Interest Rate Swap Derivatives

Debate between Natascha Engel and Clive Efford

Thursday 24th October 2013 Commons Chamber

[Natascha Engel]

Indeed, and I am going to finish on both those points.

One way to make sure the banks cannot drag their feet in the way that they have is to impose a moratorium on the payments. That would really focus their minds. If the money is not coming in, I am sure they would try to settle this matter once and for all much more quickly. The number of suspensions of payments—and only in those cases where people are suffering significant hardship—is an absolute scandal. The fact that 30,000 businesses or individuals are waiting for some kind of redress and only 32 have had redress is also an absolute scandal. Something must be done.

[Clive Efford (Eltham) (Lab)]

My constituency also has a business that has been affected by this. When we wrote to the Financial Conduct Authority, the response was really an apology for the banks, as though this is just some sort of error that has been made. Does that not underline the fact that there has been a lack of urgency by the regulators, on whom we rely to act on behalf of our constituents when they are wronged in this way? We need more urgency from the regulators; they must get on with their job.

[Natascha Engel]

That is right and this whole scandal has shown how it has been possible to pass the blame between banks, the FCA and the Treasury, and nobody will take any responsibility for what has been an absolute scandal.

I have seen this in my casework. Mr and Mrs Chadwick buy and sell homes and their business has been very successful. These small and medium-sized companies are not just viable; they are successful. It is only because of this mis-selling scandal that they are going bust. I cannot understand the logic of this: what interest does a bank have in a business going bust and losing all its money? The logic of that is beyond me.

I am also concerned about banks that have taxpayer funding, such as RBS, which has a lot of these cases. We must look much more carefully at the link between the regulator, the banks and the Treasury.

I agree that proper criminal penalties must be imposed on those banks, individuals and organisations that have been proven to have been part of this injustice, and I also agree with the call for a moratorium.