Commons Sense

House of Commons · Ministers' Questions

Consumers of Financial Services: Compensation

Tuesday 20 June 2023 · 3 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 2 Not answered 0

Key points

  • Bob Blackman asked the Minister about supporting consumers who have not received compensation due to third-party actions causing financial loss.
  • Bob Blackman emphasized the importance of banks paying compensation when recommended by the ombudsman and mentioned the Government's compensation for Equitable Life policyholders.
  • Nick Smith asked the Minister to address delays in the redress scheme for British Steel pension scheme claimants.

Topics (select to filter)

Questions & Answers

Q1 Bob Blackman Con Harrow East
Context

The question arises from cases where third-party actions have led to financial loss and the issue of compensation in such scenarios.

Question

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.

Answer from Andrew Griffith

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.

Partly answered

Not addressed: Specific steps to support consumers were not detailed; focus was on regulatory clarity.

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Q2 Bob Blackman Con Harrow East
Context

The question stems from the underspent compensation budget allocated to pay off claims against the Government by Equitable Life policyholders.

Question

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. 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?

Answer from Andrew Griffith

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

Not addressed: Use of underspent budget for compensation was not addressed; referred back to old terms from 2010.

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Q3 Nick Smith Lab Blaenau Gwent and Rhymney
Employment Benefits & Welfare
Context

Steelworkers who were part of the British Steel pension scheme have faced significant delays in receiving redress through various financial organisations.

Question

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.

Answer from Andrew Griffith

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

Partly answered

Not addressed: Commitment to look into cases but no specific timeline or measures were detailed.

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