Branson ‘Sweetheart’ Deal Denied By Brown

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THE Prime Minister, Gordon Brown, was yesterday forced to deny that he was directly negotiating a ‘sweetheart’ deal with Virgin’s Richard Branson to allow him massive state aid to purchase the bankrupt Northern Rock bank.

Branson is one of the two dozen or so bosses accompanying Labour leader Brown on his trip to China and India, drumming up trade.

Brown said: ‘These are discussions that are taking place between finance directors and others of the commercial institutions involved, and I would never involve myself directly in negotiations such as these.’

Northern Rock bidder Branson is a member of the government advisers, ‘Business Council for Britain’.

Downing Street said yesterday he was invited by Brown as ‘a successful British businessman’ to seek to secure more trade with China and India.

Speaking in Shanghai before leaving for India yesterday, Brown added that the Northern Rock negotiations are ‘of a commercial nature led by the Treasury, and the Chancellor will make a statement to the House of Commons on Monday’.

Liberal Democrat treasury spokesman Vince Cable commented on Branson’s presence on the delegation: ‘It seems a very odd way to conduct business.

‘There are after all competing bidders.’

He asked why Virgin Group’s rival, the Oliphant Group is ‘not being given the same access’ to Brown.

Earlier, Brown had confirmed that talks are taking place to secure a private sale of Northern Rock.

He said: ‘Now we’ve been presented with a report that we commissioned from Goldman Sachs and it gives us a number of options for the future.

‘It’s right therefore to have the discussions with the private sector.

‘All options, including public ownership, on the road to moving the firm back into the private sector are on the table and are available to the government.’

But journalists travelling with the Brown party alleged that Brown had already privately approved a plan to make a sale to the private sector.

This involved selling off parcels of Northern Rock debt as Treasury-backed bonds.

Economists said this would see the Treasury continuing to fund Northern Rock to the tune of tens of billions of pounds, even if it remains in the private sector.

Cable added that he would have serious concerns about such a scheme.

He warned: ‘The taxpayer will still have complete liability and a private company is going to be invited to take over the bank for a very small price and use it as a licence to print money.’

Any deal will have to be agreed by mid-March, which is the expiry date of the European Commission’s acceptance of the public sector support currently being provided to the Rock.