Labour

NAO to investigate Osborne's loss-making sale of Northern Rock

The National Audit Office has agreed to conduct an independent report into the value for money of Chancellor George Osborne’s sale of Northern Rock Plc.

The move comes in response to a letter from Labour’s shadow financial secretary to the Treasury Chris Leslie, who today welcomed the inquiry and urged George Osborne to consider delaying the sale until the NAO can assure the public that it is the right way to proceed.

George Osborne announced on 17 November the sale of Northern Rock to Virgin Money for just £747m, which means a loss of between £400m and £650m to the taxpayer.

On Monday George Osborne will make a statement on the government's response to the Vickers report on banking reform.

Chris Leslie MP, Labour’s shadow financial secretary to the Treasury, said:

“There is clearly strong evidence to suggest that this Northern Rock firesale represents poor value for money for the taxpayer and this investigation by the independent National Audit Office confirms that serious questions hang over George Osborne's deal.

“The Chancellor should consider delaying the sale, due on 1st January, until the NAO can assure the public that it is the right way to proceed.

“At present there is the possibility that those buying Northern Rock could asset strip so much from the firm that they get back virtually every penny they invest within a matter of months. Ministers haven't thought through this deal carefully enough - they have a duty to do better than this."