No Rock sale until 'price is right'

The government is in "no hurry" to sell off the profitable parts of the Northern Rock, chancellor Alistair Darling has said. Skip related content

Darling told MPs that assets of the lender would not be sold until the "price offered is right" and it could get its money back.

During question time, the chancellor also said that in principle he had no difficulty with the idea of the "good" part of Northern Rock moving to become a building society rather than a bank.

Liberal Democrat Treasury spokesman Vince Cable asked what process was in place to ensure that the good assets in Northern Rock were not sold off.

The EU had approved the dividing of Northern Rock into a "good" bank that would hold savers money, with a much larger bank holding the majority of loans.

Cable asked why the government was not coming forward with the proposal, which he said runs risk of being "very bad value for money for the taxpayer".

In response, Darling said the government was in "no hurry at all to sell."

"Indeed we will not sell these assets in relation to Northern Rock until the price that is offered is right, that we get our money back," he said.

He added: "The reason we divided it up is because otherwise you would have had to put even more capital into Northern Rock, whereas what I'm proposing is that we can sell off."

Treasury select committee chair John McFall said many of the loans within the assets holding company could "come good in the long term".

McFall called on the chancellor to take on board the issues of competition and to not rule out the "possibility of mutualisation of the company."

Darling said he would like to see increased diversity within the banking system.

"I have no difficulty with the concept of a mutual, provided there were funds available coming from outside government sources to do that," he added.