Financial Services and Markets Bill [Lords]

Sam Rushworth Excerpts

Tuesday 10th November 2026 Commons Chamber

[John Healey]

If the hon. Member would write to me or the Economic Secretary, she would be willing to take another look at that. I was not quite certain whether he was saying that Ms Beevers’s cheque was misread by a human or a machine, but it sounds in any case like there is an established error and that some form of redress and recognition is required. If he writes to us with the details, we will certainly take a look at it.

Alongside these measures, we are reforming the legal framework governing the Financial Ombudsman Service to improve the consistency and predictability of its decision making. Currently, decisions made by the ombudsman are not required to align with FCA rules. That has the potential to cause, and indeed has caused, delays in redress for consumers. It has caused uncertainty among firms on what standards they should apply. The Bill takes measures to ensure that all decisions taken by the ombudsman apply FCA rules, including the FCA consumer duty. That should deliver a more consistent set of standards across the board, both for firms and for consumers.

[Dr Sam Rushworth (Bishop Auckland) (Lab)]

The FCA failed to protect many people—mostly pensioners—who invested in legal investment scams. Does the Chancellor feel that the FCA’s current mandate and remit is broad enough to protect people from scams such as London Capital & Finance in future?

[John Healey]

The straight answer to my hon. Friend is, yes, I do regard it as sufficient. If he has a stronger case to make to the contrary, I encourage him to make it. To answer his question directly, as things stand, I do regard it as sufficiently robust and strong.

--- Later in debate ---

[Dr Sam Rushworth (Bishop Auckland) (Lab)]

The Bill contains many good things that other Members have spoken to. The Chancellor pitched it as a Bill that will unlock investment for growth. If we want people to invest, we need them to have confidence. My right hon. Friend the Member for Hayes and Harlington (John McDonnell) and I did not collaborate on our speeches, but, as he pointed out, 36% of people surveyed by the FCA believe that financial firms are not honest. When the Bank of England asked people to sum up the finance industry in a word, the word that the British people picked was “corrupt”. The Financial Services Ombudsman is receiving 216,000 complaints a year, and it is easy to see why: £1 billion is now being lost every year in investment scams. The most notable example is London Capital & Finance, but there are others, including Blackmore Bond, Basset & Gold, Astute Capital and Godwin Capital.

The Bill addresses complex issues in which I claim no expertise, but I take a strong interest in them because they are of interest to the people I represent. I want to share the experience of ordinary people who have lost their savings to unregulated investment products. I myself lost a few thousand pounds to a scam. I set up a Facebook group years ago, and the first person who contacted me was a man from Manchester. He had worked as a binman throughout his career, getting up early in the morning, working in all weathers and saving for his pension. He took the lump sum of his pension and invested it in Astute Capital. He lost all of it.

I want to talk about what that looks like as a process. It begins with an ordinary person searching to compare high-interest savings accounts with banks. They put their contact details on the internet, and then they get unsolicited calls from people with posh accents offering them investment advice and suggesting that they put their money in an ISA. They have probably heard of ISAs, and they know it is a Government-approved and tax-incentivised way to save. The person will admit to them that they are not FCA-regulated, but they probably have not heard of the FCA and may not know what that means. They may also be told that their capital is at risk, but then that nice person with a posh voice explains to them, “I have to tell you that—it’s the legal bit—but let me explain to you why you’re actually okay. Everything you’re investing is fully asset-backed up to several times its value, and we spread the risk across multiple portfolios.”

The individual trusts, they invest and they wait three years. They look forward to getting their money back with the interest they were promised, but when that time comes—this happened to customers of Astute Capital—they get told, “We’re sorry; we can’t pay you. But if you just stick with us for another six months, it’s better than causing someone to whom we’ve lent your money to default.” So they wait another six months. Six months later, their bonds are forcibly converted into shares and they are told, “Don’t worry; soon enough you’ll be able to sell those shares, and your shares are worth more than what you invested”—except they are not, and eventually the company goes into administration.

And then what happens? The person loses everything. When they investigate it, they find that a director of Astute Capital was simultaneously a director of the firm to which their money was lent. As a director of both firms, he took away the security on the debt. An ordinary person would expect that, in such a situation, there is some sort of recompense. They would think it is illegal, but it is not. People are told that they are at fault because they should have known that they were investing in an unregulated company. I had a man say to me on the phone, “I can’t look my wife in the eye. I’ve lost everything that we’ve saved over all these years.”

What happens to the directors? What happened to Timothy John Smith, who was the director of two companies? According to Companies House, he is now at Axecap Ltd, another unregulated offshore broker with many warnings against its name not to invest. For me, the most troubling part of this is that these unregulated investment schemes are entirely legal or, if there has been illegal activity, there has been no investigation and nobody has ever been held accountable. That is why the public are in disbelief, because they expect the Government and laws to protect them. They do not think this unregulated space should be allowed.

When I was elected, I raised this issue with the Financial Conduct Authority. It told me that it needs a bigger mandate to regulate this space, which it has not been given. In my last 30 seconds, I ask that the Bill be amended to give a mandate to the FCA to have oversight of unregulated activity, to make directors personally liable, to require directors of unregulated investment companies to demonstrate that they have acted responsibly, to automatically bring unregulated mini-bonds within FCA supervision, and to create a general compensation scheme for the victims of unregulated investments.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Noah Law to make the final Back-Bench contribution. Those who contributed earlier should make their way back to the Chamber.