Show us the 'secret dossier' on HBOS takeover, demands Cable

Published on Saturday 28 February 2009 18:47

THE Liberal Democrat deputy leader Vince Cable is demanding the release of a "secret dossier" which the Government used to help push through the controversial Lloyds TSB takeover of HBOS.

The confidential Treasury document was submitted in evidence during the legal challenge against Business Secretary Lord Mandelson's decision to waive competition law to allow the takeover to go ahead.

It is thought to set out why Gordon Brown and Chancellor Alistair Darling claimed the takeover was the only option to sustain financial stability during the height of the banking crisis.

Since then, it has emerged that the Financial Services Authority believed there was a viable alternative which would have seen HBOS retain its independence as a Scottish institution.

Cable, the Lib Dem financial spokesman, has tabled a parliamentary question with the Treasury demanding to know whether the original document still exists and, if so, whether the Chancellor will make it public.

"There appears to be a lot of murky dealings surrounding the Lloyds TSB takeover of HBOS, involving the Government and the Lloyds board," said Cable. "It is important, both for taxpayers and shareholders, that we have more transparency about what actually went on. Now that the takeover has gone through and we know the extent of HBOS's losses there would seem to be no longer any need for secrecy."

Cable is also demanding to know what advice Lord Mandelson got from the FSA on the merger and what alternatives were considered.

The dossier was a key feature of the Competition Appeal Tribunal hearing in December, in which business figures unsuccessfully challenged the legality of Mandelson's decision to set aside competition rules, against the advice of the Office of Fair Trading.

The Department of Business confirmed that the dossier still existed – but Government sources indicated it would not be made public if there were issues of commercial confidentiality.