Terms of banks' contributions to the Big Society Bank are still not settled, says Oliver Letwin

Cabinet Office minister tells MPs that talks are continuing over their £200m investment

Oliver Letwin
Oliver Letwin

The government is still in talks with the UK’s biggest banks over the terms on which they will contribute to the Big Society Bank, the Cabinet Office minister Oliver Letwin has told parliament.

At Cabinet Office questions in the House of Commons yesterday, Letwin said negotiations were continuing with the four main lending banks about their contributions.

"My right honourable friend is currently discussing the exact terms on which the investments will be made," he said.

Letwin said the talks were about the £200m contribution the banks had agreed to make to the Big Society Bank, which the Prime Minister, David Cameron, announced in February. 

Letwin said the Big Society Bank would make its first loans in the next few months. "The timing will be decided by the Reclaim Fund when it can assess the amount likely to be reclaimed by depositors," he said. The Reclaim Fund is the independent body set up to handle the money in dormant accounts.

Letwin said he estimated that the bank would receive £400m from dormant accounts and would lend between £60m and £100m in its first year.

"It will seek to achieve the highest possible social returns alongside reasonable financial returns," he said.

Francis Maude, Minister for the Cabinet Office, said the public services reform white paper, due to have been published at the beginning of this year, would appear "later this summer".

"It will be worth waiting for," he said in response to a question about the dealy from the shadow Cabinet Office minister, Tessa Jowell .

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