Nicky Morgan demands information on HBOS scandal reviews

The Treasury committee has demanded more information about reviews of the HBOS Reading scandal after the publication of a report criticising Lloyds Banking Group’s handling of the matter.

Nicky Morgan, who chairs the committee of MPs, has written to Linda Dobbs, whom Lloyds appointed in April 2017 to review the scandal. Morgan asked the former high court judge when her review would be finished. Morgan said the committee expected to see a full version of report and may call Dobbs to give evidence.

Morgan also wrote to Russel Griggs, who is reviewing claims made by customers affected by the scandal. She has asked for information about the number of claims and offers, how long claims are taking and how Lloyds responded.

She has also asked for details of how the review works, how it works with Lloyds and whether claimants are required to sign non-disclosure agreements.

Morgan applied pressure to Dobbs and Griggs after a campaigner published a report, known as “Project Lord Turnbull” and written by a Lloyds insider, that raised serious allegations about the bank’s handling of the matter, which dates back to 2003.

Two former HBOS employees, Lynden Scourfield and Mark Dobson, were jailed in January 2017 for fraud and other offences related to the scandal at HBOS’s operation in Reading.

Scourfield, who was in charge of looking after troubled business customers, took bribes to load loans on to struggling companies and refer them to a financial consultancy that charged high fees and in some cases took control of the business.

Many of the businesses went bust and some of the owners lost their homes. HBOS was rescued by Lloyds at the peak of the financial crisis in 2008.

Morgan also wrote to Conservative MP Kevin Hollinrake telling him that her committee would investigate the Turnbull report when Dobbs and the Financial Conduct Authority had completed their investigations.

“The fraud at HBOS Reading was a shocking crime that destroyed lives and livelihoods,” Morgan wrote. “It is crucial that the events surrounding it are properly investigated and that the victims are paid fair compensation”