At Prime Minister’s Questions today Labour MP Malcolm Wicks demanded answers from David Cameron on the sale of Northern Rock, given the history of the failed bank. Cameron failed to address Malcolm Wick’s point that the sale of Northern Rock to a private owner, Virgin Money, does not learn the lessons of the Rock’s failed privatisation which led to its collapse in 2007. The Co-operative Party has been campaigning for Northern Rock to be returned as a new building society to benefit taxpayers, customers and home buyers.

Mr Wicks asked:

Would the Prime Minister agree that the history of Northern Rock represents a modern day morality tale? In that here we have a decent mutual and respsonsible building society which is then privatised, overextends, goes bust and is bailed out by the taxpayer. Sadly, instead of returning to mutuality, it is sold off dirt cheap to one of the brashest companies in England.

 
David Cameron did not mention mutuality in his answer, but instead claimed that the sale of Northern Rock represented good value to taxpayers due to the possibility of increased mortgage lending. However the Co-operative Party has asked a series of questions about the deal with Virgin, including whether or not this is a good deal for home buyers given that much of Northern Rock’s existing equity which could be used to increase mortgage lending has been tied up to fund the deal.

Perhaps it is time the Prime Minister takes a closer look at the Northern Rock deal and re-considers the benefits of mutuality, as outlined by the Co-operative Party.

You can watch Prime Ministers Questions here.