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Consumers of Financial Services: Compensation

Volume 734: debated on Tuesday 20 June 2023

6. What steps he is taking to support consumers of financial services who have not received compensation in cases where action by a third party has led to financial loss. (905501)

My hon. Friend is a strong champion of consumers who have suffered financial loss, particularly through his chairmanship of the all-party parliamentary group on personal banking and fairer financial services. He understands that the UK does not operate a zero-loss regime where consumers of financial services are automatically compensated, but it is important that regulators make very clear where the scope of protection lies and who is eligible for compensation.

I thank my hon. Friend for that answer. It is clearly important that where the ombudsman recommends that compensation be paid, banks pay it. Equally, the Government should pay compensation, such as when the parliamentary ombudsman found against them on Equitable Life policyholders, as was mentioned by the hon. Member for Strangford (Jim Shannon). I understand that the budget to pay compensation to those policyholders has been underspent by some £300 million, so rather than return the money to the Treasury, will my hon. Friend use it to compensate the Equitable Life policyholders who have suffered in the long term?

We set out the terms of that settlement in 2010 and there is nothing to update the House on today.

For over five years, I have campaigned on behalf of steelworkers who were part of the British Steel pension scheme. Many were ripped off by sharks posing as financial advisers. While a redress scheme is now in place, legal advisers for steelworkers report claim processing delays of six months at the Financial Conduct Authority, 12 months at the Financial Services Compensation Scheme and two years at the Financial Ombudsman Service, which suggests that all is not right. Delays to cases can have a big impact on possible payouts, so will the Minister please look into the performance of those organisations? Steelworkers and other financial consumers deserve much better than this.

Yes, I will. I have had conversations with the hon. Member about that, and I will take up the case of any unwarranted delays.