Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill

Debate between Sammy Wilson and Pat McFadden

Report stage & 3rd reading
Wednesday 22nd September 2021 Commons Chamber

[Mr McFadden]

The hon. Member raises a very fair point. It has already been referenced in the debate that this is not just about amounts, but about the timescale, and we all want the Government and whoever is administering this scheme to be able to get on with it.

[Sammy Wilson]

I understand the point, but does the right hon. Gentleman accept that defining those who have suffered the most could be quite difficult? Are those who have suffered the most those who have lost the most, or perhaps those who are not all that well-off and have found that they had lost all of their savings, even though all of their savings would not have been the same as the loss of some of the bigger investors? Does he accept that that is a difficult definition?

[Mr McFadden]

The right hon. Member raises a very fair point. If we pluck a sum of money out of the air, it could be a lot of money to one person and perhaps less to somebody else, depending on their wealth.

Let me return to the questions for the Minister arising from the amendment and the Bill. The second is the important question of where the decision to compensate the LCF investors leaves investors in other firms where regulatory failure is alleged. Where has the bar now been set for future compensation in the event of regulatory failure? The taxpayer cannot stand behind every investment loss. Some investors will make money and some will lose. That is in the nature of a market economy. However, the question of compensation arises when there is a clear regulatory failure, because that is considered to be a different matter. Having come up with this scheme, where do the Government now draw the line?

How can we be sure this will not happen again? There are two aspects to this question. The first is the role of the regulator. The FCA is going through a transformation programme designed to ensure that changes are made to prevent a similar thing from happening in the future.