Ms Stella Creasy
MP for Walthamstow · Labour (Co-op) · United Kingdom
“I thank the Foreign Secretary for his clear-sighted commitment not only to talk about a two-state solution, but to actually try to act to achieve it, as the only foundation of a safe Israel and a free Palestine.”
“Could he reassure the House that we will not acquiesce and bend to such pressure, and that the only action that could ever be acceptable to us to make us contemplate reversing this ban would be a halt on the E1 development and a permanent end to settler violence?”
“I start by paying tribute to the new Minister, my hon. Friend the Member for Vauxhall and Camberwell Green (Florence Eshalomi), for all the work she did on the Housing, Communities and Local Government Committee on these issues. I know that she will do a brilliant job in this role.”
“I do not really understand the technology, but I know that he does, and I understand and share his fear accordingly. We come here today to debate this Bill because we all know that trust is a bygone issue in our politics.”
“We would welcome her having that conversation, which might be more illuminating than whether she is concerned about Zach Goldmsith’s leaflets. I add my support to the amendments tabled by my hon.”
“From today, if we do not take a stand with this Bill to tackle the ways that money has infiltrated our politics, the risk is that they will think we are acting in the interests of our own back pockets.”
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“Those were costs that the CCG had already claimed it would pay and, indeed, that CHP knew about and subsequently, mysteriously, issued credit notes for. However, one can imagine what it must feel like for volunteers to receive a bill for £200,000 from an organisation claiming to represent the NHS. I draw to the Minister’s attention the detail of the coronavirus legislation that places a moratorium on commercial landlords evicting people. The current time of great uncertainty in funding and operations for the toy library means that it is hard for it to raise funds. Mr Meakin is acting as the Christmas Grinch in trying to chase revenue sources for which he has already been paid twice, to justify evicting the toy library. It gets worse, however.”
“However, it should trouble the Minister, given the concern that I know he has for value for money, that any one side of the NHS should be charging another double the cost of a building, before service charges. I think that the honest truth is that that is why the CCG has refused to work with me and residents to try to save the toy library, and why, indeed, it is colluding in evicting it. It should also trouble the Minister that Andrew Meakin, the regional property director for CHP, wrote to me threatening to send bailiffs to the toy library to recover nearly £200,000-worth of debt that he claimed it owed in building and service charges. He argued that CHP is a publicly owned company and could not see any option except to progress debt collection through the usual channels, to recoup public funds. That was in October.”
“It is not just about the rent they are trying to charge. When we look at the amounts of money that the CCG and CHP seem to want, the toy library’s charges seem to have increased at a much higher rate than for the property as a whole: from £77,000 in 2019 to £102,000 in 2020-21—an annual increase of 32%—yet the overall lease for Comely Bank seems to have increased by only 2.8%. One might query why the toy library, a charitable organisation, is suddenly being asked to pay an excessive amount of rent and charges, compared with anyone in the rest of the building. Leaving that aside, the CCG itself—it has not negotiated with the toy library but summarily issued documents—has agreed to pay for the presence of the toy library, honouring the original agreement for a peppercorn rent so that the toy library could be in Walthamstow.”
“The volunteers have tried, in vain, because they know how much it means to the community and because they have suddenly started getting bills for hundreds of thousands of pounds for the building. Suddenly, Waltham Forest CCG wished to claim that the cost of having a toy library there is around £60,000 a year. For property aficionados, let me be clear what we are talking about: it is 120 square metres, with a kitchen, two toilets and a garden. I know everybody thinks that Walthamstow village is fancy and expensive, but I have talked to local estate agents and even if it were the most swanky building, the most they think such a building should cost is £30,000 a year, with service charges. I thank community estate agents, such as Strettons, for helping us and for being so shocked for our community.”
“For eight years, and through multiple ownership structures of the building, including the eventual abolition of the PCT and then working with the NHS Waltham Forest clinical commissioning group, the Walthamstow toy library has frankly been treated as a nuisance by the CCG and CHP. Those organisations have also failed to provide adequate healthcare services to my community. Indeed, the CCG is one of the services most complained about to my office. For years, the volunteers who work at the Walthamstow toy library have been trying to sort out their lease, to work with the CCG and to be commissioned to provide services to help address issues such as the poor vaccination rate or childhood obesity. Frankly, the CCG has not just refused but has been point-blank rude about those offers, including to me and the volunteers.”
