Northern Rock
Debate between Guy Opperman and Mark Hoban(13 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Guy Opperman (Hexham) (Con)
I too was in Newcastle last week, when the foundation, local people, the Labour party and the cheering staff members in Northern Rock’s building in Gosforth were confirming—as were the unions—that this was a great deal. Is the Minister surprised that no mutual came forward, and will he explain once more why none would be willing to do so in the circumstances?
Mr Hoban
We went out of our way to encourage that. We spoke to various organisations that are keen to promote the idea of mutuality, but none of them could produce a workable model that would enable us to give money back to the taxpayer, and, as I have said, no mutual came forward with a bid in the final round. That was not for want of trying on our part. Clearly there was not the interest in the mutual sector in acquiring Northern Rock that people assumed to exist.
Arch Cru Compensation Scheme
Debate between Guy Opperman and Mark Hoban(13 years, 2 months ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
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Mr Hoban
No, I will continue. I have three minutes left and more points to make.
The FOS is bound only in respect of complaints made against Capita, HSBC and BNY Mellon. Complaints made to the FOS about other parties to the investment chain, including independent financial advisers, can still be heard by the FOS. The limitation on the FOS applies only to complaints made about the three parties. That is a clear signal to investors that they can make further complaints about other parties. Investors are free to pursue action through the courts and to challenge the IFA who advised them to invest in Arch Cru funds over whether that advice was appropriate. Numerous people have already done so. If they are not satisfied with the IFA’s response, they can go to the FOS. If a complaint has been upheld but the adviser is no longer in business, investors can also complain to the Financial Services Compensation Scheme and apply for compensation.
Mr Hoban
No, I cannot. I have two minutes left. My hon. Friend and others asked about section 14, which I would like to address; I am sure that he will be grateful if I do.
I have yet to be persuaded that a section 14 inquiry is appropriate. It certainly would not be appropriate to announce one while enforcement action is being taken against any party to the matter. The powers are available where it appears that significant damage has been done to the interests of consumers that might not have occurred but for a serious failure of regulation. It is worth pointing out that the power has never been used. Throughout the life of the Financial Services and Markets Act 2000, many issues have not been examined.
As I have said, it is not the FSA’s role to ensure that no firm ever fails, to approve the investment strategy of every OEIC operating in the UK or to ensure that all investments are sound. The FSA does not audit or sign off an OEIC’s accounts. That responsibility rests elsewhere. It was the FSA, through its ARROW inspection, that identified the issues in Arch Cru.
It is vital that everyone engaged in the matter—the regulator, industry players, IFAs and others—reflects on the lessons learned. Many issues emerge, including the scheme’s complexity and consumers’ need for better financial education and better-quality advice. We look carefully at every lesson learned from such cases, and that is reflected in our thinking on the operation of the FSA.