SHEFFIELD City Region mayor Dan Jarvis has claimed several firms in his constituency have been placed in jeopardy through no fault of their own after taking out fixed rate loans with major banks.
Mr Jarvis, who is the Labour MP for Barnsley Central, has written to the Treasury and the Financial Ombudsman Service to call for action to ensure small business owners who believe they have been mistreated by the big banks have speedy access to justice.
Mr Jarvis said: “I understand that the Financial Ombudsman Service has looked into this matter at the request of some of the businesses affected, but that there are significant concerns about the depth and consistency of the investigations.
“After meeting with one of the local business owners affected, I will be raising my concerns with the Financial Ombudsman Service, the Treasury Minister and the Shadow Chief Secretary to the Treasury. “
Peter Dowd, the Shadow Chief Secretary to the Treasury, said he shared Mr Jarvis’s concerns “which are consistent with the views of many MPs of all political parties”.
Mr Dowd added: “Labour has called for a public inquiry into historic abuses in the financial services sector in relation to this issue.
“We also recognise that the Financial Services Ombudsman process is not sufficient to provide full examination of the concerns of businesses. Given this, we are calling for an independent tribunal service that will look at any disputes between businesses and lenders.”
A spokesman for the Financial Ombudsman service said: “We understand how important these cases can be to small businesses, and we are in contact with Mr Jarvis’s office.”
Earlier this year, a Conservative Yorkshire MP called for the creation of a watchdog “who is prepared to bite” on behalf of firms who believe they have been bullied by the banks.
Kevin Hollinrake, the co-chairman of the All Party Parliamentary Group on Fair Business Banking, said that misconduct involving the big banks has harmed tens of thousands of small businesses. Mr Hollinrake, who is the Conservative MP for Thirsk and Malton, is calling for the creation of an independent tribunal to oversee complaints about the banks from SMEs.
Mr Hollinrake added: “I have met many business people who have been treated appallingly by their banks and are determined to open up anaffordable route to justice.”
A Treasury spokesman said that it was working wih the regulator and the industry to help resolve these types of disputes.
The spokesman added “We have always been clear that the mis-selling of financial products is wrong, and it is important that businesses that have been affected are compensated – as has happened in a number of cases.
“We are working with the regulator and the banking industry to ensure that small businesses have access to the appropriate forum for settling banking disputes.”