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Lord Davies of Oldham
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House
Session
Year
Department
Member
Primary member
Answering member
More
Davies of Oldham, Lord (36)
Legislative stage
Legislation
Subject
More
Publisher
Draft Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) (Amendment) Order 2011 (SI 2011/2304). Lords debate on a motion to consider. Agreed to on question. Grand Committee held in the Moses Room. [Relevant document: 27th report from the Joint Committee on Statutory Instruments]
Draft Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) (Amendment) Order 2011 (SI 2011/2304). Lords debate on a motion to consider. Agreed to on question. Grand Committee held in the Moses Room. [Relevant document: 27th report from the Joint Committee on Statutory Instruments]
Lead member
Lord De Mauley
Answering member
Lord Davies of Oldham
Department
Treasury
Type
Debates on delegated legislation
Legislation
Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) (Amendment) Order 2011
Subjects
Consumers; Housing; Financial services; Financial Services Authority; Protection; Regulation; Leaseback arrangements
Date
7 September 2011
Reference
730 c59-64GC
Chamber / Committee
House of Lords Grand Committee
House
House of Lords
My Lords, decisions on mergers are generally taken by the competition authorities based on whether there is a substantial lessening of competition. This generally provides the most effective method of protecting consumers. In this particular case, and in the light of the extraordinary stress in world financial markets, the Secretary of State considered that there was urgent need for additional action. He therefore laid an order in the House on 7 October that will enable him to take the final decisions in this case and allow him to consider effects relating to the stability of the UK financial system alongside any competition issues.
My Lords, decisions on mergers are generally taken by the competition authorities based on whether there is a substantial lessening of competition. This generally provides the most effective method of protecting consumers. In this particular case, and in the light of the extraordinary stress in world financial markets, the Secretary of State considered that there was urgent need for additional action. He therefore laid an order in the House on 7 October that will enable him to take the final decisions in this case and allow him to consider effects relating to the stability of the UK financial system alongside any competition issues.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Baroness Kingsmill
(Labour)
Type
Oral answers to questions
To ask Her Majesty’ Government what steps they will take to protect consumers in the event of a merger between Lloyds-TSB and HBOS.
Subjects
Consumers; Banks; Competition; Protection; Mergers; Lloyds TSB; Halifax Bank of Scotland
Date
8 October 2008
Reference
704 c234-5
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, I am grateful to my noble friend for her opening remarks. On consumer protection, as well as the other emergency measures we have taken in the past few days, the Government are about to introduce the Banking Bill, which will reconstitute the regulation of the banking system. The interests of consumers and taxpayers will form an important part of that Bill. As the House will recognise, the Bill has been introduced in the other place and will come before this House in the not too distant future.
My Lords, I am grateful to my noble friend for her opening remarks. On consumer protection, as well as the other emergency measures we have taken in the past few days, the Government are about to introduce the Banking Bill, which will reconstitute the regulation of the banking system. The interests of consumers and taxpayers will form an important part of that Bill. As the House will recognise, the Bill has been introduced in the other place and will come before this House in the not too distant future.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Baroness Kingsmill
(Labour)
Type
Oral answers to questions
My Lords, I thank my noble friend for that reply. Obviously, in these times of trouble in the banking community, stability should come first. However, does he agree that the proposed merged group will have a very dominant position in the British banking scene, holding as it will more than 30 per cent of the current accounts in the UK? What measures do the Government feel they should introduce for the longer term to protect consumers’ interests?
Subjects
Consumers; Banks; Competition; Protection; Mergers; Lloyds TSB; Halifax Bank of Scotland
Date
8 October 2008
Reference
704 c235
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, the Chancellor’s Statement, made earlier in the other place, answers a great number of these questions. The noble Lord will have a chance to question that Statement very shortly. The issues that he raised were exactly those which have exercised the Government.
