George Osborne Flogs Northern Rock to Virgin

November 17, 2011 | By Paul Mackenzie Ross | Filed in: finance, politics.

I just read this story on the BBC – Northern Rock sold to Virgin Money

If you watch the BBC’s clip and listen to George Osborne,  he says:

…I think this is going to be a good thing for British Consumers…

Possibly. Then he goes on to mention:

…It’s also good for British taxpayers, we’re getting some of the money back…

What?! SOME of the money back? So the British taxpayer, via the government’s hand on the purse strings, throws £1.4billion into Northern Rock plc and gets just £747m back?! BBC business editor Robert Peston has estimated that there *could* be a further £280m back to the treasury but that, overall, the taxpayer will have lost out to the tune of between £400m and £650m.

So, at a time when people are losing their jobs, unemployment is rising, inflation is still at 5% and the world economy is still looking rather (pardon the pun) “rocky” the Chancellor of the Exchequor, the man in control of Britain’s economic and financial matters, just pisses away half a billion pounds of our money!

I was hoping, because these banks had effectively been nationalised, that there would be some sort of effort to ensure they were profitable and that the taxpayer would get a positive return on his/her investment. Only in August was Ron Sandler, the chairman of Northern Rock, saying that eventually the taxpayer would be “well rewarded”. But no, not through the sale of Northern Rock plc to Virgin Money at a whopping 50% discount but that the other side of the business, Northern Rock Asset Management (NRAM) with it’s ring-fenced toxic debt of more than £20bn that will apparently and eventually reap dividends for us.

With over 3,000 low level employees sacked at the zenith of the financial crisis, Northern Rock still managed to make a loss of some £232.4 million in 2010, and yet pay the remaining staff over £13 million in bonuses!

So what I want to know is why did Virgin Money get such a good deal on Northern Rock plc at a 50% discount, where’s the other half a billion pounds, and when is the government going to stop wasting our money? A lot of people worked hard to put one and a half billion pounds worth of tax money into the pot, so to get only half back is a complete insult!


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