MP renews calls for HBOS - Lloyds split amid revelations of secret Government loans

12.00.00am GMT Wed 25th Nov 2009

The Bank of England today admitted it had secretly lent massive sums to RBS and HBOS while HBOS was still in talks with Lloyds over their merger.

Details of the combined £62 billion loan were submitted by the Deputy Governor of the Bank of England to the influential Commons Treasury Select Committee. John Thurso MP, a member of the Committee as well as Lib Dem Business spokesman, said that the news of the loan was concerning and threw further doubt over the Government's wisdom to allow the merger of Lloyds with HBOS, a move he opposed at the time. Lloyds merger talks started with HBOS on the 17th of September last year and the Government loan was given two weeks later.

John said: "If Lloyds knew about the funding they should have walked away from the deal, and if they did not they and their shareholders have been taken for a ride by the Chancellor. Either way, the deal should not have happened and the only sensible course of action is to split Lloyds and HBOS now."