I congratulate my hon. Friend the Member for Gower (Tonia Antoniazzi) on introducing this debate. May I say how great it has been to acknowledge the contribution of our friend, Paul Flynn? Every week when I go through Newport train station, I remember his dry wit and his friendship. We will miss him greatly.
A year and a half ago, steelworkers from across south Wales were hit by a pensions storm. They had a hard deadline to decide on their futures against a backdrop of serious uncertainty for their industry. Then they were aggressively targeted by financial advisers, and about 8,000 of them ended up transferring out of their pension scheme altogether. While the full scale of the problem is not entirely clear, it looks set to be as bad as many feared. We know that 872 of the steelworkers were advised by firms who were stopped from advising by the Financial Conduct Authority. Now there are real concerns that the final number might be even greater. Since then, the FCA has reviewed the files of 2% of the steelworkers who transferred out. It found that 58% of this advice was not suitable. That could mean that thousands of steelworkers were affected.
This is a very serious situation, and it requires a strong and co-ordinated response with much more granular analysis of what occurred. That response should focus on four specific areas. First, steelworkers who transferred out need to make sure that the advice given was appropriate. There are advisers and solicitors who are supporting steelworkers, working on an independent initiative to help them. I encourage steelworkers who transferred out to get in touch when that has been set up. Secondly, if the number of people affected is as high as we all fear, there needs to be pressure to make sure that the industry insurers fully honour their obligations.
Thirdly, arrangements for compensation need to be looked it. The financial services compensation scheme has reviewed earlier claims and increased the compensation in some cases, and that is positive. However, we also need to look at the rate that is used to calculate this compensation, because that has a big impact on steelworkers and their families. It needs to be as generous as possible so that the steelworkers are not disadvantaged when making claims. Finally, rogue advisers who prey on steelworkers have to face serious consequences. This should include permanent restrictions, financial penalties, and, when necessary, referral to the police for criminal investigation.
The crisis that saw many steelworkers see their hard-earned money put at risk should not have happened. On this St David’s Day, we need to work together and sort things out for them.
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