I think it is an absolute disgrace. I do not think that the FCA saw it coming, which is one of the flaws of the regulator. The FCA has been criticised many times in this place, including by the right hon. Gentleman. It told the banks, “Right, you’re not going
to charge anybody any more than anyone else is.” But that let them all put their rates up to the highest level. It is exploitative and absolutely outrageous.
The banks need to look at this as a sector and start to treat their customers fairly, which of course is a basic requirement of the principles of banking, so the FCA should step in and look at this. In fact, I think it should be the subject of an inquiry by the Competition and Markets Authority. The fact that the rates are not just high, but all the same, smacks of directors getting together in a room and agreeing a figure. It cannot be a coincidence that all the rates are exactly the same in this supposedly competitive market.
On commercial loans, it is right that the Government have negotiated with the banks to give mortgage holidays, which of course have to be paid back but nevertheless give borrowers vital breathing space. I think the same is true of some commercial loans, but the banks are saying, “We’ll give you a holiday only on the payment of the principal, not the interest.” Those paying for a commercial loan are paying much more on the interest than they are on the principal, which again seems grossly unfair if we are all in this together.
We are going to work together to try to get through this, so I call on the banks to look at this again, to be fair and to rebuild their reputation. The final way they could do that is by suspending legal action, certainly in relation to residential repossessions but also for repossessions against businesses. They should show forbearance and use the business banking resolution service—I am one of the people who have been working on that in recent months—which will be like a super ombudsman for banking disputes. They should defer any issues they have with their customers until that service is properly established, so that those complaints can be resolved fairly—fair to the bank and fair to the customer.
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