My Lords, the Chancellor’s Statement, made earlier in the other place, answers a great number of these questions. The noble Lord will have a chance to question that Statement very shortly. The issues that he raised were exactly those which have exercised the Government.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Lord Razzall
(Liberal Democrat)
Type
Oral answers to questions
My Lords, I am sure that the Minister will accept that today’s events mean that things have rather moved on since the HBOS/Lloyds proposed merger. Does he accept that we are looking to the Government for a clear statement on two fundamental issues of policy? First, what conditions will the Government impose on banks that receive capital from the taxpayer to ensure that the money is spent for the benefit of customers and consumers? Secondly, does he accept that the wider government announcement today will inevitably lead to some suspension of competitive protection for consumers? Without wishing to press the Minister for the detail of government policy on this topic, will he undertake to make a statement to the House shortly?
Subjects
Consumers; Banks; Competition; Protection; Mergers; Lloyds TSB; Halifax Bank of Scotland
Date
8 October 2008
Reference
704 c236
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, the Banking Bill has been the subject of very extensive consultation, and so it should be for a measure of such supreme importance to the British economy and the British people. I note that the noble Lord sustains his critical stance on the government action on Northern Rock. Others will think that the Government acted entirely appropriately. But all, even he, will rejoice in the fact that Northern Rock is beginning to pay back, ahead of time, its debts owed to the Government.
My Lords, the Banking Bill has been the subject of very extensive consultation, and so it should be for a measure of such supreme importance to the British economy and the British people. I note that the noble Lord sustains his critical stance on the government action on Northern Rock. Others will think that the Government acted entirely appropriately. But all, even he, will rejoice in the fact that Northern Rock is beginning to pay back, ahead of time, its debts owed to the Government.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Lord Bilimoria
(Crossbench)
Type
Oral answers to questions
My Lords, there is a saying that good judgment comes from experience and experience comes from bad judgment. What lessons have the Government learnt from the nationalisation of Northern Rock—which, after five months of indecisiveness, was nationalised in a rushed-through manner in three days? Here we are eight months later: we have no permanent major reform to the Bank of England, which is desperately needed.
Subjects
Consumers; Banks; Competition; Protection; Mergers; Lloyds TSB; Halifax Bank of Scotland
Date
8 October 2008
Reference
704 c235
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, I will shortly have the pleasure of repeating the Statement that the Chancellor made in the other place about our arrangements for British banks and strengthening the British banking system in this time of crisis. I hope the noble Lord will recognise that we have not adopted as a principle the issue with regard to foreign banks and the action that we have taken in the particular case of the Icelandic bank. That was a very specific banking failure and the Icelandic Government are in a particularly parlous state in relation to that failure. That is why, in the interests of protecting British depositors, the British Government saw fit to act.
My Lords, I will shortly have the pleasure of repeating the Statement that the Chancellor made in the other place about our arrangements for British banks and strengthening the British banking system in this time of crisis. I hope the noble Lord will recognise that we have not adopted as a principle the issue with regard to foreign banks and the action that we have taken in the particular case of the Icelandic bank. That was a very specific banking failure and the Icelandic Government are in a particularly parlous state in relation to that failure. That is why, in the interests of protecting British depositors, the British Government saw fit to act.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Lord Lang of Monkton
(Conservative)
Type
Oral answers to questions
My Lords, I declare an interest in both these banks: I am now rather a small shareholder, and a depositor in one of them. By what principle do Her Majesty’s Government justify the guaranteeing of all British deposits in a foreign bank but not doing the same for British deposits in a British bank?
Subjects
Consumers; Banks; Competition; Protection; Mergers; Lloyds TSB; Halifax Bank of Scotland
Date
8 October 2008
Reference
704 c235-6
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, the Office of Fair Trading will produce its report to the Secretary of State before he takes any action, and he anticipates that that report will be before him by the end of this month. Of course the OFT retains an interest in competition issues, and what my noble friend has suggested is bound to be an issue for it when a bank has such a significant stake in the market.
