Asked by: Bambos Charalambous (Labour - Southgate and Wood Green)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the effectiveness of the (a) Financial Conduct Authority and (b) Financial Ombudsman Service’s recent changes to compensatory interest.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Financial Ombudsman Service (FOS) is responsible for setting the interest rate it applies to awards. Following consultation, the FOS has confirmed that it will change the interest rate that it applies to some compensation awards, moving from the current 8% to a time-weighted average of the Bank of England’s base rate plus one percentage point. The FOS will continue to apply an 8% interest rate for the period after a determination has been made, if the business does not pay redress on time, to encourage timely compliance with FOS determinations. The Chancellor welcomed the new rate in her Mansion House 2025 speech on 15 July, with the Financial Services Growth and Competitiveness Strategy noting that the new rate better reflects market conditions.
Asked by: Bambos Charalambous (Labour - Southgate and Wood Green)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether she has had discussions with the Financial Conduct Authority on the number of consumers who may miss out on compensation for motor finance as a result of (a) lender record gaps, (b) procedural barriers and (c) complaint-handling delays.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Financial Conduct Authority (FCA), as independent regulator, has set out its proposals for a motor finance redress scheme. In its consultation, the FCA has set out how it expects consumers to be appropriately redressed. The FCA also sets out proposals on what steps firms should take to ensure redress can be delivered quickly, address any gaps in their records, and what controls should be in place to ensure they operate the scheme in a fair and transparent way.
Throughout the consultation period which closed on December 12, the government has encouraged all stakeholders to fully engage with the process so that their views can be considered by the FCA. The FCA has indicated it will finalise the rules of the scheme in February or March 2026.
It is vital that consumers have access to motor finance to enable them to spread the cost of a vehicle in a way that is manageable and affordable. We want to see this issue resolved in an efficient and orderly way that provides certainty for consumers and firms.
Asked by: Bambos Charalambous (Labour - Southgate and Wood Green)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the ability of motor finance lenders to adhere to the forthcoming redress scheme.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Financial Conduct Authority (FCA), as independent regulator, has set out its proposals for a motor finance redress scheme. In its consultation, the FCA has set out how it expects consumers to be appropriately redressed. The FCA also sets out proposals on what steps firms should take to ensure redress can be delivered quickly, address any gaps in their records, and what controls should be in place to ensure they operate the scheme in a fair and transparent way.
Throughout the consultation period which closed on December 12, the government has encouraged all stakeholders to fully engage with the process so that their views can be considered by the FCA. The FCA has indicated it will finalise the rules of the scheme in February or March 2026.
It is vital that consumers have access to motor finance to enable them to spread the cost of a vehicle in a way that is manageable and affordable. We want to see this issue resolved in an efficient and orderly way that provides certainty for consumers and firms.
Asked by: Bambos Charalambous (Labour - Southgate and Wood Green)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps she is taking to ensure that (a) people with mental health difficulties, (b) caring responsibilities, (c) financial hardship and (d) other vulnerable consumers are not disproportionately affected during the motor finance redress process.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
It is vital that consumers have access to motor finance to enable them to spread the cost of a vehicle in a way that is manageable and affordable. We want to see this issue resolved in an efficient and orderly way that provides certainty for consumers and firms.
The Financial Conduct Authority (FCA), as independent regulator, has set out its proposals for a motor finance redress scheme. In its consultation, the FCA has set out how it expects consumers to be appropriately redressed. The FCA also sets out proposals on how firms should support vulnerable consumers, and address any gaps in their records, and what controls should be in place to ensure they operate the scheme in a fair and transparent way.
Throughout the consultation period which closed on December 12, the government has encouraged all stakeholders to fully engage with the process so that their views can be considered by the FCA. The FCA has indicated it will finalise the rules of the scheme in February or March 2026.
Asked by: Bambos Charalambous (Labour - Southgate and Wood Green)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of (a) incomplete and (b) missing lender records dating back to 2007 on the ability of consumers to be (i) identified and (ii) compensated under the car finance redress scheme.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
It is vital that consumers have access to motor finance to enable them to spread the cost of a vehicle in a way that is manageable and affordable. We want to see this issue resolved in an efficient and orderly way that provides certainty for consumers and firms.
