Peter Lilley MP today called on the government to reveal whether Lloyds Bank /Abbey National had been exempted from referral to the MMC as a reward for contributing to the multi-million government slush fund to bail out the sub-post offices.
“At the end of last year the government wrote to banks requiring them to subscribe to a fund of up to ?125 million to meet their social obligations or else.
“Parliament had not given the government any power to make such a demand. Nor was the letter to the banks from Mr Byers made public.
“Bankers have told me that they felt pressured to contribute to this slush fund or they might receive unfavourable treatment from the DTI if they were involved in the round of consolidation about to take place in the banking industry.
I am therefore writing to Mr Byers with 3 questions:
1. Did Lloyds Bank and/or Abbey National contribute to the post office bail out fund?
2. Were the banks given the nod and the wink that contributions to this fund would lead to favourable treatment in the event of merger bids?
3. What were the exceptional reasons for which the Lloyds and Abbey bid was not referred to the MMC even though it meets the normal criteria for a reference?
This is an issue which could dwarf both the Hinduja affair and the Formula One scandal in the amounts of money involved, the unauthorised use of power and the