Interest Rate Swap Derivatives

Debate between Guto Bebb and Mark Prisk

Thursday 24th October 2013 Commons Chamber

[Guto Bebb]

Before I take any further interventions, it is worth making this point. I was recently involved in a mediation meeting with one of the banks and one customer, whom I cannot name, even with parliamentary privilege, apparently. The bank in question made it clear that it could not promise a date for paying redress before 2015. As such, although the intention of achieving consistency is correct, we have to put pressure on the FCA to ensure that we move at a faster pace.

One of the big frustrations felt by the businesses affected and the APPG is that since the pilot scheme was completed, the banks involved have spent upwards of £300 million on the administration of the scheme and recruited up to 3,000 people to deal with it, yet by the end of September only 32 businesses had been offered redress, to the total value of £2 million. I understand the complexity of getting this right, but it is simply not good enough for the banks to be spending that much money and for the businesses that need redress not to be getting it.

[Mr Mark Prisk (Hertford and Stortford) (Con)]

I am grateful to my hon. Friend for giving way; he is doing a fantastic job. It is becoming clear to businesses in my constituency that, in the absence of any penalty after the current agreement—which, of course, is voluntary—the banks are just playing for time.

[Guto Bebb]

That is an important point—that the banks are possibly playing for time—which I think will be touched on in other speeches in this debate. As for the ability of businesses to try to get compensation through litigation, it is important that they take action to protect their positions. The redress scheme is a step forward. It is not working perfectly, but I would still advise businesses to protect their position from a legal point of view.