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Labour tells Ministry of Defence to pay back Libor cash meant for charity

Former chancellor George Osborne set up the fund in 2012 to support veterans and emergency services charities.

The Ministry of Defence has come under fire over claims it spent money intended for military charities.

Shadow defence secretary Nia Griffith accused the department of a “scandalous” misjudgment, after she claimed monies allocated from the Libor fund were spent on core services.

Former chancellor George Osborne set up the fund in 2012 to support veterans and emergency services charities.

It was set up using money from fines imposed on bankers involved in the Libor scandal – where bankers fixed the inter-bank interest rates.

Nia Griffith called for clarity over the fund (Gareth Fuller/PA)

Ms Griffith, speaking in the Commons, said: “How is it that over half a million pounds of Libor funds has been spent by the Ministry of Defence in support of armed forces welfare?”

She added: “Isn’t it time now for the Secretary of State to admit that this was a serious misjudgement using the Libor funds in this scandalous way and can he tell us when his department will be paying this money back?”

Allegations around the spending of the Libor fund at the MoD first emerged in The Sun in February.

Defence Minister Tobias Ellwood then said that he would “look at the details”, saying there was a “grey area” in how the fund was allocated.

Responding to Ms Griffith’s question, Defence Secretary Gavin Williamson said it was not his department who administered the fund, but the the Treasury.

He said: “So much of that Libor funding has made such a difference, not just to those who’ve ceased to serve in our armed forces, but a real difference to those who continue to serve in our armed forces and we’re very grateful for the impact that that has had and the positive impact it has had on so many of our service personnel.”

Ms Griffith later returned to the Commons to accuse Mr Williamson of misleading the House with his response to her question.

The shadow defence secretary, raising a point of order, told MPs that Mr Williamson had previously said it was the MoD that administered funds, not the Treasury.

She said: “This really matters because there is concern that Libor funds may have been misspent by the MoD and the Secretary of State cannot simply pass the buck.”

Speaker John Bercow responded: “If the Secretary of State believes that he has erred, and of course to err is human so there’s no shame in it, it is up to him to correct the record.”

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