My Lords, the Office of Fair Trading will produce its report to the Secretary of State before he takes any action, and he anticipates that that report will be before him by the end of this month. Of course the OFT retains an interest in competition issues, and what my noble friend has suggested is bound to be an issue for it when a bank has such a significant stake in the market.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Lord Borrie
(Labour)
Type
Oral answers to questions
My Lords, will my noble friend consider asking the Office of Fair Trading to investigate in, say, 12 months’ time whether the merger between Lloyds bank and HBOS, if it takes place, has adversely affected the consumer interest through the restriction on competition, which, as my noble friend suggested, inevitably takes place as a result of such a merger between major banks?
Subjects
Consumers; Banks; Competition; Protection; Mergers; Lloyds TSB; Halifax Bank of Scotland
Date
8 October 2008
Reference
704 c236
Chamber / Committee
House of Lords chamber
House
House of Lords
To ask Her Majesty’ Government what steps they will take to protect consumers in the event of a merger between Lloyds-TSB and HBOS.
To ask Her Majesty’ Government what steps they will take to protect consumers in the event of a merger between Lloyds-TSB and HBOS.
Asked by
Baroness Kingsmill
(Labour)
Answered by
Lord Davies of Oldham
(Labour)
Oral questions - Lead
Status
Answered
For answer on
8 October 2008
Answered on
8 October 2008
My Lords, decisions on mergers are generally taken by the competition authorities based on whether there is a substantial lessening of competition. This generally provides the most effective method of protecting consumers. In this particular case, and in the light of the extraordinary stress in world financial markets, the Secretary of State considered that there was urgent need for additional action. He therefore laid an order in the House on 7 October that will enable him to take the final decisions in this case and allow him to consider effects relating to the stability of the UK financial system alongside any competition issues.
Subjects
Consumers; Banks; Competition; Protection; Mergers; Lloyds TSB; Halifax Bank of Scotland
Date
8 October 2008
Reference
704 c234-5
Chamber / Committee
House of Lords chamber
House
House of Lords
asked Her Majesty's Government:What steps the United Kingdom financial authorities have taken to satisfy themselves, independently of the Icelandic financial authorities, of the solvency and stability of Icelandic banks taking deposits in the United Kingdom; and of that of the Icelandic Deposit Guarantees and Investor-Compensation Scheme behind which the United...
asked Her Majesty's Government:What steps the United Kingdom financial authorities have taken to satisfy themselves, independently of the Icelandic financial authorities, of the solvency and stability of Icelandic banks taking deposits in the United Kingdom; and of that of the Icelandic Deposit Guarantees and Investor-Compensation Scheme behind which the United...
Asked by
Lord Oakeshott of Seagrove Bay
(Liberal Democrat)
Answered by
Lord Davies of Oldham
(Labour)
Type
Written questions
Status
Answered
Answered on
15 July 2008
Overseas firms operate in the UK through a mixture of branches and subsidiaries. With regard to subsidiaries, a UK-incorporated subsidiary of an Icelandic bank is a British bank and is authorised by the Financial Services Authority (FSA) like other British banks. All subsidiaries are required to comply with FSA rules on capital, liquidity, complaints and the FSCS. All UK-incorporated subsidiaries of Icelandic banks regulated by the Financial Services Authority continue to meet threshold conditions.
With regards to branches, firms from an EEA state are permitted to passport a branch into the UK under EU legislation and are authorised by their home state regulator. The FSA is responsible for the supervision of conduct of business, financial crime and liquidity in respect of these EEA firms' UK branch business. The home state regulator is the prudential supervisor. However all EEA banks are required to meet the capital requirements implemented in their member states under the Banking Consolidation Directive and the Capital Adequacy Directive. And the FSA has a regular dialogue with overseas regulators and firms where the firms passport into the UK, to share information about the firms and specifically their UK operations.
With regard to the Icelandic Deposit Guarantees and Investor-Compensation Scheme, the UK Financial Services Compensation Scheme maintains contact with schemes in other member states. There are currently two major Icelandic players in the UK: Landsbanki provides its Icesave product through a UK branch while Kaupthing's Edge product is provided through a UK-incorporated subsidiary. As Kaupthing Edge's deposits are collected through a UK-incorporated subsidiary, they are covered exclusively by the UK's FSCS in the same way as savers with other British banks.
