Supermarket chain reported to have shown interest in nationalised lender

Tesco is considering a bid for Northern Rock as the government tries to sell off the nationalised bank before a general election.

Britain’s biggest supermarket chain is reported to have shown “provisional” interest in buying the bank which was nationalised in February 2008 as the credit crisis intensified.

The Times reports that Gordon Brown is desperate to avoid a Conservative government taking the credit for returning the lender to the private sector. Brown hopes that by selling the bank at a profit he can credibly claim to have aided the taxpayer.

A spokesman for Tesco described the report as “pure speculation”. Virgin, which considered buying Northern Rock after its 2007 collapse, is apparently showing renewed interest in the bank.

A Treasury spokesman said: “Any decision will be taken in the best interests of financial stability and of the taxpayer.

“Our only focus is our discussions with the European Commission around the restructuring of Northern Rock and the implementation of Northern Rock's new mortgage lending.”

Whitehall officials told the Times that they “would not be surprised” if the bank was sold before the next election.

Last week MPs said that the Treasury had been caught “flat-footed” by the collapse of Northern Rock and ignored warnings as early as 2004 of the bank’s unsustainable lending.

The Public Accounts Committee warned that the department “must never again be so ill-prepared”.

Post your comment

Please note: you will need to login or register before you can comment on the website