Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she is taking steps to ensure that people affected by interest rate hedging products are compensated.

The Government recognises the impact that the historic mis‑selling of interest rate hedging products (IRHPs) has had on many SMEs, and we acknowledge the distress this caused.

Responsibility for regulating the sale of these products, and for ensuring appropriate redress, rests with the independent Financial Conduct Authority (FCA). The FCA required the major banks to carry out a comprehensive review of past IRHP sales. This led to around 14,000 businesses receiving a total of £2.2 billion in redress.

The Government believes this industry‑wide redress scheme broadly met its objectives in delivering compensation to businesses that were mis‑sold these products. The Government has always been clear that mis‑selling of financial products is completely unacceptable. That is why we supported both the FCA’s redress scheme and its decision to commission an independent ‘lessons‑learned’ review of its supervisory interventions in relation to IRHPs. The FCA accepted the majority of the recommendations from that review, and, in light of the review’s findings, it also carefully considered whether further steps should be taken to facilitate access to redress for customers who had initially been excluded.

More generally, the Government continues to keep the financial services regulatory framework under review, working closely with the FCA to help ensure that consumers and businesses are protected and have clear, effective routes to compensation where misconduct occurs.