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Healey rallies behind financial services bill despite opposition
John Healey has backed a government bill to reshape financial services regulation, saying it would set clear standards for consumers. The legislation is part of the government’s post-Brexit programme to give the UK more control over financial rules and is intended to help the City use that regulatory freedom.
The bill would limit Financial Ombudsman Service complaints to 10 years and require the ombudsman to presume a firm acted fairly if it followed the regulator’s rules. Ambiguous cases would go to the Financial Conduct Authority. Consumer groups including Which? and Fairer Finance warn the changes could restrict access to free, independent redress; Treasury committee chair Meg Hillier said they may shift the balance towards firms. The bill would also let regulators update consumer loan rules and allow overseas firms to operate when their home regulations achieve similar outcomes.
In short
- Healey backs changes to financial services rules.
- Ombudsman complaints would be limited to 10 years.
- Consumer groups warn access to redress could narrow.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Supporters argue that clearer, more consistent standards could give financial firms and consumers greater certainty, while helping regulators adapt rules as lending and markets change. They see post-Brexit flexibility, including recognition of comparable overseas regimes, as a way to keep the UK financial sector competitive; setting time limits and directing ambiguous cases to the FCA could also make complaint handling more predictable.
The case against
Critics argue that a 10-year limit and a presumption of fairness when firms have followed regulatory rules could make it harder for consumers to obtain redress, especially where harm emerges late or the rules prove inadequate. They say shifting ambiguous cases to the FCA risks weakening access to free, independent adjudication and tilting the balance towards firms, while broader regulatory flexibility may bring uncertainty about how consumers will be protected.
Explained simply
The Financial Ombudsman Service is a free, independent body that helps resolve disputes between consumers and financial firms, such as banks and insurers. It can consider complaints when a customer and a firm cannot settle a problem themselves.
Since Brexit, the UK has been reviewing rules previously shaped by the European Union, with the aim of giving domestic regulators more control. The Financial Conduct Authority and the Treasury are central to setting and overseeing many of these rules, which affect both financial firms and their customers.
Changes to how complaints are handled could affect consumers’ ability to challenge firms and the way disputes are decided. The rules also matter to financial businesses in the UK and overseas, which need to know what standards apply when they offer services to UK customers.