots in an interview with The Journal.
Mr Clegg said the coalition Government supported greater mutualism in the UK banking sector, but added the “trajectory” for the Rock was “pretty clear”.
Ms Onwurah, whose constituency is home to the Rock’s headquarters, also hit out at Treasury Minister Mark Hoban after receiving a response to a letter she sent asking about the bank’s future.
Mr Hoban said that the Government was “committed” to promoting mutuals and would welcome bids from existing mutual companies as part of the sale process. He also said any prospective buyers would be asked to set out their plans for the branch network and head office.
“As a range of options continue to be considered, it is not possible to elaborate further on the impact of a specific option at this point in time,” said the Treasury minister.
Ms Onwurah said: “Mr Clegg and Mr Hoban are experts at weasel words. They say they want to promote mutualisation and here Mr Clegg is sending a pretty strong message against mutualisation to potential bidders.
“Mr Clegg says taxpayers need a return on the money they have put into Northern Rock. But the Government should be taking a long-term view.
“The best return for taxpayers is a stable banking system which will never cause a global economic meltdown again.”
The Labour MP added: “Having another me-too bank like all the others is unlikely to achieve that. But a mutualised Northern Rock could, and the Co-op Society and leading economists have shown how that could be done.”
Dave Anderson, Labour MP for Blaydon, accused Mr Clegg of “following the typical Tory line to get it off the public books and take long-term risks when we don’t need to”. He said: “This is about addressing their deficit reduction plans rather than what is best for the bank and its customers.”
Northern TUC policy and campaigns officer Neil Foster said: “It is now in the national interest for ministers to encourage a mutual owner to ensure these benefits and to generate a better deal for the country and taxpayers.”
In his interview, Mr Clegg said: “I think the trajectory for Northern Rock is pretty clear. I just happen to be a huge supporter of greater mutualism in our banking system. And as a general rule we as a Government want to see greater mutualism in our banking system.”
But he added: “We also need to make sure that taxpayers get a return on the money they put in to saving Northern Rock and other banks, and to take the advice seriously that we have received from the arms-length bodies that have managed Northern Rock and other nationalised banks about how they should be put back into private hands.”
The deadline for potential bidders for the Rock has now passed. It is thought that Richard Branson’s Virgin Money are the favourites to secure the business, with American private equity giant JC Flowers also in the running.
