Thursday, 26 November 2009

Edward Leigh Demands Answers Over £61.6bn Secret Loans

Local Parliamentarian, Edward Leigh MP, Chairman of the Public Accounts Committee, has today written an angry letter to the Chancellor of the Exchequer, Alistair Darling MP, demanding to know why the £61.6bn loans to Halifax Bank of Scotland (HBOS) and Royal Bank of Scotland (RBS) have only just been made public.

Mr. Leigh has asked Alistair Darling to clarify if this is the case. His letter says:

"Thank you for your letter of 23 November informing me that the Treasury granted the Bank an indemnity in October 2008 against losses it might incur in providing emergency support to RBS and HBOS. I followed this up with you in the House today and I must say that I cannot regard your answer as a full and sufficient explanation. I shall therefore await your further advice before deciding how to properly discharge my responsibilities in this situation.

"While the Banking Act 2009 (which was not in any case in force at the time) allows Ministers to delay or dispense with the need to report to Parliament in relation to Treasury support for banks paid directly from the Consolidated Fund, in my view this does not override long established protocols governing contingent liabilities.

"Under established rules, which are codified in the Treasury’s own guidance for departments, "Managing Public Money", Parliament would expect to be notified at the time an indemnity is granted. In circumstances where the existence of an indemnity needs to be kept confidential, the rules specify that such notification should be made to the Chair of PAC and the Chair of the relevant Select Committee. In practice under these rules, I and former Chairs of my Committee have been notified of indemnities and other liabilities on a confidential basis and none of us have breached the trust placed in us.

"I am greatly disturbed that the decision was taken to by-pass the rules in this case and would appreciate a full explanation from you. The rules also require Ministers to notify Parliament formally when the need for confidentiality lifts and I would like to know whether in your view this was the earliest opportunity for these matters to be brought into the open or whether it had more to do with the timing of the NAO work on the banking support measures which I understand is to be published next week. I look forward to your early response."

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