Financial Conduct Authority

Debate between Heather Wheeler and Guto Bebb

Monday 1st February 2016 Commons Chamber

[Guto Bebb (Aberconwy) (Con)]

I beg to move,

That this House believes that the Financial Conduct Authority in its current form is not fit for purpose; and has no confidence in its existing structure and procedures.

It is four years since I first raised the issue of interest swap mis-selling in this Chamber. Since then, I have led three Back-Bench business debates on the issue; an Adjournment debate on the Connaught Income Fund, which is another example of financial mis-selling; and a debate on the global restructuring group. I have also contributed to an effort to secure a debate on the future of the Royal Bank of Scotland. It is clear that I have attempted to utilise this House to bring to the attention of Members and the wider public the issue of financial mismanagement and the lack of financial regulation in the marketplace.

Some people have argued that this debate and this motion are premature. Given the evidence and information that I will present, I argue that they are long overdue. We must remember that the Financial Conduct Authority has a clear and specific mission statement:

“We aim to make sure that financial markets work well so that consumers get a fair deal.”

It states:

“This means ensuring that the financial industry is run with integrity, firms provide consumers with appropriate products and services, and consumers can trust that firms have their best interests at heart”.

I believe that the five examples that I will give in my opening speech make it clear that the Financial Conduct Authority is failing against that mission statement.

I will highlight five areas. First, I will touch on the voluntary redress scheme for the mis-selling of interest rate swap products. When I am feeling positive, I think it is a glass-half-full redress scheme, but most of the time I believe that it is a glass-half-empty one. The fact that the glass is half empty after four years is something that I take quite personally.

[Heather Wheeler (South Derbyshire) (Con)]

Does my hon. Friend agree that the glass being half full has been okay for some constituents, but that for those who are looking for consequential losses as well, the glass has been absolutely empty?

[Guto Bebb]

My hon. Friend makes an important point about one of the failures of the redress scheme. Too often, the FCA has hidden behind the argument that 80% of the people involved in the redress scheme have accepted their outcome. What it is not willing to admit is that people have accepted the outcome under duress because they needed to keep ahead and get their lives back on track.

The other four areas that I will talk about are the Connaught Income Fund, the FCA’s involvement in the report on the failures of HBOS, the promised report on the global restructuring group and the decision not to move ahead with the review of banking culture, which was communicated on new year’s eve.