Financial Guidance and Claims Bill [Lords]

Jonathan Edwards Excerpts

2nd reading: House of Commons
Monday 22nd January 2018 Commons Chamber

[Ms McVey]

I will make a little progress before taking any more interventions, because otherwise I will never get through this, and I need to.

The second part of the Bill makes provision to strengthen the regulation of claims management companies. As many hon. Members will be aware, there is evidence of malpractice in the claims management sector in the form of disproportionate fees, nuisance calls, poor service, and the encouragement of fraudulent claims.

Following an independent review of claims management regulation led by Carol Brady, the Government announced in the 2016 Budget their commitment to clamping down on malpractice in the sector. Part 2 delivers this commitment in two key ways. First, it transfers regulatory responsibility for claims management regulation from the Claims Management Regulator, a unit based in the Ministry of Justice, to the Financial Conduct Authority. Secondly, it introduces new measures to ensure that consumers are protected from being charged excessive fees. Those measures include a duty on the Financial Conduct Authority to make rules restricting fees charged for services provided in relation to financial services and products such as payment protection insurance claims, and a power for the FCA to introduce caps in other claims sectors should the need arise.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

It is great to see you back in your rightful place, Mr Deputy Speaker.

May I take the Secretary of State back to the first part of the Bill and the devolved functions in terms of debt advice? How will they be funded? Will it be based on a percentage share—a population share—of expenditure in England? Will it be based on Welsh need, or, as I read the Bill, will the Welsh Government send the Treasury a bill for its functions and then that will be levied by the FCA?

[Ms McVey]

I reiterate what the hon. Gentleman said by welcoming you, Mr Deputy Speaker, to the Chair.

The money will be collected. At the moment, what is spent and how it is spent is down to the new body being formulated. However, it will be done by Government grants and then money will be taken back—financial bodies will be paying in. Obviously, going forward, where there is most need is where most money will be going. That is how it will be viewed.