Chancellor Rachel Reeves is under fire from Treasury committee member Bobby Dean, who has branded her attempts to intervene in the car finance scandal as “disgraceful.” Dean argues that Reeves’s efforts to defend the financial industry against a potential compensation bill send a “really bad message” to consumers, suggesting the government is prepared to protect banks even when they have done wrong.
Reeves’s controversial actions included an unsuccessful attempt to lobby the Supreme Court in January, where she urged judges to avoid a large-scale compensation payout for borrowers. While the Supreme Court’s recent ruling largely favored lenders, helping them avoid a potential £44 billion compensation bill, Dean’s criticism focuses on the government’s underlying stance. He accuses the government of being “too keen to demonstrate it is on the side of business” and failing to adequately protect consumer rights.
The Chancellor’s intervention was a direct result of intensive lobbying from the car loan industry. The Financing and Leasing Association (FLA) had warned the government that upholding a previous Court of Appeal ruling could lead to billions in compensation claims, potentially causing some lenders to fail and restricting credit for consumers. City bosses also warned that the ongoing uncertainty was deterring international investment in the UK.
Dean, however, argues that these concerns do not justify the government’s actions. He cautions that using potential industry damage as a reason to limit consumer redress sets a “really bad precedent.” He maintains that a robust system of consumer protection is essential for building public confidence and ensuring that companies are held accountable for their actions, which is ultimately beneficial for the entire economy.