MPs in the House of Commons have voted against an amendment to the Financial Services Bill which sought to bring in a cap on standard variable rates for mortgage prisoners.

The amendment, which was passed in the House of Lords 12 days ago, would have allowed the government to set a maximum SVR for borrowers who were stuck with inactive or unregulated lenders.

But despite many MPs speaking out in favour an SVR cap in Parliament yesterday evening, the majority voted to “disagree with Lords amendment 8”.

A total of 355 Conservative MPs followed the whip and voted to scrap the amendment, while 195 Labour MPs and voted to keep the amendment along with 72 MPs from other parties.

Among those in favour of keeping the amendment to bring in an SVR cap were two Conservative MPs who defied their party’s whip – Sir Peter Bottomley and Royston Smith.

MoneySavingExpert founder Martin Lewis, who was in favour of the SVR cap as a stopgap until a better long-term solution can be found, offered to fund further research.

He tweeted: “Saddened #MortgagePrisoners amendment has fallen, keeping up to 250,000 people mired in financial hell. 

“The fight won’t stop here. Govt has pledged to do ‘something’. 

“We have the LSE report & if govt provides data it promised, I’ll fund further research to try to find solutions.”

Explaining his reasons for defying the whip, Sir Peter Bottomley tweeted: “In my view, the Gov’s proposals would be late and unfairly leave the vulnerable paying 4x the rate I pay.”