Campaign to remutualise Northern Rock begins as boss quits
The queues that brought Northern Rock to the brink of collapse in 2007. Could its future be as a building society?
present and future has hit the headlines once again.
The departure of its Chief Executive Garry Hoffman was announced this morning.
He's off to join NBNK Investments, a new group with ambitions to beome a High Street bank.
His new employer could become a potential bidder for Northern Rock when and if the Government sells the nationalised bank off.
But there's some sensitivity about that possibility, given the advantage NBNK could get from having their future employee working inside Northern Rock for the next few months.
So Gary Hoffman won't be working out his notice.
Northern Rock has put him on gardening leave between now and April 30 next year. He'll still get £350,000 in salary plus his pension contributions paid.
Not an issue of great note if this was a private sector bank, but of course it is actually owned by the taxpayer.
As part of this deal NBNK has also agreed not to table a bid for Northern Rock for the next year.
But at the same time as this is going on, others are hoping they can prevent the sale of the bank to any private institution.
A meeting will take place on Friday of groups who want to see the bank remutualised into a building society.
The campaigners, which includes the , believe that Northern Rock should return to its roots.
They believe that will be the best option for the bank, its employees and the North East.
Any sell-off, they say, could see Northern Rock swallowed up by a competitor, with the potential loss of thousands of local jobs.
Remutualisation was certainly on the Lib Dem agenda before the election.
The Coalition though seems to have ruled it out as an option with .
commissioned by the left-leaning think tank though suggests a majority of the public would like to see Northern Rock turned back into a building society.
Of the 1,927 people questioned by YouGov, 47% favoured remutualisation, compared to 29% who thought it should be sold privately as a bank. (15% didn't know, and 5% favoured neither solution).
Compass' Chair Neal Lawson said: "British Banking is in a mess. It provides poor customer services and poor support for small businesses. It is clear that a private sale of Northern Rock now would just lead to more of the same bad practices without recouping the losses for the taxpayer.
"Re-mutualisation of Northern Rock would help provide greater choice and diversity for the consumer. It would also provide greater stability for the community.
"This poll shows that local people want to see Northern Rock become once more a rock of stability, ownership and pride for the people of the North East."
Campaigners may face an uphill struggle though. Selling off the bank is likely to prove more attractive to a cash-poor government than remutualisation.
I'm Richard Moss, the 91Èȱ¬'s Political Editor for the North East and Cumbria. Welcome to my irreverent - but hopefully insightful - northern take on reporting politics for Look North and the Politics Show.
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