Osborne defiant in row over Co-op Bank details
CHANCELLOR George Osborne has refused to reveal the details of meetings and calls between his officials in the Treasury and the Co-operative Bank to discuss the lender’s ultimately failed attempt to buy 631 branches from Lloyds Banking Group.
The Treasury Select Committee, which has been investigating the circumstances surrounding the failed Project Verde transaction, and the later near collapse of the Manchester-based lender, has asked Mr Osborne for details of contact between the parties.
One of the lines of its inquiry was to explore allegations made by rival bidder NBNK that the Government had pushed for the Co-op’s bid to succeed.
Andrew Tyrie MP, chairman of he committee, has written to Mr Osborne several times to ask for a breakdown of meetings between his department and Co-op and Lloyds executives.
Mr Tyrie first asked for the information in March. In reply Mr Osborne stated only that the Treasury had “kept closely in touch with the Verde process from the beginning”.
Over the next five months, Mr Tyrie sent two further requests for details of the meetings, but on each occasion his request was not met.
Mr Tyrie wrote in April: “Your letter of 3 April provided some general information on these contacts, but lacked the detail requested on the timing of contacts, the individuals involved and the content of discussions.
“Please provide this to the committee as soon as you have collated it.” In a reply Mr Osborne said that the Treasury was “currently reviewing its files”, but added that he did not want to provide a detailed response so as not to “prejudice any enforcement actions”.
This prompted Mr Tyrie to send a third letter last month, asking him to be more forthcoming.
“One of the principal questions that the committee has been addressing in its inquiry is the allegation that there was undue political pressure on one or more of the parties involved in the Verde deal… 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.”
Lloyds originally agreed a deal to sell the Project Verde branches to the Co-op Bank in 2012, but as financial clouds garthered and problems in its balance sheet began to unfold, it pulled out of the deal in April last year.
The Co-op Bank was forced into an emergency fund-raising, while Lloyds opted to spin off the branches through a stock market flotation using the TSB brand.
There are a number of ongoing regulatory investigations regarding the Co-op Bank’s woes over the past 18 months.
