North Ayrshire and Arran MP Patricia Gibson has written to the Chancellor of the Exchequer, calling on the UK Government to step in as high street banks raise overdraft charges and lending rates for customers, while failing to pass on interest savings to borrowers. This is despite the Bank of England cutting the base rate to an historic low last week of 0.1% in the wake of the coronavirus COVID-19 crisis.
HSBC, First Direct and M&S Bank have all increased unauthorised overdraft charges to 39.9%, with Halifax and Lloyds due to lift rates to the same figure next month. Nationwide and Natwest already charge 39.9% and 39.5% respectively. These moves come despite the Scottish and UK Governments introducing a range of measures to ease the financial burden being felt by businesses and individuals in the face of a national shutdown.
Commenting, Mrs Gibson said:
“The community spirit required to fight this virus has obviously not reached the head offices of our high street banks, so I have written to the Chancellor of the Exchequer and Financial Conduct Authority urging them to act to stop banks from exploiting the current situation.
“At a time of national crisis with millions of people seeing their jobs and livelihoods put at risk and cash flows disrupted, it is shameful that banks have chosen to increase the cost of borrowing.
“The Bank of England base rate cut from 0.5% to 0.1% would save borrowers £600 a year on a £150,000 mortgage. Rather than pass these savings on to customers, banks have chosen to plunge millions of customers into further financial difficulty by hiking overdraft charges, personal loans and credit card charges.
“Many of my constituents and people up and down the country are seeing their livelihoods threatened as they are unable to work due to the current heath crisis. Indeed, debt charities have seen a huge rise in the number of people struggling with debt in the past week alone. Additional charges will only exacerbate the hardship being felt by many.
“This is an unprecedented crisis and the Government must take whatever action is necessary to protect jobs and livelihoods and stop profiteering by high street banks.”
Mrs Gibson’s Letter to the Chancellor of the Exchequer can be viewed here