MPs call for nationalised bank accounting review

The government should reveal the full cost of its attempts to shore up Britain's financial system, the Commons Treasury Committee has demanded.

The MPs have called for much greater transparency in accounting for the government liabilities taken on by the nationalisation and part nationalisation of institutions ranging from Northern Rock through Bradford & Bingley to the new Lloyds Group, Royal Bank of Scotland and the proposal for the Bank of England to buy up assets.

Sub-committee chairman Michael Fallon said: 'In order for effective scrutiny to be performed by parliament and our committee, the magnitude and nature of these liabilities must be comprehensively disclosed.'

'We are therefore demanding that the Treasury quantify and disclose the liabilities involved in the extensive public funding of these banks. Given the amount of public money poured into them over the last six months, taxpayers deserve no less.'

The demands are outlined in the committee's report on the administration and expenditure of the Chancellor's departments.

The report also recommends that the disclosures about government rescue packages should appear in the annual Treasury Group Resource Accounts.

It calls for civil servants to start discussions with the National Audit Office to agree accountancy treatments for the transactions surrounding the nationalised and part-nationalised banks in time for the accounts to be laid before Parliament before the Commons Summer recess in late July.