Compensation (Financial Services) Bill - Second Reading of the entire bill

The Minister argued that while no regulatory system can completely eradicate risk, this Bill is necessary to provide compensation for victims. He emphasised the Government's acceptance of Dame Elizabeth Gloster’s report and its commitment to compensating those affected by LCF collapse and pension liberation fraud.

He questioned the Minister about whether the FCA has the powers and capacity necessary to protect consumers after Dame Elizabeth Gloster's report on regulatory failings.

Hollinrake agreed with the need for stronger accountability within the FCA, suggesting that identifying individuals responsible for incompetence or fraudulent activities is crucial to prevent future failures.

Hanvey requested an intervention but no further details were provided in the text.

The Bill compensates victims of London Capital & Finance PLC for losses amounting to £237 million, with a compensation scheme costing taxpayers about £120 million. Pat McFadden supports this measure due to regulatory failures highlighted by Dame Elizabeth Gloster’s report. He questions the 80% FSCS limit chosen and seeks clarity on practical implementation and prevention of future investment failures.

Intervened to highlight that a Member of Parliament received compensation from subsidiaries involved in mis-selling, raising ethical concerns about profiting from such situations.

Asked McFadden if it is fair for responsible lenders to suffer losses due to regulatory failures while others may profit. Highlighted a case in his constituency where individuals invested based on FCA endorsement and lost significant sums.

Supports the establishment of a compensation scheme for pension liberation scams and LCF bondholders, but criticises the lack of broader measures to prevent future regulatory failures. Emphasises the need for a more proactive approach to identifying and penalizing fraudulent activities early.

Welcomes progress made by the Bill but seeks clarification on whether bondholders must surrender all bonds to qualify for compensation, highlighting concerns about potential financial losses and the need for clear guidance.

Supports the Bill but criticises the Government for not addressing underlying regulatory failures. Highlights FCA's negligence in supervising LCF despite warnings, calling for a more robust financial regulation system.

Welcomes the Bill as necessary compensation for victims of FCA failures. Emphasises that proper regulations must be established to prevent future occurrences.

Supports the Bill but calls for full compensation and better auditing standards. Criticises FCA's failure to regulate mini-bonds despite early warnings.

Supports the Bill and raises concerns about demutualisation of Liverpool Victoria, highlighting similar regulatory issues to LCF scandal.

Welcomes the Bill while asking questions regarding its broader applicability and compensation for deceased victims. Emphasises protection of pensioners through the legislation.

Minister John Glen acknowledged constituents affected by LCF issues and stated that the Government will establish a compensation scheme for exceptional circumstances. He highlighted the unique situation of LCF as an authorised firm despite not receiving income from regulated activities, making it exceptional compared to other mini-bond issuers. Glen emphasised that the Government's approach follows historical precedent with only three compensation schemes established in 35 years and mentioned ongoing consultations to regulate mini-bonds under FCA. He also expressed confidence in the transformation programme at the FCA and commitment to ensuring victims of fraudulent pension liberation receive their pensions.

Intervened briefly, expressing encouragement for the Minister's confidence in FCA's transformation programme and asked if he would sit down with the new chief executive to ensure consumer interests are protected during the demutualisation of Liverpool Victoria.