As Icesave is provided through a UK branch, its home state compensation scheme will apply. Where there is a gap between the coverage of the home state scheme and the UK maximum, where an EEA firm opts to contribute to the FSCS the deposit will be protected up to the UK maximum. This is the case with Icesave: it has ““topped up”” into the FSCS; the first €20,887 (around £16,700) of savers' money falls within the scope of the Icelandic deposit guarantee scheme while the remaining amount of the claim up to £35,000 is covered by the FSCS. Therefore, savers with up to £35,000 in an Icesave account would be protected against any losses in a similar way as if their savings were in a British bank.
Subjects
Compensation; Consumers; Banks; Insolvency; Iceland; Financial Services Compensation Scheme
Date
15 July 2008
Reference
4580; 703 c131-2WA
House
House of Lords
asked Her Majesty's Government:What are the total assets of the Icelandic Deposit Guarantees and Investor-Compensation Scheme which protects the first €20,887 of deposits by United Kingdom residents with United Kingdom branches of Icelandic banks; and what are the circumstances under which the United Kingdom Financial Services Compensation Scheme could be...
asked Her Majesty's Government:What are the total assets of the Icelandic Deposit Guarantees and Investor-Compensation Scheme which protects the first €20,887 of deposits by United Kingdom residents with United Kingdom branches of Icelandic banks; and what are the circumstances under which the United Kingdom Financial Services Compensation Scheme could be...
Asked by
Lord Oakeshott of Seagrove Bay
(Liberal Democrat)
Answered by
Lord Davies of Oldham
(Labour)
Type
Written questions
Status
Answered
Answered on
14 July 2008
Under the Deposit Guarantee Schemes Directive and the Investor Compensation Directive, all EEA member states are required to set up a scheme to protect depositors and also a scheme to protect investors in the circumstances laid down in the directives. The UK achieves this through the Financial Services Compensation Scheme (FSCS) which covers all Financial Services Authority (FSA) authorised banks and investment firms.
Firms passporting from an EEA state where the level and/or scope of coverage provided by their home state is lower or narrower than that provided by the FSCS, can opt to top-up into the FSCS to the level and/or scope of coverage provided by the FSCS. This means that the home state scheme is liable to pay the first tranche of compensation to the limits that apply in that state. The FSCS's liability is therefore restricted to the topped-up amount up to the UK limit of £35,000 for deposits.
Subjects
Compensation; Consumers; Bank services; Banks; Insolvency; Protection; Iceland; Financial Services Compensation Scheme
Date
14 July 2008
Reference
4579; 703 c104-5WA
House
House of Lords
My Lords, this is a matter for the independent regulator—the Financial Services Authority—and the courts. The Financial Services Authority sets the rules covering the management of with-profits funds. It requires firms pursuing reattributions to appoint an independent policyholder advocate to represent policyholders in negotiations with the firm. On completion of the negotiations, the FSA will assess the fairness of the deal and make public its conclusion on what fair treatment would require for consumers. Policyholders have a right to vote on the proposal.
My Lords, this is a matter for the independent regulator—the Financial Services Authority—and the courts. The Financial Services Authority sets the rules covering the management of with-profits funds. It requires firms pursuing reattributions to appoint an independent policyholder advocate to represent policyholders in negotiations with the firm. On completion of the negotiations, the FSA will assess the fairness of the deal and make public its conclusion on what fair treatment would require for consumers. Policyholders have a right to vote on the proposal.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Lord Joffe
(Labour)
Type
Oral answers to questions
What steps they are taking to ensure a fair result for policyholders in the current negotiations over the reattribution of the inherited estates of with-profits funds.
