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Dunfermline Building Society collapse could cost taxpayers up to £800 million

As the UK government looks to announce a possible buyer for the "healthy parts" of the Dunfermline Building Society it has been revealed that UK taxpayers will be left to take on an £800 million mix of risky commercial property and mortgage securities. While the UK government has been quick to confirm it is unwilling to take on the business as a whole, preferring to sell off the more viable sections of the business, why are UK taxpayers be left with a potentially hefty bill?

To all intents and purposes, this is a bailout of the building society on a substantial scale with concerns that a period of alleged "reckless lending" has pushed the society to the edge. The government is apparently in talks with two other societies about taking on parts of business with the intention of announcing the sale before opening time today.

There is still some dispute about the way in which the Treasury has acted with concerns that "faceless mandarins" had apparently refused to talk to directors at the building society about a possible independent future. The Dunfermline Building Society is Scotland's largest building society and the collapse of the business does not strengthen SNP calls for an independent future.

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