City minister accused of ignoring £2bn car finance tax loophole

Critics say banks will be able to avoid tax on compensation payouts to victims of 11bn loans scandal

The City minister, Lucy Rigby, has been accused of snubbing taxpayers after she appeared to brush off concerns about a 2bn tax loophole benefiting big banks caught up in the car loans scandal.

Rigby was urged to intervene by a member of the parliamentary Treasury committee after it emerged that lenders including Barclays, Lloyds and Santander could sidestep rules designed to ensure banks pay tax on compensation linked to corporate misconduct.