Is Northern Rock heading back to the mutual sector?
The future of Northern Rock is shrouded in mystery today after the Labour Party issued a pledge in its manifesto which could see the company return to the mutual sector. It is believed that the Labour Party is in favour of allowing depositors to retain ownership of the company via a takeover by another mutual or indeed to encourage the likes of Richard Branson to adopt a mutual society model if he does acquire the business.
This is something of a change in policy from the UK government which has for many months now been touting Northern Rock for sale. The separation of the "bad bank" and the "good bank" has been controversial in itself and indeed it has left UK taxpayers with a potentially massive liability from low quality loans and mortgages. The truth is that unless UK taxpayers receive back a significant chunk of their money used to bail out the business there will be further dismay in the public arena.
Northern Rock has become something of a millstone around the neck of the UK government and despite a pledge to look towards a mutual society arrangement in the future this is unlikely to satisfy all taxpayers in the UK.
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