Northern Rock to stay in the North East

Oct 29 2009 By William Green and Adrian Pearson, The Journal

Mr Hoffman’s warning put him at odds with left-wingers who want the bank to stand aside from the risks a high-street lender often takes to raise money.

Unite’s national officer for financial services, Rob Macgregor, said: "Northern Rock’s de-mutualisation a decade ago was a disaster. Establishing it as a building society would inject more competition into financial services and give the bank back to its customers."

Prime Minister Gordon Brown’s spokesman said yesterday’s European Commission announcement was "good news for Northern Rock".

The spokesman added: "The Government remains committed to, at the right moment, selling Northern Rock.

"There are a number of options for that, but that is the priority for the Government as the next step."

Newcastle Central Labour MP Jim Cousins said the Rock must be sold quickly or face a "risky" future when the Government guarantee for deposits ends, which he said could happen within months.

Mr Cousins, a member of the Commons Treasury committee, said: "The likely removal of the guarantee means that now we must reduce the uncertainty about Northern Rock to the minimum and that means we must look to a sale of Northern Rock in the fairly near future.

"For Northern Rock to be on its own without the protection of guarantees, I think is really not something that is in anyone’s interests. It is too risky to leave it on its own."

James Ramsbotham, chief executive of the North East Chamber of Commerce, said the Rock was a great regional institution.

"We expect that it will continue to rebuild and that by separating the two sides of the business will ensure it has a strong, healthy future for centuries to come."

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