TAKE ACTION TODAY: call on MPs to support an inquiry into the #LOBOscam

On Tuesday 14th July, the Department for Communities and Local Government (CLG) Select Committee will meet for the first time to decide whether a Government inquiry into rip-off LOBO loans taken out by Councils and the advisory firms which recommended these deals should proceed, as requested by Clive Betts MP.

The inquiry follows on from the Channel 4 Dispatches documentary that presented 12 months of Debt Resistance UK FOIA research into unregulated bank loans to UK local government in: “How Councils Blow Your Millions”.

Today, The CLG Select Committee MPs will be sworn in. To make sure the inquiry goes ahead we are asking citizens to take action and put pressure on MPs. Please tweet or email CLG committee MP’s and ask them to act in the public interest and that the inquiry goes ahead. Below you can find a list of the CLG committee MP’s, a suggested email and suggested tweets to send to them.

For more information on how Councils are being ripped off by banks, brokers and advisors through these dodgy deals please view the Channel 4 documentary and explore our site.

At the centre of this scandal is the role of Treasury Management Advisors – firms including ICAP and CAPITA who advise local authorities, housing associations, universities, and NHS Trusts how to structure their borrowing and investment decisions.

What DRUK research has confirmed is that these firms, whilst selling their services to councils as “independent” advisers, were actually taking millions of pounds in undisclosed kickbacks from banks and brokers when councils borrowed from banks, instead of from Government.

Regulator The FSA was requested to investigate conflicts of interest with Treasury Advisers back in 2009 by the DCLG Iceland Select Committee, but refused to do do.

Debt Resistance UK will be holding an open meeting this Thursday 16th July at Goldsmiths University to discuss together the next steps. Please subscribe here if you would like to join. Please also share this through your own networks.

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List of CLG Select Committee MPs

Clive Betts MP – Chair E	clive.betts.mp@parliament.uk	@clivebettsmp
Julian Knight MP E	julian.knight.mp@parliament.uk	@julianknight15
Mary Robinson MP E	mary.robinson.mp@parliament.uk	@MaryRobinson01
Bob Blackman MP E	bob.blackman.mp@parliament.uk	@bobblackmanmp
Mark Prisk MP E	hunterj@parliament.uk	@PriskMark
Helen Hayes MP E	helen.hayes.mp@parliament.uk	@HelenHayes_
Angela Rayner MP E	angela.rayner.mp@parliament.uk	@angelarayner
Alison Thewliss MP E	alison.thewliss.mp@parliament.uk	@alisonthewliss
Joe Cox MP E	jo.cox.mp@parliament.uk	@Jo_Cox1
Kevin Hollinrake MP E	kevin.hollinrake.mp@parliament.uk	@kevinhollinrake
David Mackintosh MP E	david.mackintosh.mp@parliament.uk	@davidmackintosh

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Suggested Email

Title: Please support a full CLG inquiry into LOBO Loans to local authorities.

Dear Commons CLG MP’s

Please support a full inquiry by CLG and financial regulator The FCA into the financial firms involved in the advice, brokerage and sale to local authorities of £15billion of Lender Option, Borrower Option (LOBO) loans, sold by banks including Barclays and RBS.

Research and analysis by campaign group Debt Resistance UK featured by C4 Dispatches in “How Councils Blow Your Millions” shows hundreds of local authorities paying millions of pounds of unnecessary interest payments to banks on LOBO loans, locked into the contracts for the next 60-70 years.

High interest payments to banks on LOBO loans are draining council budgets at a time of harsh austerity cuts, with a 40% reduction in local government grant funding since 2010.

LOBO loans contain interest rate derivatives, and the use of swaps (a form of derivative) banned for use by local government following the 1989 LB Hammersmith vs Goldman Sachs case meaning the legality of these loan instruments remains untested by UK courts.

Given the non-regulation of public finance by UK authorities, the legal complexities of this case and the significant sums of taxpayer money involved, I urge the Commons CLG to undertake a full and proper inquiry into this matter.

Yours sincerely

XXXXXX

Further Reading: Dispatches: how local governments are being fleeced by the banks on £15bn loans

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