At a loss over Northern Rock sale

• This week we hear that chancellor Osborne has agreed to sell to his Tory friend Northern Rock at a £400m discount to what was invested in 2008 ( Taxpayers to lose out by at least £400m as Virgin buys bank , 18 November). Wow! What a steal when many from all over the globe wanted to get their hands on this, but Tricky Dickie has been coaxing the government for this jewel for the past two years (even when Brown was around). Watch this space for the breakup of RBS and the cheap offloading of Coutts private bank when they have used a small fortune this past year to get it independently ready for a sale – another cheap steal deal at the expense of the British taxpayer. When will this monkey business stop? David Thompson London • The sale of Northern Rock is a potentially game-changing moment for the retail banking industry. However we should not forget that Virgin Money will be a tenth the size of its major UK competitors, taking over just 75 branches. This raises the question of whether it will pursue the traditional model of a large branch network or attempt to embrace a simpler and more agile service, led by mobile banking. Consumer behaviour is changing, with more people banking on the move. As technologies converge and services such as the mobile wallet allow consumers to manage their affairs on a single device, companies can capture live, accurate data on their customers and tailor their services in response. Realising the potential of mobile could allow Virgin Money to differentiate itself from its competitors and offer simpler and more convenient services. This will become a template for success that could revolutionise the banking industry. Chris Tighe-Ford London • As the trade association for co-operative and mutual enterprises, Co-operatives UK is disappointed by the government's decision to sell Northern Rock to Virgin Money. Deciding not to mutualise NR, despite calls from a range of stakeholders, does not sit well with the government's oft stated support for co-operatives and mutuals. Yet since the start of the credit crunch, co-operatives have grown by 21%, while the UK economy as a whole has stagnated. The government had a real chance to show the strength of its commitment to co-operatives and mutuals. It's a shame for NR's customers and the wider economy that it passed it up. Ed Mayo Secretary general, Co-operatives UK • Oliver Steward's proposal that we "open a state bank on the high street" ( Letters , 18 November) reminds me that Harold Wilson set up just such a bank, National Giro, and through the Post Office, as Mr Steward suggests. Loans and overdrafts were not permitted – a concession to secure the reluctant, but essential, cooperation of the joint stock banks – but an arrangement with Mercantile Credit offering "loans through Giro" circumvented this and, within three years, Giro had turned the Post Office from a loss-making concern to one of the most profitable in the country, while offering charge-free banking to those receiving their "pay through Giro". Needless to say, under Thatcher's regime Giro was sold to Alliance and Leicester, now part of Banco Santander. No doubt David Cameron and George Osbourne would have done likewise and Mr Steward's proposal will fall on deaf ears. Bill May Kirkcaldy, Fife • I think I've got it: in an economic crisis, caused by bankers, a bank fails, so we buy the bank for a fortune. Four years later, on the advice of bankers, we sell that bank to another bank losing another fortune. Money in the bank. Steve Illingworth Haworth, West Yorkshire • If Virgin Money offers its customers the same level of service as Virgin Trains, I can only wish them the best of luck. Ralph Jones Rochester, Kent • I was reading Larry Elliott's piece about the continuing rise in youth unemployment, when the BBC told me George Osborne had sold Northern Rock at a 50% loss. The two are directly connected. We have rising unemployment because of the absence of the investment which creates employment. Only a fool would take the risk of investing in a start-up, when the government sells off established operations at a knock-down price, which compete with businesses built up with risk and effort over an extended period. Little wonder the British entrepreneur is a extinct species. Labour's efforts to mitigate for the absence of private enterprise employment were dependent of the flow a tax receipts. The two also are directly connected. We are not going to reverse Britain's continuing decline, unless we all work together with a similar objective. We denigrate Mediterranean politicians as useless. Are our own any better? Martin London Henllan, Denbighshire • I wrote at the time of the Northern Rock crisis that we should recreate the TSB by decoupling the name from Lloyds to enable local groups to recreate what is needed by a large section of the community - a simple facility for savings and day-to-day financial transactions. We should also consider legislation to prevent a repeat of the MF Global situation – a $6.3bn position (bet ), when holding assets of $40bn and debts of $41bn! Casino banking of this kind is conducted every day in the City and it is a distraction from meeting the capital needs of SMEs, industry and commerce; only legislation will bring this sector back to its senses. Professor WRF Cunningham Newcastle upon Tyne • Nicholas Shaxson, in his book Treasure Islands, quotes Richard Branson as owning his business empire through a maze of offshore trusts and companies. Having just nursed a loss of over £400m on the sale of Northern Rock, this does not bode too well for the British taxpayer. Alistair Gregory Carnforth, Lancashireashire