British Steel  

MPs to call for review of FCA action over British Steel

MPs to call for review of FCA action over British Steel
 Photo: Reuters/Fotoware

MPs supporting the victims of the British Steel Pension Scheme debacle are expected to tell the Financial Conduct Authority's chief executive they will call for an independent review into how the regulator has handled the scandal.

Nick Smith, MP for Blaenau Gwent, and Stephen Kinnock, MP for Aberavon, together with campaigners such as financial adviser Al Rush, principal of Echelon Wealthcare, are writing to Nikhil Rathi at the FCA.

The letter, which FTAdviser understands may be sent as soon as today (March 19), is expected to express the signatories' concerns over how little progress appears to have been made in addressing the debacle.

In addition to the signatories' wider work with the FCA and within parliament, the MPs are expected to call for an independent review of the FCA's role in the BSPS scandal, particularly relating to enforcement, as well as how the regulator and compensatory bodies have dealt with the victims.

Campaigners are concerned the FCA's delays will hamper their bid to take legal action, due to the statute of limitation, and reduce the amount of compensation available as more and more advice firms involved in the debacle fall into administration or default with the Financial Services Compensation Scheme.

Rush, who is helping many former BSPS members and their families, told FTAdviser of the serious concern he has over the length of time the whole process of compensation and enforcement has been taking. He also spoke of the need for better communication.

He said: "It's hard to believe now, but this all started back in 2017 and the statute of limitations is already running out quickly.

"For more than three years now I have requested a structured, sustained and meaningful 'boots-on-the-ground' approach, whereby the regulator and the compensators can embed themselves within these communities, to talk to these affected people on their terms and in a manner they are comfortable with.

"These men and women [...] simply want to sit down face-to-face with someone they trust, and find out whether the advice [they received] was any good. Why is it so difficult?"

It is understood the signatories have also asked Rathi to detail what recommended legal changes the City watchdog has presented to the government in the wake of the debacle.

Smith and Kinnock have previously spoken to FTAdviser about their concerns over the length of time it is taking for compensation to be paid out and for enforcement action. 

Smith said: “It is clear to me criminal action has occurred. I am frustrated with the FCA’s slow movement."

BSPS members were asked to decide by December 2017 whether to move their defined benefit pension to a new plan, BSPS2, or stay in the existing fund, which was then moved to the PPF as part of a restructuring of pension liabilities.

As a result about 8,000 members transferred out of the old scheme, with transfers collectively worth about £2.8bn.