Financial Services Bill

Debate between Lord Eatwell and Lord Hodgson of Astley Abbotts

Monday 26th November 2012 Lords Chamber

[Lord Eatwell]

My Lords, I support my noble friend’s very sensible amendment. I loved his last line: that “may” may be what is required in this respect. The amendment does two things. First, it is future-proofing—something on which the Treasury is usually very keen. Secondly, in an area where we know—and the Government have acknowledged—that abuses are taking place, it preserves the potential for self-regulation but is a shot across the bows, which should make those who are behaving improperly take much greater care. It preserves a spirit of self-regulation, if self-regulation is seen to work effectively. Given that the Treasury or the Secretary of State may by order amend Schedule 17 in the manner set out by my noble friend, I would like to commend this amendment to the Government.

[Lord Hodgson of Astley Abbotts]

I rise briefly to support these amendments. They seem extremely sensible. I do not want to repeat what the noble Lord, Lord Eatwell, has just said. I like the idea of “may”; I like the idea of self-regulation; and I like the chance for the industry to be able to put its house in order. That is clearly very sensible. The only point I would add is that we now have a situation where a substantial proportion of claims coming forward are fraudulent, semi-fraudulent or unjustified. In each case, the firm about whom the complaint is made must pay £850 to have the case investigated. That is a staggering sum of money and it ends up being paid by the consumers. We really need to find a way to short-circuit that, so that where the claims are fraudulent, something can be done to ensure that the claims management companies, rather than the firm, end up with some of the costs—and, indeed, to ensure that the costs are not passed on to the rest of us. There is a good idea here. I hope that the Government will give the amendments a sympathetic hearing.