Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

Business News

'Blind panic' made ministers take over Bradford & Bingley, investors claim

Investors hit by the nationalisation of one of Britain's biggest mortgage lenders are set to step up their fight for compensation next month.

The Bradford & Bingley Shareholder Action Group (BBAG) will appeal against a ruling made by the Information Commissioner's Office preventing it from accessing official documents linked to the company's collapse at the height of the credit crunch in 2008.

Bradford & Bingley, which was highly exposed to the troubled buy-to-let mortgage market, ran into difficulties when funding from the wholesale money markets dried up.

Since then, the BBAG has been fighting for "fair treatment" on behalf of almost a million shareholders, many of whom received shares as part of the bank's demutualisation in 2000.

The group will appear before the Information Rights Tribunal on 16-17 April.

David Blundell, chairman of the BBAG, said: "One sensed that the ultimate decision to the B&B nationalisation by the then Prime Minister, Gordon Brown, was made in blind panic. For how else can one explain why he made this decision from the anteroom of the White House's Oval Office during a telephone call with then Chancellor, Alistair Darling? Now is that any way to nationalise a bank?"

At the time of the bank's nationalisation, Mr Brown said that the Government would "do whatever it takes to ensure the stability of the UK financial system".

Mr Darling added: "To let Bradford & Bingley go down would have destabilised the entire system. We had to stabilise the situation in order to protect the banking system as a whole, just as we have done on previous occasions."

The Government merged Bradford & Bingley's toxic mortgage debt with the so-called "bad bank" of Northern Rock, which was nationalised in 2007. Other parts were sold to Santander for £612m.