On the afternoon of Monday 15 June, the APPG on Investment Fraud and Fairer Financial Services that I Chair hosted a timely and well-attended summit in Parliament, bringing together Parliamentarians, policymakers, consumer advocates, regulators, industry leaders and campaigners to discuss the importance of financial services consumer protection.
The summit was entitled “Protecting Consumer Protections for the sake of Society and the City” and it succeeded in its central aim of galvanising support for the idea that Parliament must help ensure that financial services consumer protections are not weakened as a consequence of the Government’s appetite for deregulation in its quest for economic growth.
In particular, many speakers shared their concerns that the Financial Services and Markets Bill, which is currently in the Lords must not lead to consumer detriment.
A sample of the comments made by some of the speakers will provide readers with a feel for what was discussed, the importance of the summit and why it was so timely given the risk to consumer protections that the Bill represents:
Susan Murray, MP for Mid-Dunbartonshire:
“Today we are talking about the Financial Services and Markets Bill and concentrating on the proposed reforms to the Consumer Credit Act. The original purpose of the Consumer Credit Act 1974 was to establish a comprehensive code to protect borrowers, mandate transparent lending practices and introduce a licensing system for credit providers that set out what they could and couldn’t do when lending. The Act was necessary because loan sharks were using highly egregious lending practices that were ruining people’s lives.
While the government presents the current Consumer Credit Act reform proposals as a modernisation exercise, I am concerned that some of the changes would actually weaken, not strengthen long-established consumer protection that has existed since the 1970s; protections that have proven to be quite effective.
I am not alone in believing that the proposed reforms of the CCA have the potential to be one of the most damaging deregulatory projects underway…”
Neil Duncan-Jordan, MP for Poole:
“I recently spoke in a Westminster Hall Debate about my constituents, James and Becky Glanville on the issue of Hidden Credit Liabilities and the Role of the Financial Conduct Authority.
The Glanvilles built a successful, family-run nursing home business. It was destroyed by undisclosed risks embedded in complex financial products sold by NatWest – part of RBS. They were never told that interest rate swaps carried significant liabilities that would be treated as secured debt, that would erode their borrowing capacity, and trigger covenant breaches as interest rates fell.
The hidden exposures escalated, pushing their companies into restructuring and insolvency. Despite clear regulatory requirements for transparency and informed consent, those risks were never disclosed. What followed – asset devaluation and agreements that allowed the bank to profit from the family’s losses, compounded the damage further.
And then the regulatory framework let them down too. The FSA/FCA’s redress scheme excluded the hidden credit lines from its review, denying victims like the Glanvilles fair compensation. Worse, all the banks had signed undertakings to comply with the regulator’s rules – but the FSA and FCA agreed separate sales standards with those banks that specifically excluded hidden credit liability.
The regulator effectively colluded with the banks to suppress this fraud and reduce compensation costs.
But the Glanville case is not isolated. It reflects a wider systemic failure affecting thousands of SMEs – and it underscores the urgent need for a full independent investigation and a fair, comprehensive redress scheme.
These families and businesses deserve accountability, transparency, and justice.
Which brings me to my final point:
There is a new Financial Services and Markets Bill working its way through Parliament. I’m pleased that many Peers spoke out in the Lords last week about the real risk that hard-earned consumer protections could be eroded.
The Bill’s stated aim is to introduce deregulation to stimulate growth. But there are serious questions to be asked, such as:
● Who determines the rights of consumers?
● Who determines the obligations of firms?
● Who determines the balance between commercial freedom and public protection?
● And who answers when that balance proves inadequate?
These questions go to the heart of parliamentary democracy.
You will know that the more authority Parliament delegates to the FCA, the more essential it becomes to preserve democratic accountability. Consumer protections established by Parliament carry democratic legitimacy and permanence.
But protections that depend on regulatory discretion can be altered without the same degree of parliamentary scrutiny.
