Allegra Stratton, political correspondent
The Guardian, Friday 13 November 2009
http://www.guardian.co.uk/politics/2009/nov/13/mps-northern-rock-building-society
The pressure on the government to consider turning the bailed-out bank Northern Rock back into a building society rather than sell it off increased today as 100 MPs from all political parties signed a motion supporting the move. The signatories include five serving Labour committee chairs, 12 former government ministers and Vince Cable, the Liberal Democrats' Treasury spokesman.
Last month the EU gave the go-ahead for Northern Rock's assets and toxic debt to be split in two, with the "good bank" being returned to the market. But government officials let it be known that there were active debates over how the bank could instead be returned to partnership form, in which employees owned shares and risk-taking was muted.
Their championing of a return to mutual status for Northern Rock is meeting resistance from Treasury civil servants who feel the £14.5bn of taxpayers' money underwriting the bank should be returned to the exchequer as soon as possible. This week, the chancellor, Alistair Darling, said he had "no difficulty with the concept of a mutual", but would not spend more money to make it happen.
The signatories include the select committee chairs Terry Rooney, Phyllis Starkey, Mike Gapes, Kevin Barron and Barry Sheerman. Proponents say returning Northern Rock to mutual status - where it would be owned by its customers instead of shareholders - would help the government to restructure the landscape of British finance and eliminate the kind of excessive risk-taking that forced the state rescue of Northern Rock in 2007.
In a Lords debate on 4 November, Lord Davies, Labour's deputy chief whip in the upper house, said returning Northern Rock to mutual status had the support of peers from all sides of the house. He said: "The house will recognise that we have time on our side. We have no intention of selling, for example, Northern Rock in the immediate future, so we can begin to look at other constructive proposals."
