The Government has refused to intervene on behalf of mortgage brokers to stop banks from dual pricing, saying pricing remains a commercial decision for banks and building societies.
More than 2,000 mortgage brokers petitioned the Government in May calling for it to prevent the banks from offering cheaper prices on direct-to-consumer mortages.
The petition states: “We the undersigned petition the Prime Minister to create fair pricing policies to prevent banks pricing interemdiaries out of the market.”
The Government has responded, saying pricing decisions and mortgage terms and conditions “remain commercial decisions for banks and building societies”.
It also says state-backed financial institutions are run in a way that provides value for the taxpayer and states it is unwilling to intervene in commercial decisions.
The Government says: “UK Financial Investments Limited, on the Government’s behalf, manages the stakes in financial institutions that have benefited from public sector investment. UKFI is required to operate at arm’s length from HM Treasury, and manages the public’s stakes in banks on a commercial basis, with the objective of protecting and creating value for the taxpayer as shareholder.
“This means that even where public money has been made available to banks, the Government does not seek to intervene in commercial matters such as pricing or product design. To do so would be contrary to this principle of independence, and may be anti-competitive or distort the market.”
The Government says it remains committed to promoting understanding of the financial system and raising levels of financial capability across the UK.
It says: “The Coalition Government views the roll out of a free and impartial national financial advice service by the newly established and independent Consumer Financial Education Body as vital in achieving these aims.
“We believe that private intermediaries also have an important role to play and that a free national financial advice service will be beneficial to both consumers and the financial services industry as a whole.”