UK government under fire for selling Northern Rock "for a song" to Branson
18 November 2011
UK chancellor of the exchequer George Osborne has been accused of letting the state-owned Northern Rock go "for a song" yesterday.
Osborne announced the sale of the nationalised bank at a loss of at least £400 million to the taxpayer (See:UK government to sell Northern Rock to Virgin Money in a £1 billion deal)
According to the chancellor, the deal under which Sir Richard Branson's Virgin Money would take over Northern Rock for £747 million, possibly rising to £1 billion represented good value.
However, the agreement led to fresh apprehensions over whether ministers would be able to finally obtain a reasonable return from the state's £50 billion rescue of the Lloyds Banking group and Royal Bank of Scotland in 2008.
The sale of Northern Rock comes around four years following the last Labour government's nationalisation of the troubled Newcastle-based lender which suffered the first run on a British bank since the 19th century.
It plunged into crisis due to its heavy exposure to the American sub-prime market and for some time was, at serious risk of collapse until the intervention.