That distinction matters enormously – particularly when the rights of ordinary citizens are at stake, and particularly when there is good reason to question the FCA’s judgment and priorities.
That’s why when the Bill reaches the Commons, I’ll be doing what I can to defend transparency, accountability and justice – and to seek justice for the Glanvilles and the many others that have been let down by the system.”
Wera Hobhouse, MP for Bath:
“I want to speak today about a paradox that I believe sits at the very heart of this Government’s approach to financial services; a paradox that is highly relevant to the current Financial Services and Markets Bill.
We are told that lighter-touch regulation will unleash growth. That stripping back compliance burdens will free firms to innovate, compete, and draw more people into saving and investing. On the surface, the logic has a certain appeal. Rules have costs. Compliance departments absorb resources. Friction, we are told, is the enemy of dynamism. But this argument rests on a flawed assumption – that trust in financial services is a fixed background condition, something that will simply persist regardless of how consumers are treated. It is not. Trust is fragile, historically abused, and extraordinarily hard to rebuild once lost. And trust, properly understood, is the single most important precondition for the sector’s growth.
Financial products are not like cars. When you buy a car, you can inspect it, test drive it, have a mechanic look it over. When you buy a pension, you are making a decades-long commitment to an institution, based on complex products, mediated by advice you may not be equipped to properly evaluate. The information asymmetry is vast. Consumer protection regulation in financial services does not merely protect individuals from individual bad actors. It performs a systemic function: it maintains the very conditions under which the entire market can operate. Consumer protection is the infrastructure on which trust is built.
Only trustworthiness can provide the foundation of fairness that gives us all confidence in our financial sector; an ecosystem that represents around 10% of GDP and is our greatest export.
The mechanism by which weakened protections undermine growth rather than advancing it runs through three channels:
– First, direct harm – more consumers sold unsuitable products, more money lost, more redress denied.
– Second, scandal – which follows harm with reliable inevitability, often after years of invisible accumulation, and which when it breaks, damages not just the firms involved but the sector as a whole.
– And third, withdrawal – the quiet, rational decision by millions of people not to participate in a system they no longer trust.
That disengagement has macroeconomic consequences that dwarf any short-term gain from reduced compliance costs. The retail investment market, under-saving for retirement – these are growth priorities that depend entirely on persuading people who currently do nothing to engage with financial products. That persuasion is impossible in an environment where trust is continuing to erode.
The irony is almost unbearable. The sector lobbies for deregulation in order to grow. Deregulation weakens the protections that prevent harm. Harm generates scandal. Scandal destroys trust. Distrust suppresses participation. And the sector ends up smaller than it would have been.
If the Government genuinely believes there are no provisions in the current Financial Services and Markets Bill that are intended to weaken consumer protections, then I would expect it to be entirely receptive to amendments that close any gaps and prevent unintended consequences. If it is not receptive, that will tell us something important.”
Lord Sikka, Emeritus Professor of Accounting at the Universities of Essex and Sheffield
“The Financial Services and Markets Bill now weakens the role of the Financial Ombudsman Service to secure redress for complainants and imposes a ten-year limit within which complainants can secure redress. Compliance with rules rather than whether companies acted reasonably and fairly is the proposed rule.
The above is a brief indication of the capture of the UK state by the finance industry and its consequences. The economy has been devoured. Low wages and tax abuse have been normalised. Town centres have become economic deserts. Wealth extraction is prioritised. Unprecedented resources are devoted to financial engineering and tax abuse. The UK has over 405,000 professionally qualified accountants, the highest per capita in the world and more than the rest of Europe combined. Inevitably, other sectors are denied graduate talent.
Appeasement of the finance industry hasn’t delivered the promised investment in productive assets. For the last 30 years, the UK has languished at or near the bottom of the G7 and OECD league of investment. When the financial bubble bursts, large tracts of the economy will be washed away and there won’t be enough money to bailout the infected sectors.”
