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Scottish MPs rap Lloyds Banking Group for halting charitable funding

Scottish MPs rap Lloyds Banking Group for halting charitable funding
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Scottish MPs rap Lloyds Banking Group for halting charitable funding

Fundraising | Vibeka Mair | 21 Oct 2009

A coalition of Scottish MPs has called on Lloyds Banking Group to reconsider its decision to halt funding for the Lloyds TSB Foundation for Scotland.

Last week, the Foundation announced that it had closed its doors to new grant applications “for the foreseeable future” after failing to reach an agreement on future funding with its main benefactor the Lloyds Banking Group.

The move has angered Scottish MPs who have raised concerns about the loss of around £6bn annually as a result of the dispute.

Alistair Carmichael, MP for Orkney & Shetland, has tabled an Early Day Motion this week which complains that Scottish charities are set to lose £22m over the next nine years as a result of the bank’s new proposals, yet Lloyds Bank received over £40bn in government aid in the past year. 

Seventeen MPs, most representing constituencies in Scotland, have signed it.

The Foundation has also received a high volume of political support from MSPs and the Scottish government.

"Quite a few have got in touch with us over the last week," said a spokeswoman. "We will also be having discussions with Iain Gray, leader of the Scottish Labour Party, Tavish Scott, leader of the Scottish Liberal Democrats, and Murdo Fraser, deputy leader of the Scottish Conservatives."

As part of the covenant between the two organisations, the Foundation received 1 per cent of the Lloyds Banking Group’s pre-tax profits per annum, but as the Group is predicting losses this year the Foundation would not receive anything under this arrangement.

Negotiations broke down after the Foundation said it was offered funding for the next four years as assistance until the Group returns to profit, but only in return for a future reduction of the covenant to a 0.5 per cent share of profits and a revocation of the Foundation’s independent status.


 

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