Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill — Clause 1 — Report on Compensation Payments to Customers of London Capital & Finance PLC — 22 Sep 2021 at 14:45
The majority of MPs voted not to require a report on the impact of the payment of compensation to the customers of London Capital & Finance PLC and also covering some wider related considerations.
MPs were considering the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill.[1][2][3]
The Bill provided for publicly funded compensation for:
- investors in London Capital & Finance PLC's "minibonds" (following the firm going into administration in January 2019).
- occupational pension schemes whose assets have been reduced as a consequence of an offence involving dishonesty and where the scheme employer is insolvent and unable to make good the shortfall.
The amendment rejected in this vote was:
- page 1, line 18, at end insert—
- “(5) Within six months of this Act coming into force, the Secretary of State must lay before Parliament a report that assesses the impact of the payment of compensation to the customers of London Capital & Finance plc under this section, and in the light of that assessment, sets out the following—
- (a) an assessment of the regulatory failures that gave rise to the need to compensate the customers of London Capital & Finance plc;
- (b) measures the Government is taking to prevent such regulatory failures in the future;
- (c) the reasons why the Government is providing compensation to the customers of London Capital & Finance plc but not the customers of other failed investment firms;
- (d) criteria for when the Government should be expected to provide compensation following the collapse of investment firms; and
- (e) the reasons for the capping of compensation payments under this section at 80% of what customers of London Capital & Finance would have been entitled to under the Financial Services Compensation Scheme.”
The rejected amendment was accompanied by the following explanatory statement from its proposer:
- This amendment would require the Secretary of State to lay a report before Parliament that assesses the impact of the Government compensating the customers of London Capital & Finance plc, as well as broader issues relevant to the mis-selling scandal.
The rejected amendment would have added an additional subclause to clause one of the Bill.
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- [1] Parliament's webpage on the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill , Parliament.uk
- [2] Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill, as introduced 12 May 2021, Parliament.uk
- [3] Explanatory notes to the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill, as introduced 12 May 2021, Parliament.uk
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