Subjects
Consumers; Finance; Insurance companies; Insurance; Protection
Date
22 April 2008
Reference
700 c1382
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, I am grateful to my noble friend for his question. There is a distinction between the distribution of surplus funds, which has followed and does follow the broad principle of 90 per cent to policyholders and 10 per cent to shareholders, and the issue of reattribution which arises in the Norwich Union case. This is because reattribution involves the buyout of policyholders and raises the issue of the company’s necessary assets for the future as well as accumulated assets in the past; it raises different issues. That is why the FSA scrutinises these arrangements with great care, as I indicated in my Answer. Negotiations are still going on between Norwich Union and the policyholder advocate. We await the outcome of those negotiations.
My Lords, I am grateful to my noble friend for his question. There is a distinction between the distribution of surplus funds, which has followed and does follow the broad principle of 90 per cent to policyholders and 10 per cent to shareholders, and the issue of reattribution which arises in the Norwich Union case. This is because reattribution involves the buyout of policyholders and raises the issue of the company’s necessary assets for the future as well as accumulated assets in the past; it raises different issues. That is why the FSA scrutinises these arrangements with great care, as I indicated in my Answer. Negotiations are still going on between Norwich Union and the policyholder advocate. We await the outcome of those negotiations.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Lord Joffe
(Labour)
Type
Oral answers to questions
My Lords, I thank the Minister for his reply, but the problem rests with the Financial Services Authority rules. My noble friend may not be aware that in the current negotiations relating to the reattribution of the inherited estate of the Norwich Union, amounting to £3.2 billion, both the policyholders’ advocate and Which? have expressed concern about whether policyholders will get a fair deal under the FSA rules. Although the FSA—
My Lords, are not the Government concerned that the effect of these rules will be that much of the 90 per cent of the inherited estate due to policyholders, as set out in the Government’s published policy on inherited estates, will go to shareholders rather than policyholders? Will they put pressure on the FSA to ensure that the government policy of 90 per cent of the inherited estate to policyholders and 10 per cent to shareholders will be followed in reattributions?
Subjects
Consumers; Finance; Insurance companies; Insurance; Protection
Date
22 April 2008
Reference
700 c1382
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, I emphasise again the distinction I sought to make in my Answer. Where bonuses are paid on surplus funds, the allocation is generally on the basis of 90 per cent to policyholders and 10 per cent to shareholders, a formula that the FSA has recommended. The difficulties occur on reallocation, when shareholders are buying out policyholders. In that context, not just the interests of existing policyholders but the future operations of the company have to be taken into account. That is why the formula there is bound to be different from the 90 per cent plus 10 per cent that obtains on straight surpluses.
My Lords, I emphasise again the distinction I sought to make in my Answer. Where bonuses are paid on surplus funds, the allocation is generally on the basis of 90 per cent to policyholders and 10 per cent to shareholders, a formula that the FSA has recommended. The difficulties occur on reallocation, when shareholders are buying out policyholders. In that context, not just the interests of existing policyholders but the future operations of the company have to be taken into account. That is why the formula there is bound to be different from the 90 per cent plus 10 per cent that obtains on straight surpluses.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Lord Elton
(Conservative)
Type
Oral answers to questions
My Lords, have not successive Governments, including the present Government, said that the reallocation of this money should be in the proportions mentioned by the noble Lord, Lord Joffe? Have the insurers not overprovided with money that was taken from the policyholders? Surely they must have a prior claim.
Subjects
Consumers; Finance; Insurance companies; Insurance; Protection
Date
22 April 2008
Reference
700 c1383
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, there is nothing ever wrong in reminding the FSA of its obligations. That occurs from time to time, in this House as elsewhere, but the FSA is well aware of its responsibilities. At present it is carrying out consultation on whether the costs of compensation for mis-selling claims should be included in the settlement for the shareholders. As the House will appreciate, the Treasury Select Committee in the other place, to which the FSA will be obliged to give evidence, is also looking at these issues.
My Lords, there is nothing ever wrong in reminding the FSA of its obligations. That occurs from time to time, in this House as elsewhere, but the FSA is well aware of its responsibilities. At present it is carrying out consultation on whether the costs of compensation for mis-selling claims should be included in the settlement for the shareholders. As the House will appreciate, the Treasury Select Committee in the other place, to which the FSA will be obliged to give evidence, is also looking at these issues.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Baroness Turner of Camden
(Labour)
Type
Oral answers to questions
My Lords, in view of what my noble friend Lord Joffe has said, could not the FSA be reminded that the purpose of a regulatory framework is to protect the consumer rather than, inevitably, always the insurer? There would be nothing wrong in reminding the FSA of that requirement.
