Question to the HM Treasury:

To ask the Chancellor of the Exchequer, with reference to the Answer of 4 February 2021 to Question 148019 on London Capital and Finance: Insolvency, what progress the Government has made on setting up a compensation scheme which will assess whether there is justification for further compensation payments in certain circumstances for some LCF bondholders.

I know that this has been a very difficult time for LCF bondholders. The Government has announced that it will establish a compensation scheme that will provide 80% of LCF bondholders’ principle investment up to a maximum of £68,000. The scheme will be available to all LCF bondholders who have not already received compensation from the Financial Services Compensation Scheme (FSCS).

The Treasury is working to finalise the details of the scheme and guidance for bondholders on their next steps. The Government will provide further details on how the scheme will operate in due course. Bondholders do not need to do anything at this stage.

The Financial Services Compensation Scheme (FSCS) will administer the Scheme. They are committed to ensuring that payments are made to all eligible LCF bondholders within 6 months of the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill securing Royal Assent. This Bill was brought forward by the Government at the earliest possible opportunity and was introduced on 12 May 2021.

I hope that the compensation offered by the Government scheme will offer some relief to the distress and hardship suffered and provide closure on this difficult matter.