Thursday, November 17, 2011

CPO Press Release on the sale of Northern Rock to Virgin Money

The Campaign for Public Ownership strongly condemns the government’s decision to sell the publicly-owned Northern Rock bank to Virgin Money for £747m, meaning an effective loss of between £400m and £650m to the British taxpayer.

The history of privatisation is littered with examples of the government short-changing the taxpayer and this is yet another one.

The government could have kept the bank in public ownership. Failing that, it could have returned Northern Rock to the mutual sector, but only at a time when the transaction would have made taxpayers a profit. While the profitable part of Northern Rock is being sold off, the taxpayer is left holding Northern Rock (Asset Management), into which was placed the company‘s bad debt. It is a classic case of privatising the profits, while nationalising the losses.