LABOUR leader Ed Miliband is being pressed to hold an inquiry into the break-up of Bradford & Bingley in 2008 if he wins power on May 7.

Campaigners on behalf of around one million former B&B shareholders have repeated a call for Mr Miliband, who was a minister in the Labour Government when the decision to split up the struggling bank was taken, to consider compensating those whose shares became worthless.

B&B’s mortgage book was nationalised and the savings business and branches sold to Santander at the height of the banking crisis.

David Blundell, chairman of the Bradford & Bingley Action Group, says the decision was flawed and inconsistent with the support for Royal Bank of Scotland and Halifax Bank of Scotland, which he implies was provided for political reasons. He says that hundreds of Freedom of Information requests had failed to inform B&B shareholders why the decision was taken.

He said: “For nearly seven years Whitehall and Westminster have resorted to obfuscation, subterfuge and the ‘public interest’ refuge to avoid telling the truth, which makes a mockery of open and democratic government. The spirit of Sir Humphrey Appleby is alive and well in the corridors of power.”

Mr Miliband is criticised for giving a ‘standard Treasury response’ to BBAG’s first letter calling for an inquiry into B&B’s demise and of using the ‘unacceptable smoke screen’ of referring to a ‘world wide crisis’ cited by successive governments to justify the decision on B&B .

Mr Blundell writes: “The banking crisis ‘post mortem’ published by the Local Authority Pension Fund Forum clearly shows that B&B had a far stronger balance sheet than RBS and HBOS, yet the latter received over £60 billion of covert support only days after B&B was expropriated and its savings book and retail network sold, thus destroying it as an ongoing business.

“The nationalisation of B&B was a flawed decision, made in haste and inconsistent with the treatment of RBS and HBOS, who are major employers in central Scotland, which is the power base of the Scottish Labour Party.

“BBAG’s previous question to you regarding a B&B inquiry and/or reparations on behalf of nearly one million B&B employees, share/bond holders and the Bingley community — ordinary private savers and investors entitled to a duty of care from the Government and tripartite regulatory authorities — remains unanswered.

“Why did the UK Government, of which you were a minister, ensure the survival of RBS and HBOS whilst B&B, which had a far stronger balance sheet than those two banks, was destroyed as a viable business?"