British Steel Pension Scheme: Transfers

Debate between Stephen Kinnock and Nick Smith

Wednesday 10th April 2019 Westminster Hall

[Nick Smith]

My right hon. Friend gets to the nub of the situation. Who does one trust when one has a pot of gold and people want access to it? He poses a really important question. The FCA has got to help our steelworker pensioners and their families.

It can be argued that this was a unique situation, but many of the underlying problems that allowed it to happen are still there. Rogue financial advisers do not face sufficiently tough consequences from the regulators. The FCA’s register has been improved, but consumer information sometimes remains unclear. The support for people who might have been mis-sold pensions is insufficient.

I recognise that some steps have been taken to improve co-ordination between regulators. That is welcome, but much more needs to be done. At the moment, the pension sharks have generally received administrative sanctions only, but I think they need to face serious penalties. Will the Minister scrutinise the effectiveness of the FCA’s enforcement regime? Steelworkers say the FCA needs to impose heavy financial penalties on bad financial advisers. I think it needs to employ its powers much more often, as it seems this has not been done sufficiently.

[Stephen Kinnock (Aberavon) (Lab)]

I congratulate my hon. Friend on securing this debate and pay tribute to him for his work for our constituents in this important area. At our recent meeting with the FCA, the issue of mandatory insurance wording came up. Those unscrupulous financial advisers are not taking out proper insurance—when they go bust, there is no source of compensation for the steelworkers who have been ripped off. Does my hon. Friend agree that the Minister needs to take urgent action to improve the regulatory framework, not least in the area of mandatory insurance wording?

[Nick Smith]

My hon. Friend makes an important point. Given reports that the FCA is investigating so-called introducers in connection with a major scam, the Government should now ensure that they, too, are regulated. The Treasury has to take action to ensure that financial advisers always have—this comes to my hon. Friend’s point—sufficient insurance to pay out, should they go into administration.

Will the Minister ensure that the FCA updates the Treasury on how it is supporting the potentially several thousand steelworkers who might have received poor transfer advice in this instance? The Treasury needs to co-ordinate with the Department for Work and Pensions and other key bodies in order to help victims of mis-selling to access the support they need. Although BSPS members have been supported by a strong team in Port Talbot, including a financial adviser and a lawyer, there needs to be a single initiative, aimed specifically at people who may have been mis-sold in cases such as BSPS.