Commercial Financial Dispute Resolution Platform

Debate between Simon Kirby and Norman Lamb

Thursday 15th December 2016 Commons Chamber

[Simon Kirby]

I thank my hon. Friend for that clarification, and I apologise to the right hon. Member for Delyn for being inconsistent.

Unincorporated sole traders and small partnerships fall under the regulatory rules of the consumer credit regime. The FCA is asking how all SMEs are treated as customers of financial services, as is right and proper.

The hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell) mentioned the IRHP scheme. The redress scheme was not designed to replicate the courts system, which can be lengthy and expensive, as Members have acknowledged. Independent reviewers were put in place to oversee each case.

The hon. Member for Ceredigion (Mr Williams) asked about the timeliness of the ombudsman’s decisions. I agree that the decisions should be quick. I am assured that its decisions are faster than the courts and free for complainants. However, inevitably, complex cases will take time to resolve. He also asked about the disclosure of information. Where the ombudsman considers it appropriate to accept confidential information, an edited version, summary or description will be disclosed to the other party. I agree that it is right to pay tribute to my hon. Friend the Member for Aberconwy (Guto Bebb) for keeping this issue on the agenda.

The right hon. Member for North Norfolk (Norman Lamb) asked an important question about whistleblowers. I understand that the FCA has invited the hon. Member for East Lothian to discuss whistleblowing and I am sure he would be welcome at that meeting. To be clear, the Government recognise the information and huge value that whistleblowers provide.

[Norman Lamb]

Will the Minister give way?

[Simon Kirby]

I will not give way; I am so sorry.

The right hon. Gentleman mentioned RBS and GRG. The Government recognise the seriousness of the allegations against RBS. The FCA has stated that it is carefully considering the skilled persons report and other material and it is currently assessing what further work may be needed given the report’s findings.

The hon. Member for Redcar (Anna Turley) mentioned a constituent, and I have a great deal of sympathy with the situation in which he finds himself. The Government are committed to supporting small businesses through the tax system and through a regulatory regime that balances consumer protection and growth.

The hon. Member for Edinburgh West (Michelle Thomson) asked about GRG and the Government-owned bank. I should make it clear that Her Majesty’s Government’s shareholding is managed at arm’s length from the Government on a commercial basis and that HMG did not know about GRG’s activities. As a shareholder, HMG is not informed of internal business decisions. That is an important point.

The hon. Member for East Renfrewshire (Kirsten Oswald) asked about Connaught. I recognise the difficult position of many Connaught investors and I hope that the FCA considers any lessons to be learned from that case. I understand that an investigation into the collapse of the fund is ongoing.

The hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) mentioned duty of care. I agree that the outcome is important and that culture is vital. The FCA has principles of business, including acting fairly, on which it can take action. The consumer panel has asked the FCA to look at a duty of care. I am happy to tell hon. Members that I will write to the FCA to ask for an update on its thinking and put the letter and the reply in the Library.

I thank everyone who has contributed to the debate. I will summarise the Government’s position briefly because although we certainly do note many of the issues that are raised in the motion and by hon. Members in the debate, we have also heard that there are existing avenues open to businesses that are seeking to resolve financial disputes. In the case of the smallest businesses, there is the Financial Ombudsman Service. When there are widespread issues, the FCA has the power to take specific measures to ensure redress and, of course, the usual legal process is open to businesses.

However, the FCA has work ongoing to look at the relationship between SMEs and financial services providers, and we look forward to the next steps in that work. I assure hon. Members that we will then consider the need for future steps in that context.