Number 10 turns up pressure on Hornby over HBOS

Banker in spotlight after predecessor forfeits knighthood and part of pension

Pressure is mounting on the former HBOS chief executive Andy Hornby to give up at least part of the lucrative pension entitlement he built up during his time at the company.

Downing Street officials turned up the heat on the 46-year-old after his predecessor, Sir James Crosby, agreed to give up his knighthood and a third of his pension in the wake of a damaging report last week from the Parliamentary Commission on Banking Standards. Sir James also stepped down as a non-executive director at the caterer Compass Group, and also "with great regret" quit as a trustee of Cancer Research UK.

A spokesman for the Prime Minister said Sir James had "done the right thing" and that it was now a "matter for their consciences and judgement" whether others followed his lead.

Lord Oakeshott, the Liberal Democrat peer, was more direct: "Clearly it's not sustainable for Andy Hornby not to follow."

HBOS was worth more than £40bn at its height, but had to be rescued by Lloyds in a Government-brokered deal during the financial crisis and was largely responsible for the subsequent £20bn taxpayer-funded bailout of Lloyds.

Mr Hornby, who is now the chief executive of the betting group Gala Coral, is eligible for an annual pension of £240,000 from HBOS, having taken over from Sir James in 2006 and stayed until the merger. The former chairman, Lord Stevenson, is not entitled to a pension.

The fallout from last week's report also continued to engulf the auditor KPMG, whose reputation was dealt another blow when the accounting regulator confirmed that it was considering investigating the Big Four accountant's audit of HBOS in the lead-up to the bank's collapse.

KPMG suffered its third major setback in less than 24 hours, having already been forced to resign as auditor of Herbalife and Sketchers in the US following an insider trading scandal.

The Financial Reporting Council said it was "monitoring the situation closely". The watchdog said it would take a final decision once a separate report on HBOS by the Financial Conduct Authority was published later this year. In response KPMG said: "We stand by the quality of our audit work at HBOS."

Ed Balls, the shadow Chancellor, was also drawn into the affair. He was challenged to say if he supported the former HBOS chief's knighthood and appointment to a series of powerful positions under the former Labour Prime Minister Gordon Brown.

The Conservative MP Nadhim Zahawi wrote to Mr Balls saying there were "serious questions" raised about whether he recommended the banker for the appointments.

While he was Chancellor, Mr Brown appointed Sir James to the board of the Financial Services Authority in 2003. In 2006 he was knighted and led a government review into ID cards. In April 2008 he was appointed again to lead a review into the mortgage market.

Mr Balls was chief economic adviser when Mr Brown was at the Treasury.

A spokesman for the shadow Chancellor said: "Ed played no role in [Sir James's] appointment to the FSA board, the ID review, the mortgage review or knighthood."

He accused the Tories of "playing political games" and added: "At no point when Ed was at the Treasury did the FSA, Bank of England or Treasury ring any alarm bells about the HBOS business model."

Suggested Topics
PROMOTED VIDEO
Arts and Entertainment
From Mean Girls to Mamet: Lindsay Lohan
theatre
Sport
Nathaniel Clyne (No 2) drives home his side's second goal past Arsenal’s David Ospina at the Emirates
footballArsenal 1 Southampton 2: Arsène Wenger pays the price for picking reserve side in Capital One Cup
News
Mike Tyson has led an appalling and sad life, but are we not a country that gives second chances?
peopleFormer boxer 'watched over' crash victim until ambulance arrived
Arts and Entertainment
Geena Davis, founder and chair of the Geena Davis Institute on Gender in Media
tv
News
i100
Travel
travelGallery And yes, it is indoors
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech
Arts and Entertainment
The Tiger Who Came To Tea
booksJudith Kerr on what inspired her latest animal intruder - 'The Crocodile Under the Bed'
News
i100
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
News
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Syria air strikes: ‘Peace President’ Obama had to take stronger action against Isis after beheadings

Robert Fisk on Syria air strikes

‘Peace President’ Obama had to take stronger action against Isis after beheadings
Will Lindsay Lohan's West End debut be a turnaround moment for her career?

Lindsay Lohan's West End debut

Will this be a turnaround moment for her career?
'The Crocodile Under the Bed': Judith Kerr's follow-up to 'The Tiger Who Came to Tea'

The follow-up to 'The Tiger Who Came to Tea'

Judith Kerr on what inspired her latest animal intruder - 'The Crocodile Under the Bed' - which has taken 46 years to get into print
BBC Television Centre: A nostalgic wander through the sets, studios and ghosts of programmes past

BBC Television Centre

A nostalgic wander through the sets, studios and ghosts of programmes past
Lonesome George: Custody battle in Galapagos over tortoise remains

My George!

Custody battle in Galapagos over tortoise remains
10 best rucksacks for backpackers

Pack up your troubles: 10 best rucksacks for backpackers

Off on an intrepid trip? Experts from student trip specialists Real Gap and Quest Overseas recommend luggage for travellers on the move
Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world