Northern Rock

Catherine McKinnell Excerpts

Monday 21st November 2011 Commons Chamber

[Mr Hoban]

We went out of our way to encourage that. We spoke to various organisations that are keen to promote the idea of mutuality, but none of them could produce a workable model that would enable us to give money back to the taxpayer, and, as I have said, no mutual came forward with a bid in the final round. That was not for want of trying on our part. Clearly there was not the interest in the mutual sector in acquiring Northern Rock that people assumed to exist.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Of course my constituents in Newcastle welcome news that appears to offer some job security to many local people in the short to medium term, but will the Financial Secretary tell us what financial guarantees have been given to ensure that Virgin Money delivers on its promises?

[Mr Hoban]

Indeed. Councillor Nick Forbes, whom I quoted earlier, also said:

“The decision by Virgin Money to make Newcastle their home sends a message of confidence in our city and the wider North East.”

Virgin Money backed that up by saying that it would not make any compulsory redundancies beyond those already announced by management for the next three years, and I think that that provides a good level of assurance for Northern Rock’s staff.

When I visited Northern Rock on Thursday and talked to some of its staff, they were clearly pleased that the uncertainty that had hung over the business for the last four years and acted as a brake on its development had been removed. They look forward to its continued growth under Virgin Money.