Councillors, Citizens, MPs John McDonnell & Caroline Lucas & NGO’s Pen Open Letter To Andrew Tyrie & Treasury Committee Calling For An Inquiry Into ‘LOBO’ loans Mis-sold to 250 UK Councils
A group of local councillors, prominent Labour and Green MPs and civil society organisations are working together to investigate why George Osborne’s Treasury and the Financial Conduct Authority (FCA) are continuing to let banks, brokers and government outsourcing firms including RBS, Barclays, ICAP & Capita, profit from the mis-selling of complex & unregulated high interest loans to cash strapped UK councils.
MPs warn UK councils may have been: “ripped off” by banks, brokers and advisors.
An open letter to Andrew Tyrie, calling for an investigation into local government LOBO loans, and the banks, brokers, and advisers involved in selling and arranging them, co-authored by an unlikely coalition of local government councillors, former Town Hall Chief Executives, MPs, SMEs, citizens and NGO’s has been submitted to the Treasury Select Committee (TSC) for consideration.
The letter, signed by John McDonnell MP, Caroline Lucas MP, Ann Pettifor, Prem Sikka, The Tax Justice Network, and prominent economists, accountants, and academics, alongside Debt Resistance UK, was written in support of calls for a TSC and FCA inquiry into LOBO Loans mis-sold to councils by Clive Betts MP and John Mann MP, following recent media exposure by C4 Dispatches, The Evening Standard, The Independent and the Financial Times.
Debt Resistance UK has been working behind the scenes for 2 years on a local authority debt audit to expose £15 billion of “inherently risky” LOBO loan borrowing by Town Halls, where banks are reported to have trousered up-front trading profits of around £1.5 billion.
Debt Resistance UK are currently supporting local residents in the London Boroughs of Newham (the largest LOBO loan borrower with £563 million outstanding) and Tower Hamlets, to appeal “irrational” LOBO loan borrowing to the council auditors, requesting a decision on the legality of the loans by the High Court.
Commenting for Debt Resistance UK, Fanny Malinen said:
“The LOBO scandal is yet another example of debt that has been taken out against the interests of the people. It is inspiring to see residents in London taking action to challenge unjust debts just like citizens across Europe and around the world have done.
In Spain, there are dozens of groups working on auditing their local councils’ debts, and the capital Madrid is now starting an official audit process. The Greek Debt Truth Committee that declared much of the country’s debt illegal, illegitimate and odious, was initiated by the Speaker of Parliament, and Caroline Lucas MP has called for a similar Committee to look into Britain’s debt.
We hope the legal challenges in Newham and Tower Hamlets are the beginning of a conversation on debt that is urgently needed in this country, and we encourage further action on on both the local and national levels.”
At the heart of the matter being investigated by Andrew Tyrie and the Treasury Select Committee areconflicts of interest between so-called Treasury Management Advisor (TMAs – including Butlers & Capita) claiming to be ‘independent’ professional advisors, yet receiving thousands of pounds in undeclared kickback payments from brokers (including ICAP and Tullet Prebon), when councils borrowed from banks.
UPDATE:
Treasury Committee Consider Council Mis-selling Probe
Prominent Conservative Chair of the Treasury Select Committee Andrew Tyrie MP will decide today whether to launch an inquiry into how banks, brokers and advisors were able to mis-sell complex financial products to cash-strapped UK councils, exposed by C4 Dispatches, The London Evening Standard, The Independent and the Financial Times.
Yesterday, an unlikely coalition of local councillors, former Town Hall Chief Executives, prominent Labour and Green MPs and civil society organisations submitted an open letter to Andrew Tyrie, calling for an investigation into local government LOBO loans, and the banks, brokers, and advisers involved in selling and arranging them.
Responding to the open letter, Andrew Tyrie MP said:
The letter, signed by John McDonnell MP, Caroline Lucas MP, Ann Pettifor, Prem Sikka, The Tax Justice Network, and prominent economists, accountants, and academics, alongside Debt Resistance UK, was written in support of calls for a TSC and FCA inquiry into LOBO Loans mis-sold to councils by Clive Betts MP and John Mann MP.
At the heart of the matter being investigated by Andrew Tyrie and the Treasury Select Committee areconflicts of interest between so-called Treasury Management Advisor (TMAs – including Butlers & Capita) claiming to be ‘independent’ professional advisors, yet receiving thousands of pounds in undeclared kickback payments from brokers (including ICAP and Tullet Prebon), when councils borrowed from banks.
At the London Borough of Tower Hamlets, local resident Daniel Lee has lodged a legal objection to “inherently risky” RBS and Barclays LOBO loans in the councils 2014/15 accounts, following claims by MPs yesterday that councils and taxpayers have been “ripped off” by banks, brokers and advisors.
Tower Hamlets external auditor – KPMG are now required to conduct a “public interest test” to determine if the objection should proceed. From January 2017, KPMG will assume audit duties at Barclays from PwC (Newham Councils auditor) who are being forced to give up the contract.
Debt Resistance UK has been working behind the scenes for 2 years on a local authority debt audit to expose £15 billion of “inherently risky” LOBO loan borrowing by Town Halls, where banks are reported to have trousered up-front trading profits of around £1.5 billion.
Debt Resistance UK are currently supporting local residents in the London Boroughs of Newham (the largest LOBO loan borrower with £563 million outstanding) and Tower Hamlets, to appeal “irrational” LOBO loan borrowing to the council auditors, requesting a decision on the legality of the loans by the High Court.
Commenting for Debt Resistance UK, Fanny Malinen said:
“The LOBO scandal is yet another example of debt that has been taken out against the interests of the people. It is inspiring to see residents in London taking action to challenge unjust debts just like citizens across Europe and around the world have done.
In Spain, there are dozens of groups working on auditing their local councils’ debts, and the capital Madrid is now starting an official audit process. The Greek Debt Truth Committee that declared much of the country’s debt illegal, illegitimate and odious, was initiated by the Speaker of Parliament, and Caroline Lucas MP has called for a similar Committee to look into Britain’s debt.
We hope the legal challenges in Newham and Tower Hamlets are the beginning of a conversation on debt that is urgently needed in this country, and we encourage further action on on both the local and national levels.”
