BANK customers should close their accounts if executives continue to be paid massive bonuses, according to a London MP.

Lynne Featherstone (Lib Dem Hornsey and Wood Green) revealed she had closed an account with Barclays following reports that it intended to continue paying multi-million pound bonuses to senior managers.

She was speaking in a House of Commons debate in which MPs rounded on banks for failing to pass on interest cuts to mortgage-holders.

Richmond Park MP Susan Kramer (Lib Dem) also called for an inquiry into whether fraud and mis-selling had helped cause the financial crisis.

Ms Featherstone called on customers to use "people power" to protest against massive bonuses.

It followed a decision by managers at Barclays to sell a 30 per cent stake in the bank to investors from Qatar and Abu Dhabi for £5.8 billion, and to raise £7.3 billion from investors, allowing it to avoid accepting help from the Government.

The bank has denied suggestions it was motivated by a desire to escape a Government ban on excessive bonuses.

Barclays president Bob Diamond received more than £20 million in cash and shares last year.

Ms Featherstone said: "I opened an account at Barclays a few weeks ago. On the news that it was seeking funding to avoid Government intervention, possibly involving not paying bonuses, I contacted the bank to say that I did not want to go ahead with my account, and it was very worried by that, having asked me the reason why.

"I wonder whether there is anything in people power - perhaps by having to print directors salaries and bonuses on bank statements."

She asked whether "that might give the public some sense of where they want to keep their money?"

Speaking in the same debate, Ms Kramer said banks were passing recent interest cuts on to savers - so that they received less return on their savings - but not on to mortgage holders.

And she suggested Britain should hold follow the US in holding an inquiry into potential fraud in the system.

"In the United States, several states - for example, California - are initiating major efforts to try to identify whether fraud lies at the bottom of many of the problem loans on banks' books.

"There is concern that fraud and extreme mis-selling, which has not been unravelled in the UK and other markets, is holding up reinvigoration."

Treasury Minister Ian Pearson defended the Government's handling of the financial crisis.

He told MPs: "I think that British people have welcomed our decisive action in leading and co-ordinating the efforts of Governments across the world to support the global economy through these very difficult times.

"At home, we have taken unprecedented steps to shore up the UK's domestic financial system, providing £37 billion of public money to some of our high street banks so that they can improve their capital positions.

"Through the Bank of England, we have made available more than £200 billion of Treasury bills to provide liquidity to the banking sector, and we have introduced a £250 billion credit guarantee facility to restore confidence and breathe new life into inter-bank lending."

Related links: Full Commons debate.

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