Northern Rock

John Redwood Excerpts

Monday 21st November 2011 Commons Chamber

[Mr Hoban]

Clearly, there are two parts to the Northern Rock business that the previous Government nationalised: the business that we are selling—Northern Rock plc—and Northern Rock Asset Management, which holds a lot of the old mortgage book. The previous Prime Minister assured the House that both would make a profit for the taxpayer.

[Mr John Redwood (Wokingham) (Con)]

I hope that Sir Richard Branson can turn this business into a profit-making, growing business, generating more jobs and paying some tax. Will the Minister remind us how much this bank has lost in state hands, which accounts for the fact that it is no longer worth what the Labour party paid for it?

[Mr Hoban]

The previous Government injected £1.4 billion-worth of capital into Northern Rock plc. That has gone down to £1.2 billion because of the losses incurred, and we expect further losses in this financial year and in the next. The challenge for Virgin is to use the platform it will have in Gosforth to grow the business, attract new customers and use its reputation for challenging incumbents.