“Although the PCTs only had a small stake, they had some ability to determine how local facilities were built and used. Since PCTs were abolished and their stake referred to a company called Community Health Partnerships, all that local control has gone. LIFTCo behaviour is now dominated by their private financers, often hidden from view, who are seeking to maximise their returns by charging extortionately high rents and service charges. As this case shows, the overriding drive of Community Health Partnerships is not what our community needs or wants, but how it can generate as much income as possible to pay back the debt and provide a return to its shareholders, known as RWF Health and Community Developers Ltd.”
“The Minister should be worried not just about my local toy library, but about what this episode reveals for the wider NHS property account, for which he has responsibility. The local improvement finance trust programme was supposed to be the not-for-profit version of the private finance initiative—that old chestnut—helping to bring much-needed properties to the NHS, but it is clear that the company running this building is motivated by money, not the needs of my local community. When it was first built and run by the primary care trust, it was agreed that the toy library would have a peppercorn rent, so the toy library would be there, work with healthcare providers and provide all those services to the local community. LIFTCos also meant that the NHS would have some control over GP services and primary care facilities in those buildings.”
“They do not receive any public subsidy. Occasionally, they have a grant from the council, but they fund all their activities through relentless fundraising and a network of alumni, who recognise the value of their work to local children and the community. That is why I am asking for a Christmas miracle from Ministers today. We are in danger of losing this vital resource in Walthamstow, which, importantly, represents value for money. Walthamstow toy library has been in the same building since 1986. It is a purpose-built building, on the site of the original toy library that was knocked down to make way for the Comely Bank campus, which is the space it is now in. The Comely Bank campus was a local improvement finance trust company initiative for the NHS, which is where the Minister starts to begin to take responsibility for this.”
“Indeed, during the pandemic they stepped up to support many low income families in Walthamstow, offering one-to-one contact with 150 of them, providing activity ideas and helping to deal with the isolation that so many families have felt in the past months. They offered parents one-to-one support with a trained counsellor, renewed play sessions, when they could, and offered craft packs to nearly 1,000 local children. These are critical services that have never been more needed, which have a health outcome. They deal with mental health and mean we have a connection with some of the hardest-to-reach children in our community. The Walthamstow toy library has just eight members of staff and an annual turnover of £85,000. That means that the work they do and the impact they have is all the more remarkable.”
“I am sorry to say that my borough does not meet that for any vaccine: under 30% of two to three-year-olds have had the flu jab in my borough this year. Our measles, mumps, rubella rates are well below the England average, with only 83% of children aged 24 months in Waltham Forest vaccinated. Our rates of childhood obesity are also above the national average. The library supports not just children but their mums. During lockdown, my office has been inundated by mothers with post-natal depression who have had no support since health visitors were taken away. It has been the toy library that has offered vital help for those mums, too.”
“You would assume such facilities and service wouldn’t be available to those who couldn’t financially afford it but this isn’t the case. The Toy Library doesn’t have such barriers in place, so it means if you are a parent who needs that financial support through borrowing of toys or affordable entry/membership it is available. I felt very supported and encouraged to become part of the Toy Library without being judged for my circumstances.” The Minister might say to me, “That sounds all very nice, but what about healthcare?” That is ultimately his priority. I want to highlight that we have a very high level of challenge in my local community when it comes to child and maternal health. The World Health Organisation has a vaccination target of 95%.”
“It means a wealth of activities: help to support new mums to breastfeed, mental health support for those with post-natal depression, support for children with special educational needs, advice on healthy eating and living activities, and outreach, as well as the promotion of wider social objectives such as recycling and, of course, loaning toys and encouraging child development. Do not take it from me, Minister—take it from the users of the service. Stacy, one of the many mums from Walthamstow on a low income, wrote to me: “As a first time mum, I found the social aspect of motherhood very daunting. The thought of meeting other mothers whilst supporting my child to play and interact with other children seemed almost impossible! This was until I came across the Toy Library.”
“The Walthamstow toy library has been there for more than 40 years, serving thousands of children and their families locally. It is vital community resource. It does not just loan toys, but helps with children’s social development and provides emotional support to parents in the ninth poorest community for child poverty in the country. The library’s mission is to provide a safe and stimulating place for young children and their parents and carers to play, learn and interact. What does that mean in practice?”
