Access to Redress Schemes

Debate between Richard Foord and Alistair Carmichael

Thursday 18th April 2024 Commons Chamber

[Richard Foord]

The hon. Member is exactly right to draw a thread between several of these scandals. That is partly because when a new scandal emerges, the organisation responsible is often the organisation charged with redress. Andrew Bailey, while chief executive of the Financial Conduct Authority, said in 2017 that

“it just does not seem to be sensible that, every time one of these things happens, we have to set up something new.”

Beyond the Post Office schemes, we have heard criticism both here and in the press on the infected blood inquiry, as the hon. Member mentioned, and Windrush. That criticism has pointed to intolerable delays or the problematic features that often let the offending firm or institution off the hook.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I am interested to develop my hon. Friend’s thought about the Financial Conduct Authority. If I am able, I will speak at greater length about it later in the debate. It administers the Financial Services Compensation Scheme, which is a fund set up by levies on financial services companies themselves. It is the maladministration of the FCA or a lack of proper regulation that often leads to these claims being brought. Essentially, the people paying for the scheme have to do so because of the incompetence of the FCA.

[Richard Foord]

My right hon. Friend is exactly right. The FCA is not directly accountable to Parliament, but is accountable to Parliament through the Treasury. I, too, have had constituents finding themselves in a David and Goliath scenario, trying to tackle issues of unfairness with the FCA.

Likewise, in finance, we have seen the mis-selling of interest rate hedging products and widespread financial misconduct against small and medium-sized enterprises by the Royal Bank of Scotland, for example. Last year, the all-party parliamentary group on fair business banking conducted the first systematic review of compensation schemes in the UK and found flaws common to several of them. Schemes are frequently blighted by unnecessary complexity, delays and a huge emotional and legal burden on victims. Often schemes are shrouded in secrecy and lack proper independence.