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| National Audit Office to investigate Northern Rock sale | National Audit Office to investigate Northern Rock sale |
| (40 minutes later) | |
| The sale of state-owned bank Northern Rock is to be investigated by the National Audit Office (NAO). | The sale of state-owned bank Northern Rock is to be investigated by the National Audit Office (NAO). |
| Amyas Morse, head of the NAO, said he would examine the sale to Sir Richard Branson's Virgin Money for £747m. | Amyas Morse, head of the NAO, said he would examine the sale to Sir Richard Branson's Virgin Money for £747m. |
| Mr Morse confirmed the probe in a letter to shadow financial secretary Chris Leslie. | Mr Morse confirmed the probe in a letter to shadow financial secretary Chris Leslie. |
| Labour is concerned the sale could lose £650m of taxpayers' money, while Chancellor George Osborne insists it represents good value. | Labour is concerned the sale could lose £650m of taxpayers' money, while Chancellor George Osborne insists it represents good value. |
| Mr Leslie had asked the public spending watchdog to delay the sale that so it could pre-assess the deal. | |
| However, in a letter to the Labour MP, Mr Morse said the NAO could only investigate a completed sale and could not intervene. | |
| "I can confirm that I have decided to conduct a value-for-money study in relation to the creation and sale of Northern Rock plc," said Mr Morse. | |
| 'Matter of urgency' | |
| "However, my role in conducting value for money studies is to act as an auditor, in this case of the completed sale transaction." | |
| He added that the probe would be carried out "as a matter of urgency". | |
| It is thought the investigation will report back before the Commons summer recess next year. | |
| Virgin Money struck a deal to buy Northern Rock for £747m in November, with the government saying it had got the "best possible deal" for taxpayers. | |
| It argued it was the right time to sell because Northern Rock was predicted to remain loss-making well into 2012. | |
| But Labour criticised the move, saying the government should have sought an extension on an EU deadline which requires the bank to be sold by the end of 2013. | |
| Chancellor George Osborne has said the deadline was negotiated by his Labour predecessor, Alistair Darling. | |
| Mr Leslie said on Saturday: "There is clearly strong evidence to suggest that this Northern Rock firesale represents poor value for money for the taxpayer. | |
| 'Asset-stripping potential' | |
| "This investigation by the independent National Audit Office confirms that serious questions hang over George Osborne's deal. | |
| "At present there is the possibility that those buying Northern Rock could asset-strip so much from the firm that they get back virtually every penny they invest within a matter of months. | |
| "Ministers haven't thought through this deal carefully enough - they have a duty to do better than this." | |
| Northern Rock was nationalised during the start of the global credit crunch in 2008. | |
| In 2010, the Labour government split the bank into two - Northern Rock plc, and Northern Rock (Asset Management). | |
| The bank's bad debt was placed in the latter, which remains saddled with the cost of being bailed out. It owes the Treasury £21bn. | |
| The government has said it has no plans to sell Northern Rock (Asset Management). |