HBOS: Fraud Investigation

Baroness Kramer Excerpts

Thursday 26th March 2026 Lords Chamber

[Lord Livermore (Lab)]

The Government share the frustration at how long processes relating to this issue are taking to conclude. In 2017, Lloyds Banking Group independently launched the Dobbs review to assess the handling of the fraud, what it knew or should have known, and whether it reported it appropriately to the regulatory authorities. The noble Lord mentioned the FCA. The FCA has undertaken an investigation into this matter historically and has taken enforcement actions. The FCA previously investigated and, with the PRA, jointly reported on the failure of HBOS. There was a criminal investigation resulting in six convictions in 2017. The FCA investigated knowledge of these matters with HBOS and its communications with the FCA after the initial discovery of the misconduct. Lloyds Banking Group has informed the Government that it is providing all the assistance and resources that Dame Linda and the review have requested, and that drafting is under way. It has reiterated the point that it will make the findings of Dame Linda’s review available when completed and will co-operate with Parliament. The Government inherited a series of processes that are independent of government and not accountable to us or the FCA. With our having inherited that legacy, it is right that the Dobbs review, alongside the work of Sir David Foskett, is allowed to conclude.

[Baroness Kramer (LD)]

My Lords, I am going to press the Minister to take a stronger position on this issue, which was £1 billion of criminal financial manipulation by HBOS Lloyds. The FCA spectacularly failed to investigate, initiating a report only under strenuous insistence from Vince Cable. It then misrepresented, to this House and others, the conclusions of that report—as was exposed when the original document was leaked to the Treasury Select Committee. Given all that, will the Government now back Dame Meg Hillier, who has demanded that when this report is completed, it is published in full and unredacted, which is not the position that Lloyds appears to be taking?

[Lord Livermore (Lab)]

As I said before, the Government inherited a series of processes that are independent of government and not accountable to us or the FCA. With our having inherited that legacy, it is right that the Dobbs review, alongside the work of Sir David Foskett, is allowed to conclude. Lloyds Banking Group has informed the Government that it is providing all the assistance and resources that Dame Linda and the review have requested and that drafting is under way. It has reiterated the point that it will make the findings of Dame Linda’s review available when completed and will co-operate fully with Parliament.