“I beg to move, That this House has considered the NHS’s role in the eviction of the Walthamstow Toy Library. It is a pleasure to serve under your chairmanship, Mr Hollobone. I want to start by saying that I am sorry that we must have this debate, because I know there are some incredibly serious issues facing our health service. All our communities are dealing with the consequences of the pandemic. I wish I were asking the Minister about that, because that should be his priority. However, under the cover of the pandemic, something is taking place in my community. I am hoping this morning for a bit of a Christmas miracle and some positive news for my local community about something that hundreds of residents have expressed concern about, and I know many more will. It is the fate of our local toy library.”
“It may be useful to clarify that at no point has the CCG told the toy library that it is to leave the building; indeed, the CCG keeps telling me that it is not evicting the toy library. More importantly, in the chronology that the Minister talks about, if the toy library had been told to find an alternative building, why was it working on commissioning services together with the CCG? I fear that the Minister has been sadly misled by Selina Douglas and the Waltham Forest CCG on this matter.”
“I hope CHP and Waltham Forest CCG are listening very clearly, and that they will finally start to engage properly with my community. In view of that, I wish everybody a merry Christmas.”
“I thank the Minister for letting me intervene, and for the good Christmas cheer that he is bringing. Can I confirm that a side letter was sent by the CCG to the Walthamstow toy library in, I think, 2018, committing to paying all the costs of it being in the building? As such, the suggestion that charges were outstanding is another issue. When he looks into the matter, could he also clarify who will own the building after 2030, when the original lease runs out? We are less than 10 years away, and surely any redevelopment of the building has to take place in that context. I will very much take the Minister up on his offer of a meeting, because I think a way forward can be found to save the Walthamstow toy library where it is.”
“At various points the FCA has been brought into these companies to determine whether they were making good affordability decisions—whether, in layman’s terms, they were ripping off our constituents. At every point, that affordability decision did not meet the needs of those customers. How do we know that? Because the ombudsman then had to interfere to help people who were in debt. The result was the same: the lenders all fell into administration, not because of the action of the FCA but because the ombudsman was making them repay our constituents, who had been ripped off by them.”
“However—given it is that time of year—it does not take a rocket scientist to work out that if we ask turkeys to decide what is on the menu for Christmas, they will often say that a nut roast is better, and that is what happens when we ask these companies whether a loan is affordable. They would tell their clients that they could afford these loans, because the way they made their money was to re-lend. It was not for someone to borrow from them and pay it all back—it was for that person to borrow from them and get into a cycle of continually borrowing from them, because they would make a lot more money. Once a person was hooked, they would borrow and borrow. That was the decision about affordability.”
“They have not collapsed as a result of the work of the FCA, but because of the work of the ombudsman. In 2014, when Wonga was clearly a problem for so many of our constituents, the FCA agreed a redress scheme for 375 customers and announced that it had appointed a skilled person to monitor the new lending decisions that Wonga was going to make, to ensure that the issue was sorted. In November 2015, the FCA agreed a redress scheme for 4,000 QuickQuid customers worth £1.7 million, and in October 2017 it agreed a £14.8 million redress scheme for 250,000 BrightHouse customers in respect of 384 agreements for lending that may not have been affordable. That is the critical issue here. At every point, the FCA has acted to look at the affordability of the loans.”
“I know, too, that the Minister is not his predecessor, who, when I first went to see him about payday lending, literally patted me on the back, congratulated me on finding an issue that I could issue a press release to my local community about and sent me on my way. I know he is not like that; he recognises when there is a problem. However, if he looks at the regulatory history of the FSA on this issue, he will also see that there was a problem. Let me set that out with companies that people will have heard of. They will have heard of Wonga, QuickQuid and BrightHouse, all of which operate in constituencies across the country. All these companies have collapsed or are in financial difficulty because of the debts they owe to their customers, our constituents, because of the way in which they lent them money on credit.”
“Clearly we are starting that conversation in our country, but we need to do much more. Why do we need to do much more? Because it took too long to deal with the payday lending industry. In 2010, when I was first elected, I already knew many colleagues in this place were seeing these companies on their high streets and the problems with the eye-watering interest rates, where people thought they had missed where the decimal point was. Yet nothing was done for years, and those companies exploded, not just in our high streets but online, and our constituents got into huge amounts of debt. I know that the Minister agrees with me that it took too long.”
“On Tuesday, we talked a lot in this Committee about the debts already in our communities and the debts to come, which is why this is an urgent issue that cannot really be dealt with in another review or consultation, which will go on for 18 months, because by then, in every one of our constituencies, too many people will have lost their jobs and possibly their homes, and will be in what we are calling problem debt for decades to come. Indeed, I believe this Committee is already having a positive impact on that conversation, because on Tuesday we talked about the importance of making problem debt as much of an issue for the sidebar of shame in the Daily Mail as Kim Kardashian’s derrière, and last night I saw that the Daily Mail had started talking about the horror of middle-class people having to go to food banks.”