Subjects
Consumers; Finance; Insurance companies; Insurance; Protection
Date
22 April 2008
Reference
700 c1382-3
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, I take solace from the fact that the noble Lord finds these issues difficult and complicated. I emphasise that the FSA is the statutory body concerned with this regulation. It has not had complaints about the distribution of surplus funds. There is no doubt that the issues on reattributions are more complex, but we have a clear framework for the FSA to work within. The policyholders will see the FSA judgment on the allocation that is made and they have the right to vote against the proposals if they find them unacceptable—they can even go to court. We recognise that there are difficulties in this area, but regulation means a regulator independent of government, and that is what the FSA is there for.
My Lords, I take solace from the fact that the noble Lord finds these issues difficult and complicated. I emphasise that the FSA is the statutory body concerned with this regulation. It has not had complaints about the distribution of surplus funds. There is no doubt that the issues on reattributions are more complex, but we have a clear framework for the FSA to work within. The policyholders will see the FSA judgment on the allocation that is made and they have the right to vote against the proposals if they find them unacceptable—they can even go to court. We recognise that there are difficulties in this area, but regulation means a regulator independent of government, and that is what the FSA is there for.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Lord Oakeshott of Seagrove Bay
(Liberal Democrat)
Type
Oral answers to questions
My Lords, I think we all accept that this is very complicated and that there is no single right or wrong answer. I am grateful to the noble Lord for setting out the legal position, if I can put it that way. The Question was really about the steps the Government are taking and what their view is. As and when the FSA gives its ruling, will the Government have a view and get involved or do they just say that it is entirely a matter for the FSA?
Subjects
Consumers; Finance; Insurance companies; Insurance; Protection
Date
22 April 2008
Reference
700 c1383
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, if surpluses accrue in insurance companies, it is expected that they will be distributed. Such surpluses are unlikely to accrue in difficult times and are more likely to do so in more beneficial economic times. Several companies have surpluses at present, which is why my noble friend asked his Question.
My Lords, if surpluses accrue in insurance companies, it is expected that they will be distributed. Such surpluses are unlikely to accrue in difficult times and are more likely to do so in more beneficial economic times. Several companies have surpluses at present, which is why my noble friend asked his Question.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Lord Turnbull
(Crossbench)
Type
Oral answers to questions
My Lords, the Minister will be aware that we face the greatest turmoil in financial markets in many decades and that many banks are being urged to increase their capital. Does he not therefore share my puzzlement—I am a director of a life insurance company with a large inherited estate—that insurance companies are being urged to do precisely the opposite; that is, to distribute more capital than their directors think is prudent in these times?
Subjects
Consumers; Finance; Insurance companies; Insurance; Protection
Date
22 April 2008
Reference
700 c1383-4
Chamber / Committee
House of Lords chamber
House
House of Lords
What steps they are taking to ensure a fair result for policyholders in the current negotiations over the reattribution of the inherited estates of with-profits funds.
What steps they are taking to ensure a fair result for policyholders in the current negotiations over the reattribution of the inherited estates of with-profits funds.
Asked by
Lord Joffe
(Labour)
Answered by
Lord Davies of Oldham
(Labour)
Oral questions - Lead
Status
Answered
For answer on
22 April 2008
Answered on
22 April 2008
My Lords, this is a matter for the independent regulator—the Financial Services Authority—and the courts. The Financial Services Authority sets the rules covering the management of with-profits funds. It requires firms pursuing reattributions to appoint an independent policyholder advocate to represent policyholders in negotiations with the firm. On completion of the negotiations, the FSA will assess the fairness of the deal and make public its conclusion on what fair treatment would require for consumers. Policyholders have a right to vote on the proposal.