And I made some relevant comments as well:
John McDonnell, MP for Hayes and Harlington and Chair of the APPG, who led the summit:
“I want to speak about a serious concern shared by many APPG members: that Parliament is at risk of losing its grip on financial services regulation by ceding too much power to the Financial Conduct Authority without adequate accountability, and that this is likely to be to the detriment of both the City and the citizen.”
“One of the most persistent myths in current policy debate is that robust consumer protection is somehow the enemy of a thriving financial sector. The evidence points in exactly the opposite direction. Strong consumer protections are not anti-growth. They are pro-City, pro-market, and pro-trust. And without trust, nothing in finance works. The APPG has been making that case – patiently, persistently, in an evidence-based way, and across party lines, for years. Parliament has a duty – not merely a political interest, but a constitutional duty – to ensure the financial regulatory framework it created is actually working for the people it was designed to protect.”
“…the picture that has emerged from our work is deeply troubling. At its heart is a growing trust deficit – a systematic erosion of public confidence flowing directly from a regulatory culture that has too often sided with the powerful rather than the people. The FCA’s own Financial Lives survey [see here from page 90] tells us that fewer than half the public trust the financial sector and its regulators. That is not a niche complaint. That is a statement of systemic failure.”
“The Financial Services and Markets Bill, which had its Second Reading in the Lords last week, represents a real and present threat to hard-won consumer rights. The Hansard record shows a clear tension between those Peers who want to defend consumer rights and those who prioritise deregulation – hoping that unleashing the City’s ‘animal spirits’ will deliver growth, even at greater risk to consumers. I believe that approach will backfire. When consumers are harmed by financial scandal their behaviour changes: they become more cautious about saving, investing and insuring. Once bitten, twice shy – and all the empirical evidence supports that.”
In addition to commentary about the Financial Services and Markets Bill by Parliamentarians, other participants spoke about adjacent issues:
Michael Furse, Company Director at Maunby Investment Management:
In his address, Michael Furse critiqued the Investment Banks Special Administration Regime, arguing it routinely fails to return client assets quickly after a firm collapses, despite the statutory objective to do that. Recent experience of the special administration of WealthTek highlighted structural flaws, including administrators lacking any wealth-management expertise, prolonged delays, and misaligned financial incentives that drain client funds. Contrasting this with the Solicitors Regulation Authority’s model – which uses specialised legal teams to triage clients and return assets in full – Furse urged a major overhaul. He proposed decoupling client asset returns from insolvency, deploying experienced management ASAP, reliance on firm records whenever possible, and amending IBSAR to put customers first.
James Sherwin-Smith, the first Member Nominated Candidate for Election to the Board of Nationwide Building Society in over 20 years:
Sherwin-Smith raised critical questions about member democracy and regulatory oversight in the UK mutual sector. Highlighting his historic candidacy, he shared Nav Mishra MP’s concerns regarding building society governance issues, namely: “Quick vote” mechanisms, virtual-only AGMs, the lack of binding votes on executive pay, and the paucity of Member Nominated Directors on building society boards.
With the government aiming to double the mutual sector’s size, Sherwin-Smith argued that growth must be accompanied by robust member rights. He urged Parliament and the Financial Conduct Authority to immediately review outdated frameworks, ensuring large mutuals remain genuinely member-owned, member-governed and accountable.
Iain Ramsay, Emeritus Professor, Kent Law School, University of Kent:
Professor Iain Ramsay warned that proposed reforms in FSMA 2026 risk “neutralising” the Financial Ombudsman Service (FOS). Driven by industry lobbying and government deregulation, he explained that the changes restrict the FOS’s “fair and reasonable” jurisdiction, forcing alignment strictly with Financial Conduct Authority rules while removing considerations of “good industry practice”.
Ramsay argued these reforms – such as requiring FCA opinions on ambiguous rules – increase legal complexity and subordinate the FOS to the FCA and Treasury. Ultimately, this shifts the FOS from an accessible, informal dispute body into a heavily legalistic framework favouring repeat industry players over consumers.