“However, I know that he wants the FCA to be more agile and does not want to have people like me continually coming to him and him knowing that there is a problem, but seeing this trade-off, as this aspect is overthought almost, with too much emphasis on the unintended consequences of acting and no emphasis on the unintended consequences of not acting on some of these issues. In order to cut through that, these amendments would give a clear direction to the FCA about what consumer detriment is, why and how it needs to act, and the particular issue it needs to take into account when it comes to debt.”
“I believe that the FCA was set up to prevent problems, but if we look at its track record in some of those problem areas, we see where delays in dealing with them has led to our constituents paying the price. Bear with me, Committee; I think it is worth sharing that example, because it explains why these amendments make sense. Indeed, I believe the Minister agrees with me on this. A bit like earlier, with the lead generators, I am sure he already has a folder full of examples of where the FCA has done brilliant work in tackling consumer detriment. In fact, I can see all the paper—goodness me, all the trees that have gone into that!”
“I want to put that on record, because the Minister and I have talked for a long time about my concerns about the FCA. I acknowledge that it has made progress. My point is about the pace at which it has made progress, about cutting through the stand-off that we sometimes see, whereby people recognise that this is a problematic type of credit or, as my right hon. Friend the shadow Minister has talked about, where issues arise for our constituents—the people who come into our constituency offices and tell us about their ongoing battles—and about ensuring that we do not just give them protection, which means avenues for redress, but actually prevent those problems.”
“It matters that we take a careful look at what the FCA is doing, because the FCA is our constituents’ best defence against the velociraptors of the credit industries in this country. I use “credit industries” widely, because for me this is not just about the high-cost credit industry. However, in supporting the new clauses, I want to share with the Committee the experiences around the high-cost credit industry and, in particular, the pay-day loan sector, because I think they speak to the challenges with the Financial Conduct Authority and why we need to amend the Bill, to ensure that as we give the FCA more powers, it truly has our constituents’ interests at the forefront of its mind. I do not doubt the impact that the FCA has had.”
“It is a pleasure to serve under your chairmanship, Mr Davies, as ever, for the last time on this Bill. Let us make it a good one. I will try to keep it lively and maybe capture the attention of everybody on the Committee about the things we can do. The new clauses provide the moment to finally talk about the big beast in this Bill: the Financial Conduct Authority. I say “big beast”, because, as someone who has tracked not only high-cost credit, but credit companies—as I know the Minister has for many years—I sometimes feel like Bob Peck in “Jurassic Park”, who played the warden, Robert Muldoon, who tried to warn people about the velociraptors, but was also supremely impressed by the way in which they evolved to be able to kill. In this case it is about evolving to be able to exploit.”
“I am conscious of time, but approximately 1 million households that could ill afford it have lost out on about £1 billion of compensation from Wonga and QuickQuid. Does the Minister really believe that under the existing regime that he is defending, there has been sufficient recognition of what it means to consumers when it goes wrong, and that there is no need for change?”
“However, the point at which people get into debt and cannot get out of it—that business model that was about hooking people in and keeping them paying—has ended, because of the cap. In this country, if someone takes out a payday loan, they will never pay back more than double what they borrowed, including the interest fees and the charges. That is a really important point in these new clauses, because the whole point was capping not just interest rates, but the whole cost of a loan. As I said earlier, exploitation in the credit industry is like water: it finds the loopholes. These new clauses speak to other forms of loopholes.”
“As I said this morning, the challenge is that the FCA moves very slowly, but this industry—credit in its broadest sense, not just high-cost credit—moves very quickly. We know that what has stopped consumer detriment is being able to cap what these companies can charge, and we know that most of all from the payday lending industry. The payday lending industry still exists in this country, but the reason we have not had people turning up to our surgeries, or seen these companies on our high streets or indeed in our inboxes, is that regulation has meant that people are not being exploited by them in the way that they were. The companies can still operate—those that want to lend to people in a short-term and effective way without exploiting them.”