Subjects
Consumers; Finance; Insurance companies; Insurance; Protection
Date
22 April 2008
Reference
700 c1382
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, independent regulation of mortgages and credit by the Financial Services Authority and the Office of Fair Trading helps to ensure that borrowers are afforded suitable protections and have appropriate means of redress. The Government are also taking steps to help address debt problems, including by improving financial capability and funding a range of debt advice to help support those experiencing difficulties in repaying their mortgages. The Citizens Advice report will help to inform the Government's thinking on those issues.
My Lords, independent regulation of mortgages and credit by the Financial Services Authority and the Office of Fair Trading helps to ensure that borrowers are afforded suitable protections and have appropriate means of redress. The Government are also taking steps to help address debt problems, including by improving financial capability and funding a range of debt advice to help support those experiencing difficulties in repaying their mortgages. The Citizens Advice report will help to inform the Government's thinking on those issues.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Baroness Noakes
(Conservative)
Type
Oral answers to questions
To ask Her Majesty's Government whether they have made an assessment of the study by the charity Citizens Advice, Set Up to Fail, which suggested that many aspiring home owners have been mis-sold unsuitable and costly home loans that are doomed to fail from the start.
Subjects
Consumers; Protection; Mortgages; Unfair practices
Date
14 January 2008
Reference
697 c1057-8
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, I am grateful for the simple question, and I will give a simple answer: no, we do not think that the regulatory regime is adequate in the two instances to which the noble Baroness has drawn attention. That is why the Financial Services Authority is addressing its regulatory role and why the Office of Fair Trading is taking on board the additional level of scrutiny possible because of the passing of the Consumer Credit Act 2006. There are potential difficulties in this area. The Government are all too well aware of the necessity for help for people who may have these problems.
My Lords, I am grateful for the simple question, and I will give a simple answer: no, we do not think that the regulatory regime is adequate in the two instances to which the noble Baroness has drawn attention. That is why the Financial Services Authority is addressing its regulatory role and why the Office of Fair Trading is taking on board the additional level of scrutiny possible because of the passing of the Consumer Credit Act 2006. There are potential difficulties in this area. The Government are all too well aware of the necessity for help for people who may have these problems.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Baroness Noakes
(Conservative)
Type
Oral answers to questions
My Lords, I thank the Minister for that reply. Let me try an even simpler question: does he think that the current regulatory regime for vulnerable people who borrow from debt consolidators on second mortgages or who are lured into sale and leaseback arrangements is adequate? If so, can he name one reputable financial services organisation or charity that agrees with him?
Subjects
Consumers; Protection; Mortgages; Unfair practices
Date
14 January 2008
Reference
697 c1058
Chamber / Committee
House of Lords chamber
House
House of Lords
My Lords, my noble friend speaks with considerable authority on this area. I have already emphasised that we are all too well aware of the dangers, particularly on sale and rent-back arrangements that can precipitate problems for individuals. We are tightening up the regulatory regime; my noble friend will also be aware that we now have additional powers on, for example, the control of advertising. That is one way in which we can help to control this problem.
My Lords, my noble friend speaks with considerable authority on this area. I have already emphasised that we are all too well aware of the dangers, particularly on sale and rent-back arrangements that can precipitate problems for individuals. We are tightening up the regulatory regime; my noble friend will also be aware that we now have additional powers on, for example, the control of advertising. That is one way in which we can help to control this problem.
Answered by
Lord Davies of Oldham
(Labour)
Asked by
Lord Borrie
(Labour)
Type
Oral answers to questions
My Lords, does my noble friend agree that, in the most serious cases to which this Question refers, loans are being given that are doomed from the start because the individuals to whom they are given have quite inadequate means to pay them back? In those most serious cases, would not the power of deterrence be of great value by the wider use of criminal prosecution, which could have a great meaning across the board if some well-publicised cases were brought?
Subjects
Consumers; Protection; Mortgages; Unfair practices
Date
14 January 2008
Reference
697 c1058-9
Chamber / Committee
House of Lords chamber
House
House of Lords