Lawyers from national law firm Clarke Willmott LLP, representing steelworkers caught up in the British Steel pension transfer scandal, have urged the Financial Services Compensation Scheme (FSCS) to raise the amount of compensation they receive at a committee hearing in Westminster.

Clarke Willmott partner Philippa Hann told the hearing the scheme did have discretion and could change the discount rate. She also pressed the FCA to tighten professional indemnity insurance rules so IFAs had adequate cover to meet claims.

But FSCS chief executive Caroline Rainbird said fund would be holding firm with its current pay-out rules, but promised to ‘go away and reflect on what we’ve heard’ and to ‘take some very real steps to change what is a situation which absolutely must change’.

Meanwhile, Caroline Wayman, chief executive of the Financial Ombudsman Services (FOS) which provides an independent view on the financial service problems that people bring to it, offered her support and said the service stood ‘ready to help’.

Al Rush, Director of Echelon Wealthcare and the adviser who blew the whistle on the BSPS scandal told the Financial Conduct Authority:

“The time for the regulator to be in listening mode is over, there has to be a conversation between us in which we agree what action must be taken.”

Philippa, who has met 450 steelworkers and seen their files over the past two years, said:

“I was pleased to hear that the FOS will be looking at calculating the compensation for the steelworkers on a different basis to that of the FCA guidance.

“In our opinion, the FCA guidance leaves people under-compensated. I was disappointed that the FCA weren’t able to engage with us on whether or not they needed further powers to take the rogues out of the industry, and they are clearly struggling to take action quickly enough.

“But I was very pleased they are clearly aware of the issues there are within the industry around the inadequacy of the insurance provision. I very much hope they will continue to have that conversation and take some very real steps to change what is a situation which absolutely must change.”

Philippa said the opportunity to meet with MPs, including Stephen Kinnock and Nick Smith, more than 60 steelworkers, regulators and representatives of steelworkers attended the roundtable, had been ‘an absolute privilege.’

“To sit in a room and listen to the real effect on the lives of the steelworkers was very sobering. They spoke with dignity and passion. These people deserve to be protected and compensated properly and that is what we will fight for.

“But what we’ve ended up with is a real tragedy and a scandal which needs to be sorted. We’ve had a real opportunity today to make a difference to the people who have been affected and to make a difference for the future.

“This isn’t the first time we’ve had a scandal within the financial services industry. We have to take the learnings, we have to work together, we have to ensure these people are properly and quickly compensated. Our job is to fight for people who cannot fight for themselves and that is what we will continue to do.”

The scandal came about after members of the British Steel Pension Scheme were asked to decide what to do with their pensions as part of a restructuring process in 2017. Around 8,000 members transferred out of the old scheme, with transfers collectively worth about £2.8bn.

Clarke Willmott represents hundreds of British Steel workers in Port Talbot, Scunthorpe and Teesside, claiming compensation to try to rebuild their retirement savings.

Among them, Port Talbot steelworker Malcolm Sibthorpe:

“They created this by allowing Tata to walk away from their liabilities in the first place, and if they hadn’t, I wouldn’t have been put in this position to look for my pension. I’m hoping they can redress it all and bring me back to where I was.”

The Financial Conduct Authority, Financial Services Compensation Scheme, Financial Ombudsman Service, The Pensions Regulator and Pensions Ombudsman were all present at the roundtable.