Speaking at the House of Commons today he said that all options for Northern Rock will be looked at by the government and by UK Financial Investments (UKFI), the body that looks after state investments in the financial sector, before any proposals are bought forward.
When Hoban was asked by an MP whether the government prefers the option of remutulisation for Northern Rock, he said the government “is for mutuality” and that it does not object to the idea of Northern Rock returning to the mutual sector.
However he said the government is interested in “maximising taxpayer options” as well as looking at ways of getting its money back from the lender.
Hoban refused to give MPs a timeframe for the UKFI draft proposals on Northern Rock.
He said: “We don’t want to risk taxpayers’ money and so need to assess this thoroughly. This is at an early stage so it would be wrong to pre judge or set an artificial deadline.”
Hoban added that he and other government ministers are engaging with the Buildings Societies Association (BSA) on a regular basis to discuss the future of Northern Rock.
Last month over 100 MPs signed an early day motion calling for Northern Rock to return its original building society status.
The motion, tabled by Labour MP for Streatham and Treasury Select Committee member Chuka Umunna, argues that a thriving mutual sector adds to the diversity and strength of the UK’s financial system.
Umunna said: “Support is growing for remutualising Northern Rock both in Parliament and the country at large.
“Increasingly it is becoming clear that a mutual option will provide the best future for Northern Rock in terms of return for taxpayers, help for businesses, the stability and health of the financial services sector and the best deal for consumers.”
At the Building Societies Association conference (BSA) last week, trade body director general Adrian Coles said remutualisation remained an “unlikely prospect” as the deal was unlikely to return the “windfall” the Treasury wanted.
