Financial Conduct Authority Redress Scheme

Debate between Michael Moore and Guto Bebb

Thursday 4th December 2014 Commons Chamber

[Guto Bebb]

I am sure my hon. and learned Friend’s point will be supported by thousands of businesses that feel they have been excluded from the scheme. They might not think that it is working properly, but they do feel that they should have been included. That exclusion has not been explained to the satisfaction of either the businesses affected or the all-party group on interest rate swap mis-selling. Indeed, that is one of the issues I will touch on when I address the scheme’s lack of transparency.

[Michael Moore (Berwickshire, Roxburgh and Selkirk) (LD)]

I pay tribute to my hon. Friend for all the work he has been doing on this issue with others across the House. One of my constituents, Heather Buchanan, and her husband have, happily, got redress, but they are now in a major battle about consequential losses. Does my hon. Friend have a view on how we can help collectively focus attention on bad issues so that they are not lost in the murk of commercial negotiations in the banks?

[Guto Bebb]

I am grateful for that intervention. The issue of consequential losses is of significant concern, because when the FCA redress scheme was established it clearly said that consequential losses would be dealt with on the basis of accepted legal principles, and yet of the £310 million-worth of consequential losses that have been paid out, £305 million relates only to interest at 8%. In other words, claims for other consequential losses have been derisory under the scheme thus far.

I want to highlight two other concerns. Tax treatment of redress payments is a real concern that can be dealt with by the Government and, as I have said, I will also touch on the exclusion of those businesses sold embedded swaps.

I will be quick, because I am aware that many hon. Members want to speak. I have a simple first example of the lack of consistency. When the scheme was established, it was decided that consequential losses and the redress would be paid in one instalment. Many businesses argued that that was unreasonable and unfair, and as a result of the second Backbench Business debate on this issue, nine of the 11 banks that are in the scheme agreed that they would split those payments. The FCA, however, despite saying that it wanted a consistent scheme, has allowed two banks to continue to insist on a single payment. That is a clear example of a lack of consistency.

The evidence I have gathered also shows that there is a lack of consistency on outcomes within individual banks, which clearly raises a question about how the work of independent reviewers is being overseen. If they are coming up with conclusions and recommendations for redress that are significantly different for businesses with very similar problems, there is a question as to whether the work of those independent reviewers is being monitored properly.

Oral Answers to Questions

Debate between Michael Moore and Guto Bebb

Wednesday 14th September 2011 Commons Chamber

[Michael Moore]

The details of the commission’s remit and the time scale will be announced by the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper)—the Minister responsible for constitutional reform—at the appropriate moment, as he indicated last week. As for all the issues to be considered by the commission, I am sure that its members have heard the hon. Gentleman’s opening bid.

[Guto Bebb]

Will the Secretary of State make representations to the Deputy Prime Minister to ensure that the issue of Barnett consequentials is taken into consideration as part of the commission’s terms of reference?

[Michael Moore]

The commission will not give specific consideration to the Barnett formula, or to funding arrangements around the United Kingdom. We have made a separate commitment within the coalition agreement to look at all those matters when we have achieved our primary objective of sorting out the public finances.

Oral Answers to Questions

Debate between Michael Moore and Guto Bebb

Wednesday 4th May 2011 Commons Chamber

[Michael Moore]

I am happy to acknowledge that under the previous Government, of whom the hon. Lady was a member, youth unemployment rose consistently through periods of growth as well as during the recession. I accept that we have a major challenge, which is why I will bring together different employment sector representatives in Irvine in a couple of weeks’ time.

It is important for all of us that we get the voluntary sector engaged. The future jobs fund was a very costly scheme, and its results do not bear out the hon. Lady’s assertions. It is not the case that it led to sustainable jobs—but the new Work programme will do exactly that.

[Guto Bebb (Aberconwy) (Con)]

2. What discussions he has had with the Secretary of State for Work and Pensions on the implementation in Scotland of the Government’s proposals for universal credit.