Government to sell off bank assets

A buyer is being sought for Northern Rock after George Osborne signalled that the Government is to start selling off its massive banking assets

A buyer is being sought for Northern Rock after George Osborne signalled that the Government is to start selling off its massive banking assets

First published in National News © by

George Osborne has signalled that the Government is to start selling off its massive banking assets - with a buyer being sought for Northern Rock.

The Chancellor used his annual Mansion House speech to insist it was time for the taxpayer to "plan our exit" from the sector.

He also fleshed out plans for a regulatory shake-up, backing the creation of "firewalls" around banks' retail arms.

Mr Osborne admitted that UK plc had faced a series of "headwinds" domestically and internationally over the past year.

But pointing to Wednesday's encouraging unemployment figures, he insisted the economy was "on the mend".

Selling Northern Rock - a potent symbol of the turmoil caused by the credit crunch - would demonstrate that confidence was returning to the banking sector, Mr Osborne said. It was also "an important first step in getting the British taxpayer out of the business of owning banks".

Contenders for the business include Sir Richard Branson's Virgin Money, the Coventry and Yorkshire building societies, investment groups NBNK and Olivant and Tesco Bank.

Mr Osborne said: "Images of the queues outside Northern Rock branches were a symbol of all that went wrong, and its chaotic collapse did great damage to Britain's international reputation.

"Its return now to the private sector would help to rebuild that reputation. It would be a sign of confidence and could increase competition in high street banking.

"We could start to get at least some of our money back."

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