The Rock will stay Northern, says Chancellor George Osborne

Northern Rock is being sold to Sir Richard Branson's Virgin Money.
Northern Rock is being sold to Sir Richard Branson's Virgin Money.
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CHANCELLOR George Osborne insists Northern Rock will stay in the North East.

Sir Richard Branson’s Virgin Money is to buy the nationalised Rock in a £747 million deal, the Treasury announced today.

Sir Richard Branson, whose Virgin Money is to buy nationalised lender Northern Rock in a �747 million deal.

Sir Richard Branson, whose Virgin Money is to buy nationalised lender Northern Rock in a �747 million deal.

The takeover of the Newcastle-based bank, which was taken into public ownership in February 2008, is expected to be completed by the end of this year.

The Government will receive an initial £747million with the potential to secure £1billion in total - less than the estimated £1.4billion it has injected into the bank during its period of public ownership.

Virgin Money failed in a bid to buy the bank following its collapse in 2007.

Chancellor Osborne said there would be a “powerful new presence on the high street” which would offer “real choice and competition”.

“It’s also good for British taxpayers - we are getting some of the money back that we put into the banking system under the last government.

“And it’s also good for the north east of England, because we are seeking to protect jobs there and make sure that the headquarters of Virgin Money will be in Newcastle.”

He added that the Treasury had taken independent advice on the deal and “looked carefully at all the figures”.

“It was clear to us that this was the best deal for the British taxpayer, we were getting more money back than any other deal on the table,” he said.

David Fleming, national officer for the Unite union, said: “The Treasury decision to sell Northern Rock to Virgin Money marks a significant moment in the history of this North East-based financial institution. After three years of turmoil and upheaval for the workforce at Northern Rock, Unite hope that today will be the start of a secure future.

“It is now vital that Virgin Money give Unite firm guarantees that the 2,500 Northern Rock workforce is protected. Since the near collapse of the bank in 2008 some 3,000 staff have lost their jobs. It is now time to rebuild this iconic brand.

“Unite welcomes the acknowledgement today by the new owner of the importance of Northern Rock for the North East region.”

Deputy Prime Minister Nick Clegg insisted the sale was “good value” for taxpayers.

Speaking at the Science Museum in London, he said: “The strong recommendation made to us was that this was the best value for taxpayers.

“Of course we have an overriding duty to provide good value for taxpayers, that’s what we have sought to do through that decision.”