Gemma Hoskins, Climate Director, Mighty Earth
Gemma explained how Barclays allegedly profited $1.7 billion by financing JBS, a meat giant tied to mass deforestation and corruption. Hoskins highlighted Mighty Earth’s October 2025 FCA complaint accusing Barclays of greenwashing and sustainable finance fraud for underwriting $3 billion in JBS Sustainability Linked Bonds.
Critiquing the UK’s legal framework and the FCA’s “slow, opaque, and unaccountable” eight-month response delay, Hoskins warned that regulators are prioritizing bank confidentiality over accountability. She urged Parliament to mandate stricter bank due diligence, closing loopholes that permit the financing of environmental crimes, including the urgent delivery of HM Treasury’s assessment of deforestation financing, mandated in 2023.
Simon Bishop, Partner, Hausfeld:
Simon highlighted the need for reform in the access to justice space, referencing three shifts that have the potential to transform the UK legal landscape. First, the Civil Justice Council’s landmark Final Report which concluded that third-party litigation funding is essential for access to justice, but urgently requires statutory oversight to replace the inadequate voluntary self-regulatory system. Second, the UK’s powerful opt-out collective regime – managed by the Competition Appeal Tribunal – automatically includes affected individuals in class actions unless they explicitly choose to opt out. Finally, the Law Commission, which is evaluating a dedicated consumer class actions regime for England and Wales, aiming to strengthen consumer rights enforcement, expand access to redress, and ensure fair damages distribution.
Richard Emery, Bank Fraud Investigator, 4Keys International and APPG Secretariat Member:
Richard Emery warned that Section 8 of the Financial Services and Markets Bill threatens the Financial Ombudsman Service’s core “fair and reasonable” mandate. FOS would be required to find that a firm’s actions were “fair and reasonable” unless it had breached a relevant FCA Rule, even if this resulted in a fundamentally unjust outcome.
Emery contrasted an historic “F&R” outcome for an orphan with a future risk: victims of long-term investment frauds, who cannot know they have been victims within the strict 13-month reporting limit, would lose the protection of the FPS Reimbursement Requirement. He urged Parliament to reject Section 8 and preserve this important consumer protection.
James Miller, Managing Partner, Miller Shah LLP:
Mr Miller announced Miller Shah LLP’s expansion into the United Kingdom via a strategic joint venture. Highlighting a transatlantic approach to accountability, Miller emphasised that the firm’s litigation model will work to combat systemic financial misconduct, investment fraud, and pension mismanagement without the divided loyalties of defence firms.
The new entity, currently seeking authorization from the Solicitors Regulation Authority, has established its initial regional hub in Chester, with active plans to open a London office. Miller concluded by framing the venture as a direct commitment to bridging cross-border regulatory gaps and protecting consumers.
It has to be said that, taking all the comments from all the speakers at the Summit, it is clear that there are widespread concerns about the direction of travel of many aspects of our financial services sector in general, and the new Financial Services and Markets Bill in particular.
I was struck by Andy Burnham MP’s reference to not just ‘growth’ but ‘good growth in every postcode’ in his important Monday 29 June speech. I don’t know precisely why he referenced ‘good growth’ as opposed to just ‘growth’ but if it is because he is thinking that what our country needs is growth that is sustainable, healthy and is not achieved through taking away consumer protections – which is irrefutably what the Bill as drafted does – then I’m sure he will find many Parliamentarians, including myself, highly supportive of that subtle but important distinction.
And we can only hope that whichever individuals get appointed as our next Chancellor and City Minister get the significance of that subtle but important distinction too.
I’ll close by inviting any MP who wants to ensure the new Bill delivers good growth to work with the APPG when the Bill gets to the Commons.
We are seeking cross-party unity in protecting the interests of all of our constituents; not just for the public good but also to bolster the economic success of our country through delivering a trustworthy and effectively regulated financial sector – one we can all be proud of.
