LABOUR leader Ed Miliband has been challenged to support a public inquiry into the collapse of Northern Rock.
Thousands of small share-holders who lost their stake in the bank when it was nationalised were refused compensation when the High Court upheld a ruling that the bank was effectively worthless by the time it was taken into public ownership.
Campaigners have argued that Northern Rock was not treated by the Government in the same way as other banks, such as RBS, and it was the then-Government’s failure to guarantee savings that sparked the ‘run’ which saw savers withdraw millions of pounds.
Sunderland-born Dennis Grainger is chairman of the Northern Rock Small Shareholders’ Action Group and was a lead claimant in the legal campaign for a review of the terms of the compensation scheme set up by the Government after the bank was nationalised.
Now he has written to Mr Miliband asking him to back an inquiry into the bank’s collapse.
“At the time of the nationalisation, those representing the small shareholders argued nationalisation was unjust, and Northern Rock plc was a solvent bank,” says the letter.
“As was said by the shareholders at the time, it was clear the Rock was suffering from a liquidity problem and was not insolvent.
“The ‘embedded value’ contained in its shareholders’ assets was considerable and, as anticipated, has now resulted in a substantial profit for the Government.
“Northern Rock’s nationalised assets will yield the Government a multi-billion pound surplus over and above both the loan repayments and the penal rate of interest it has had to pay; yet at the same time the thousands of ‘little people’ have received nothing at all.
“Meanwhile other banks benefited from huge sums of taxpayers’ monies without their shareholders losing all of their company. The North East’s Rock was treated differently.
“We believe only a full public inquiry will get to the bottom of what really happened. The truth needs to be found as to what took place when its assets were seized and whether it is fair that none of the huge riches now being made will be returned to its rightful owners.
“A public inquiry will offer the opportunity for fairness and justice and that is all we seek.”