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| Fight to limit Rock job cut plan | |
| (about 2 hours later) | |
| Northern Rock bosses and union leaders have criticised Virgin Group's plans to cut jobs at the troubled bank. | Northern Rock bosses and union leaders have criticised Virgin Group's plans to cut jobs at the troubled bank. |
| The BBC has learned up to 1000 jobs could go if the Treasury accepts Virgin's rescue proposals. | The BBC has learned up to 1000 jobs could go if the Treasury accepts Virgin's rescue proposals. |
| Virgin has abandoned a commitment to no redundancies because government-backed bonds to be issued by Northern Rock have to be repaid within three years. | Virgin has abandoned a commitment to no redundancies because government-backed bonds to be issued by Northern Rock have to be repaid within three years. |
| Northern Rock's current management, who have submitted a rival plan, said it will fight to prevent job cuts. | Northern Rock's current management, who have submitted a rival plan, said it will fight to prevent job cuts. |
| Its deputy chief executive David Baker, who is part of the team working on the restructuring bid, told the BBC it was "determined to get Northern Rock back on its feet". | |
| Rival plans | Rival plans |
| "We are going to build up new business lines. That will go some way to mitigate any reduction in job losses," he said. | "We are going to build up new business lines. That will go some way to mitigate any reduction in job losses," he said. |
| The chancellor has decided that the priority is speedy repayment of all those taxpayer loans, even if it means job losses Robert Peston, BBC business editor Read Robert's thoughts in full | The chancellor has decided that the priority is speedy repayment of all those taxpayer loans, even if it means job losses Robert Peston, BBC business editor Read Robert's thoughts in full |
| But Virgin Money boss Jayne-Anne Ghadia, who would run Northern Rock in the event a Virgin rescue was accepted by the Treasury, told the BBC that job losses were unavoidable. | But Virgin Money boss Jayne-Anne Ghadia, who would run Northern Rock in the event a Virgin rescue was accepted by the Treasury, told the BBC that job losses were unavoidable. |
| "We're confident we can make forward payment to the taxpayer in less than three years. And part of that solution is reducing the size of the bank going forwards," Ms Ghadia told the BBC. | "We're confident we can make forward payment to the taxpayer in less than three years. And part of that solution is reducing the size of the bank going forwards," Ms Ghadia told the BBC. |
| Employee figures are expected to come down from 6,000 to about 5,000. | Employee figures are expected to come down from 6,000 to about 5,000. |
| Fighting back | Fighting back |
| The Unite union is meeting with Virgin on Thursday to discuss the impact of its proposals. | The Unite union is meeting with Virgin on Thursday to discuss the impact of its proposals. |
| "The staff of the bank remain their greatest asset, it is vital that the bidders recognise this," Unite's deputy general secretary Graham Goddard said. | "The staff of the bank remain their greatest asset, it is vital that the bidders recognise this," Unite's deputy general secretary Graham Goddard said. |
| On Friday, the government told all potential rescuers that up to £40bn of Treasury-backed bonds to be issued by Northern Rock would have to be repaid in between one and three years. | On Friday, the government told all potential rescuers that up to £40bn of Treasury-backed bonds to be issued by Northern Rock would have to be repaid in between one and three years. |
| Shrinking mortgage book | Shrinking mortgage book |
| The staff of the bank remain their greatest asset, it is vital that the bidders recognise this Graham Goddard, deputy general secretary, Unite union | The staff of the bank remain their greatest asset, it is vital that the bidders recognise this Graham Goddard, deputy general secretary, Unite union |
| In order to do that, any rescuer - including Virgin - would have to shrink the size of Virgin's mortgage book from more than £100bn to about £60bn. The smaller the business, the fewer people it would need to service them. | In order to do that, any rescuer - including Virgin - would have to shrink the size of Virgin's mortgage book from more than £100bn to about £60bn. The smaller the business, the fewer people it would need to service them. |
| "In other words, the chancellor has decided that the priority is speedy repayment of all those taxpayer loans, even if it means job losses in Newcastle," BBC's business editor Robert Peston said. | "In other words, the chancellor has decided that the priority is speedy repayment of all those taxpayer loans, even if it means job losses in Newcastle," BBC's business editor Robert Peston said. |
| "The government may be embarrassed by the disclosure that job losses would stem from financial conditions imposed by the Treasury," he added. | "The government may be embarrassed by the disclosure that job losses would stem from financial conditions imposed by the Treasury," he added. |
| The tight repayment deadline is thought to have ruled investment fund Olivant out of the race to control the Newcastle firm. | The tight repayment deadline is thought to have ruled investment fund Olivant out of the race to control the Newcastle firm. |
| Are you worried about your job? Have you been affected by the issues covered in this story? Send us your experiences using the form below. | Are you worried about your job? Have you been affected by the issues covered in this story? Send us your experiences using the form below. |