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Alistair Darling rejected advice to tell MPs about secret bank loans
Joe Murphy, Political Editor15 Dec 2009
Chancellor Alistair Darling over-ruled civil servants to keep secret £62 billion of loans to RBS and Lloyds, it emerged today.
To the fury of MPs, the Treasury's most senior civil servant disclosed that Mr Darling kept Parliament in the dark because he did not trust senior MPs not to leak.
Permanent Secretary Sir Nicholas Macpherson was being grilled by the Treasury committee about the way the huge emergency funding of the stricken banks with taxpayers' money was kept under wraps for a year.
Members of the Treasury committee and its spending watchdog counterpart, the public accounts committee, have complained that the Government failed to follow normal procedure.
Sir Nicholas said the advice of civil servants had been that a decision to lend the £62 billion should be revealed in confidence to the chairmen of the committees. But Mr Darling rejected the advice. “That was advice the Chancellor, in this case, for a very good reason, decided against,” Sir Nicholas said.
The Opposition immediately called for an explanation. Shadow chief secretary Philip Hammond said it was highly unusual for a civil servant to disclose “disagreement between him and the Chancellor”. Mr Darling is due before the committee tomorrow. He faces a rough ride on the secrecy issue as well as over claims that he is hiding deep cuts in public spending.
Members of the committee were incredulous that he appeared to regard them as untrustworthy. Sir Nicholas said the danger of disclosure, which could have caused panic in the markets, was ultimately deemed too great. “There was a huge requirement to minimise risk in this instance,” he said.
The advice was drawn up in 45 minutes and the Chancellor rejected it less than an hour later. The existence of the loans was revealed last month.
Reader views (3)
The sooner we boot these morons out of goverment the better.
- John Smith, London. UK, 15/12/2009 16:56
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First there was "No Recession" Then "The UK is better placed to weather the Recession". Then "The UK will lead Europe out of Recession" Then "Tory cuts and Labour Investment" At what stage does the UK public wake up to the fact that most if not all of the mess we are in is the result of a Labour Govt Borrowing, Taxing and Wasting? They haven't been prudent, they haven't obtained value for our money and they haven't told the real truth at any stage of the Recession. Just like Blair didn't. Now, voters may not agree with or like Cameron because of his background however what is one hundred times worse is that the most inept Govt ever could be returned for another five years whilst at the same time Brown states that " Failure mustn't be rewarded" Absolutely correct so vote them out as failure should never be rewarded.
- Harry Hugget, London, 15/12/2009 16:24
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Poodle Darling will have over-ruled nothing; it was Gordo that kept this secret.
The sooner there is an inquiry into this incompetent government's inept management of the economy, the better.
Forget the Iraq inquiry, it is more important that Brown and Co are held accountable for the collapse of the UK.
- Nobby Clark, Perth, the Scottish one, 15/12/2009 14:50
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