“These new clauses are about how we can get proper consumer protection so that we do not get into those positions at all, as well as taking on board what we have learned in the past seven years about what actually works to protect consumers, and the reality is that it is capping. Capping the costs of credit has been a very effective, cheap and clear form of regulation, which has benefited industry and consumer alike. These new clauses are about giving the FCA the power to use that evidence to help to protect our consumers, because, sadly, the detriment that made capping payday lending such an effective thing to do is now appearing in many other industries. That speaks to the whack-a-mole challenge that we have with credit in this country.”
“It is a pleasure to serve under your chairmanship this afternoon, Dr Huq—all of us who have one of those titles but never really use it probably ought to, not least with our bank managers on issues such as this. The new clauses we discussed this morning were about when the FCA, having been involved with a company, has let down our constituents, and that is why we pushed new clause 21 to a vote: fundamentally, there are thousands of people in this country, many of them our constituents, who will be denied compensation because the companies that owe them compensation have gone into administration on the FCA’s watch.”
“Just as with the payday loan industry, as soon as we started talking about these companies, along came the offers of dinners and discussions and talks, where the industry says it is in fact a misunderstood new technology. Those of us who are not regularly on the internet have obviously missed them.”
“Imagine what it is like now, with people having been stuck at home and stuck on their phones. The Money and Mental Health Policy Institute found that more than 3 million people with mental health problems have found it harder during the pandemic to control their online spending, and two in five said the BNPL industry has been “harder to resist”. Because it is not regulated, it does not have to follow any of the rules we might want to point to that protect consumers. That is why we see all those adverts saying, “No interest, no fees—don’t worry about it.” The industry does not have to provide the normal financial information we see in other forms of credit because it is not regulated in that way.”
“The companies will say that they are very good to their customers because they do not lend more than people need and they do not charge interest—the companies’ interest is in people paying back the money—but those companies go silent on what they do when people do not pay back. What happens to people’s credit references? How do they chase money? Do they use debt collection agencies? Those companies are growing rapidly, just as the payday lending industry did. We watched that happen and, in that Cassandra-like way, all tried to warn of it, but it took too long for us to act. In 2019 Klarna was boasting that it had signed a partnership with a new merchant every eight minutes in this country. By the end of 2019, 6 million people had used its product, and it said that 55,000 were using it weekly.”
“Absolutely. We know who such companies are targeting, and they are doing so deliberately. I hate to say this, as I do want to win over the Committee, but we might not be their target audience at this point in our lives, because we might not be actively reading the social influencer media posts. I might be completely wrong—I am sure some Government Members are regularly on their Instagram accounts looking at posts by ASOS. Some 20% of those young people say they have missed a payment in the last year—the figure has doubled in the last year—because they thought that a purchase would cost a certain amount and that they had an income, but that income has gone.”
“The new clause would ensure that Ministers could act based on the industry’s actions, given the risks that come from them. Unlike customers of Amigo Loans or indeed the remaining payday loan industry—or even the credit card industry—nobody who uses buy now, pay later can go to the ombudsman for redress, so what do they do if they get into difficulty? I pay tribute to Alice Tapper from Go Fund Yourself, who has been collecting the evidence about young people getting into debt from unaffordable forms of spending with such companies and not knowing how to get out of it.”
“New clause 16 would ensure that all forms of consumer credit are covered by regulation, because the gap that Klarna and company have fallen into is arguing that they are not a form of consumer credit so they do not need to be regulated. We should always apply a sniff test: if somebody is giving us money to buy things on tick, that is a form of credit. If it walks like a duck and talks like a duck, it should be regulated like ducks should—see, we have moved on from the dinosaurs to ducks. New clause 17 would make rules explicitly about the buy now, pay later industry. I do not believe we can wait another year or so before we do something. It makes sense to bring the industry under the FCA’s umbrella so that the FCA can act.”
“I have made a series of complaints to organisations such as the Advertising Standards Authority about these issues, because, just as with payday lending, we have seen the rapid expansion of these companies. My worry is that if we take 18 months it could be too late in terms of consumer detriment. I do not doubt these companies when they say they want to have a sustainable business model, but it is for us in this place, in crafting the Bill, to decide what sustainability is and how they make their money. Otherwise, we are handing them our young consumers, in particular, on a plate to be exploited. The new clauses speak to those issues.”
“Sadly, during the pandemic, none of us has been able to take up any of those offers to explain our concerns to these companies directly, as opposed to on Zoom. It is a simple concern: the way in which these products are marketed encourages people to spend money as a way of dealing with the emotional and social impacts of the pandemic. The adverts, using those social influencers, say, “When you’re feeling low, sat at home by yourself with nowhere to go, there is something to make you feel better.” Essentially, the message is, “Get into debt. Don’t worry about it. You can spread the payments. Don’t worry about whether you can afford it.” They get away with saying and doing that because they are not covered by the regulations. I know the Minister is looking at this issue—he said so—and that the FCA is doing so.”
