HM Treasury  

Call for inquiry into bank's nationalisation

In response, she acknowledged the "hardship and distress" caused to employees and small shareholders of B&B when it was "nationalised so abruptly".

Ms McVey added: "Given this, and how B&B was treated so differently to all the other financial institutions at the time, I am happy to confirm that I would indeed take the steps to set up such an inquiry."

Since the splitting and nationalisation of B&B, the government’s holding company UK Asset Resolution has sold on the mortgages taken on as part of the rescue package in the financial crash.

The selling of these loan books — to private equity firms like Cerebus and financial services firms like Prudential — has come under scrutiny lately as borrowers on the book have become so-called ‘mortgage prisoners’.

These are predominantly borrowers who bought mortgages before the crash but are now blocked from switching due to new affordability rules and are therefore stuck on high standard variable rates.

Mr Blundell points out that the government is set to make a profit on the sale of such loans as "the mortgage book is being wound down by UKAR, whose accounts suggest a substantial surplus when the process is completed".

Earlier this month, UKAR reported it had fully repaid the £48.7bn that was funded by the government in these rescue packages.

The Treasury has been approached for comment.

imogen.tew@ft.com

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