Financial Secretary Sajid Javid said he would write to the Treasury unit which manages the Government’s stakes in Britain’s banks and ask it to consider the case made by Shipley MP Philip Davies and other backbench Tories still furious about the way Bradford & Bingley was nationalised five years ago.
Mr Davies hosted a Westminster Hall debate yesterday in which he set out the case for an inquiry into former Prime Minister Gordon Brown’s decision to nationalise the West Yorkshire institution at the height of the financial crisis, effectively ending it as a going concern.
He said it was time for the Government to consider reviving the lender as a challenger to Britain’s other high street banks.
Addressing Mr Javid, the Shipley MP asked: “Will you go away and think about whether or not a new Bradford & Bingley could be borne out of what is there at the moment, to be a new challenger on the high street to the banking sector, to introduce the competition that we all want to see?”
Responding on behalf of the Government, Mr Javid said he would write to the head of UK Financial Investments (UKFI), the Treasury unit that manages the Government’s stakes in banks, “and ask them to consider your comments and the case that you have made today during this debate”.
He added: “I will commit to you that I will think about that further – and I’ll do more.”
MPs heard that one million Bradford & Bingley share and bondholders, as well as many employees, were still in the dark about why the bank was broken up in 2008.
Mr Davies said the Yorkshire community had “lost a highly valued brand from the high street, one that was in existence since 1851”.
“The Government rightly claims to want to be on the side of hard-working people,” Mr Davies said. “It is hard-working people who are the shareholders, bondholders and employees of Bradford & Bingley who all lost out.”
The Shipley MP said it was unclear why the Government had decided to treat Bradford & Bingley differently to other troubled banks such as Northern Rock and RBS, which were allowed to continue.
“Why was Bradford & Bingley uniquely closed down – especially given that its financial situation was certainly no worse?” he asked. “Indeed, all the evidence suggests it was better than the others.”
Elmet and Rothwell MP Alec Shelbrooke highlighted the work of local resident David Blundell, who chairs an action group for shareholders still battling for compensation.
“He is fighting for the small person who invested their life savings in those shares – and is now faced with nothing because of the decisions made at national level by the then Government,” Mr Shelbrooke said. “They have had no answers.”
Cleethorpes MP Martin Vickers described the situation as a “scandal”.
But Mr Javid said the decision in 2010 not to compensate shareholders was taken independently, and followed a lengthy inquiry.
“After conducting a robust and rigorous process, the independent valuer determined that no compensation was payable,” the Treasury Minister said.
“I believe that due process has been followed at every stage. Transparent and independent arrangements for compensation have been put in place, and there has been a proper process through the courts.”