“I hope, if the Minister will not listen to me, that he will at least listen to Martin Lewis and Alice Tapper, who have been trying to help people in financial difficulty because they cannot go to the ombudsman. I beg to ask leave to withdraw the motion. Clause, by leave, withdrawn. New Clause 17 Regulation of buy-now-pay-later firms “The Treasury must by regulations make provision for— (a) buy-now-pay-later credit services, and (b) other lending services that have non interest-bearing elements to be regulated by the FCA.”— (Stella Creasy.) This new clause would bring the non interest-bearing elements of bring buy-now-pay-later lending and similar services under the regulatory ambit of the FCA. Brought up, and read the First time. Question proposed , That the clause be read a Second time.”
“The Minister knows that the FCA has been, and will continue to be, timid about using capping, because it is looking for political leadership to say that capping is the right to do. I am happy to withdraw new clause 16, but I will press new clause 17 to a vote because I think we should send a message that we are listening to the consumers who are already in debt with those buy-now-pay-later companies. It is an incredibly reasonable clause that says that we will regulate and not leave people hanging. The Minister has not given any succour to that idea. He has talked about a review and the possibility of some consideration later, but that is just too late. Too many people are already in debt with those companies.”
“As well as winner of a Titmuss prize, I think you will find, Dr Huq. My father got excited that I meant Abi, and my mother thought I meant Fred—it was neither. I listened to the Minister, and was all eerily familiar. It was like the conversations that we had on payday lending, when everyone mentioned the then Office of Fair Trading. I appreciate that that conversation was not with the Minister, but the outcome for our constituents will be the same. It is Christmas; does he think that Klarna, Clearpay and Laybuy will not be heavily pressing their product on our constituents? We could vote to send a message that change will come in the next couple of months. We could sound the alarm that we did not sound on payday lending until millions of people were in debt.”
“If the Treasury will not act, it falls to all of us in Parliament to ask where else we can scrutinise how our constituents are being lent to and whether they are being ripped off.”
“I beg to move, That the clause be read a Second time. I do not intend to speak to this new clause for very long because my case has already been made. This is a simple clause about the powers of the FCA to do investigations and about who has the power to require it to do them—currently, that is the Treasury. The new clause suggests that a Select Committee should be able to do that. It would most likely be the Treasury Committee, but the clause says “a relevant Select Committee”, because the issues may concern the Business, Energy and Industrial Strategy Committee. The Minister will understand my disappointment and frustration that he has not offered any opportunity to look at whether amendments or investigations are needed. Change is likely to come to our credit industry in the time that this Bill is before Parliament.”
“Is the Minister saying that he would instruct that so that we can get to the bottom of why the redress scheme did not work? If it did not, it seems rather apposite to have an independent third party that could look at issues such as that on behalf of consumers.”
“Earlier today, we talked about the fact that the Treasury instructed the FCA to get involved in the debate around payday lending. Indeed, it went into companies such as Wonga and QuickQuid and set out redress schemes. We know that they were ineffective because it ended up with the ombudsman getting involved, and it was only then that those companies went into administration because it was revealed how much they owed to our constituents. In circumstances such as that, where no doubt there would be difficult conversations about what role the Treasury and the FCA played in the process, who watches the watchmen? Who would instruct that inquiry? At the moment, that inquiry has not happened, so we do not know why that redress scheme did not work. There is no sign that the FCA wants that.”
“Brought up, and read the First time. Question put, That the clause be read a Second time.”
“(2) After paragraph 2D(2)(c) insert— ‘(d) the risks of consumer detriment associated with the firm’s business model and the likelihood for compensation claims from consumers.’ (3) After paragraph 2D(3), insert— ‘(3ZA) When assessing whether the firm has appropriate financial resources to meet the risks of consumer detriment and the likelihood of compensation claims from consumers, the Financial Conduct Authority must ensure that, at all times, firms hold sufficient financial resources to meet any likely compensation claims from customers in full.’”— (Stella Creasy.) This new clause would ensure that the FCA considers the likelihood of consumer detriment arising from the firm’s business model prior to, and following, authorisation, and that firm’s hold sufficient financial resources to meet potential compensation claims from customers in full.”