The Financial Conduct Authority (FCA), as independent regulator, has set out its proposals for a motor finance redress scheme. In its consultation, the FCA has set out how it expects consumers to be appropriately redressed. The FCA also sets out proposals on how firms should support vulnerable consumers, and address any gaps in their records, and what controls should be in place to ensure they operate the scheme in a fair and transparent way.
Throughout the consultation period which closed on December 12, the government has encouraged all stakeholders to fully engage with the process so that their views can be considered by the FCA. The FCA has indicated it will finalise the rules of the scheme in February or March 2026.
Asked by: Bambos Charalambous (Labour - Southgate and Wood Green)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what sanctions are currently available to the Financial Conduct Authority if lenders fail to meet their obligations under the motor finance redress scheme; and whether the Treasury plans to review the adequacy of those sanctions.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
It is vital that consumers have access to motor finance to enable them to spread the cost of a vehicle in a way that is manageable and affordable. We want to see this issue resolved in an efficient and orderly way that provides certainty for consumers and firms.
The Financial Conduct Authority (FCA), as independent regulator, has set out its proposals for a motor finance redress scheme. In its consultation, the FCA has set out how it expects consumers to be appropriately redressed. The FCA also sets out proposals on how firms should support vulnerable consumers, and address any gaps in their records, and what controls should be in place to ensure they operate the scheme in a fair and transparent way.
Throughout the consultation period which closed on December 12, the government has encouraged all stakeholders to fully engage with the process so that their views can be considered by the FCA. The FCA has indicated it will finalise the rules of the scheme in February or March 2026.
Asked by: Bambos Charalambous (Labour - Southgate and Wood Green)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment she has made of the potential challenges of a motor finance redress scheme which does not fully reflect consumers’ actual financial losses.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
It is vital that consumers have access to motor finance to enable them to spread the cost of a vehicle in a way that is manageable and affordable. We want to see this issue resolved in an efficient and orderly way that provides certainty for consumers and firms.
The Financial Conduct Authority (FCA), as independent regulator, has set out its proposals for a motor finance redress scheme. In its consultation, the FCA has set out how it expects consumers to be appropriately redressed. The FCA also sets out proposals on how firms should support vulnerable consumers, and address any gaps in their records, and what controls should be in place to ensure they operate the scheme in a fair and transparent way.
Throughout the consultation period which closed on December 12, the government has encouraged all stakeholders to fully engage with the process so that their views can be considered by the FCA. The FCA has indicated it will finalise the rules of the scheme in February or March 2026.
Asked by: Bambos Charalambous (Labour - Southgate and Wood Green)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans she has to facilitate discussions between Post Office and the major banks on expanding in-person banking services at post offices.
Answered by Lucy Rigby - Economic Secretary (HM Treasury)
The Government recognises the importance of access to cash and banking services for businesses and individuals, including those who may be in vulnerable groups or require assistance and is supportive of industry initiatives that improve access to these vital services.
The Post Office plays a key role in supporting access to banking services. Under the Banking Framework, a commercial agreement between the Post Office and 30 banking firms, personal and business customers can withdraw and deposit cash, check their balance, pay bills and cash cheques at 11,500 Post Office branches across the UK. The specific services provided under the Framework are subject to commercial negotiations between individual banks and the Post Office, and the Government has no role in deciding what these arrangements are.
The Government would welcome continued collaboration between Post Office and the banking sector, on a commercial basis and will look to host joint discussions with Post Office and the banking sector in the coming months.
Asked by: Bambos Charalambous (Labour - Southgate and Wood Green)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make an assessment of the effectiveness of HMRC in enforcing the agency regulations when collecting PAYE tax from agencies.
Answered by Victoria Atkins - Shadow Secretary of State for Environment, Food and Rural Affairs
Agencies must deduct Income Tax and National Insurance Contributions (NICs) at source from payments of earnings to agency workers. HMRC’s processes for collecting any Income Tax and NICs due from agencies under Pay As You Earn (PAYE) are the same as those for other employers.
Where HMRC finds that a UK agency has failed to account for Income Tax and NICs in circumstances where the agency rules apply to them, it will usually seek to recover unpaid amounts due from them. Whether the agency rules apply in a particular case is dependent on the facts of that case.