Treasury Select Committee doubles down on concerns over Treasury sale of Northern Rock mortgages to US private equity firm Cerberus Capital

 
Lauren Fedor
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Northern Rock Seeks Emergency Help From Government
Customers queuing to remove their savings from a Northern Rock branch in 2007 (Source: Getty)

An influential group of MPs have raised red flags over the sale of £13bn of former Northern Rock mortgages to a US private equity firm, saying the deal may not have delivered good value for taxpayers.

In a letter today to Sir Amyas Morse, comptroller and auditor general at the National Audit Office (NAO), Andrew Tyrie, the Conservative MP who chairs the Treasury Select Committee, said he wanted assurance that the NAO's "Value for Money" study on the sale of former Northern Rock mortgages would address the Committee’s concerns.

Commenting on the letter, Tyrie said: "Customers and UK taxpayers both need assurance that they will not be adversely affected as a direct result of this sale. The Treasury has yet fully to address these concerns.

"If Cerberus is as robust towards new customers who fall into arrears as they are reputed to be with their current ones, then Northern Rock customers could lose out from the government’s sale of the Granite portfolio to Cerberus.

Chancellor George Osborne first announced last November that the government had struck a deal with Cerberus Capital Management, who had agreed to pay a £280m premium for the unsecured loans.

But some tax experts have warned that the deal may not have generated the best value for taxpayers given the way it was structured.

The Treasury Select Committee first said that it would investigate the deal last November.

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