RegulationAug 21 2014

Tyrie accuses Osborne of withholding information

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Treasury Select Committee chairman Andrew Tyrie has accused chancellor George Osborne of unreasonably withholding information relating to the Co-operative Bank’s attempted takeover of 632 Lloyds Banking Group branches in 2011.

A series of letters between the two was published today (21 August) revealed Mr Tyrie’s repeated requests for information regarding the so-called Project Verde deal, which collapsed in April 2013 after Co-op Bank revealed a £1.5bn capital deficit.

The bank had overcome NBNK Investments in the bidding process. The Select Committee has been seeking to establish whether the Treasury applied undue pressure on Lloyds to select Co-op Bank as its preferred bidder.

After Mr Tyrie’s second request, Mr Osborne said the Treasury would provide details of relevant conversations and meetings to the independent investigation into Co-op Bank, but added that “the best approach” was to provide this to the investigation before releasing it to the Select Committee.

He added that the investigation will begin when it is clear there will be no prejudice to any enforcement actions, referring to long-running probes by the Financial Conduct Authority.

However, Mr Tyrie stated that “enforcement action might take many months or years to conclude” wrote Mr Tyrie, adding that it is therefore not reasonable to expect the Committee to wait indefinitely for the information.

He added: “The Committee requests that you reconsider your position and release to the Committee fuller information about the frequency and content of these contacts than you have supplied so far.”

Mr Tyrie in particular asked for more information on what involvement Treasury ministers Mark Hoban and Greg Clark had in the bidding process and on 23 July he expressed concerns about Mr Osborne’s responses.

Mr Osborne’s final letter at the start of this month, responded: “The Treasury – both at ministerial and official level – was in regular contact with the regulator and Lloyds during this period on a wide range of issues including the Verde bid.

“I can confirm that in addition, we were in regular contact with representatives of the Co-operative Bank once their status had been confirmed by Lloyds as the preferred bidder. We also had periodic contact with representatives of NBNK, including Lord Levene.”

Mr Osborne added that while ministers and officials met with relevant parties “from time to time” to monitor progress on the deal, decisions about whether and how to proceed were commercial matters for the parties to the transaction.