Treasury Select Committee chair hits back at chancellor over rules which could have blocked HBOS review

Hayley Kirton
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David Cameron Visits The HBOS Headquarters
HBOS collapsed in 2008 (Source: Getty)

The chair of the influential Treasury Select Committee has written to the chancellor, slamming powers which could have been used to block reviews into recent high-profile scandals like HBOS.

In a letter dated last Tuesday, but not published until today, Andrew Tyrie warned Philip Hammond that powers granted to the Treasury to push the stop button on financial reviews by regulators, even when they had been advised by the Committee or were of public importance, were excessive.

"Given the Treasury's central role in crisis management and financial regulation, this power represents a clear conflict of interest," said Tyrie of his letter. "It could be used by the government to protect itself, its actions and other public bodies from legitimate scrutiny.

"Far from opening up this area to much needed sunlight of public scrutiny the [Financial Services Act 2012], in some circumstances, curbs it. That won't do."

Read more: FCA confirms it will investigate former HBOS bosses

Tyrie also pointed out the powers could have been used to shut down reviews into the 2008 collapse of HBOS. A report by the Financial Conduct Authority and Prudential Regulation Authority into the issue was published in late 2015.

In July last year, Tyrie published a letter slamming the way the watchdogs involved had handled the HBOS scandal, in particular highlighting the length of time between the collapse of the lender and the date the report was finally published.

A Treasury spokesman said: "The government has an ongoing commitment to maintaining financial stability. We'll consider the issues raised in the letter and reply in due course."

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