Labour Euro MPs warn ConDem Government not to undermine UK RDR miss-selling ban - 2012-10-26
Following a key vote in the European Parliament today, Labour Euro MPs, led by Vice Chair of the Economic & Monetary Affairs Committee Arlene McCarthy, have warned former investment banker Conservative MPs not to try and undermine the UK's strong investor protection.
Arlene tabled an amendment to today's vote for a full EU-wide ban on the use of commissions and inducements for investment advice. The amendment failed to gain a majority with the right and liberals voting against it.
On investor protection Arlene said:
“It is a blow to consumer protection that the European Parliament has failed to back my amendment for a full EU-wide ban on the use of commissions and inducements for investment advice. I warn the Tory investment bankers turned Conservative MPs not to use the lack of an EU ban as an excuse to revoke the Labour Government's ban.”
"At a time of financial crisis and recession consumers and investors need to be protected. It would be cynical if the Conservatives were to use the loophole in EU law to undermine the high level of protection we have secured for the UK consumer in the sale of retail investment products.
"Across Europe consumers have been victims of miss-selling of investment advice because of an inducement system which creates a bias towards products paying the highest level of commission and away from the best interests of the investor. As a result of miss-selling nearly 1.7 million consumers have received compensation of £11.8 billion and are estimated to have lost a lot more.
"Disclosure and transparency does not work and the evidence is clear that consumers do not trust the independence of the advice if inducements are paid to push a product. A ban is the only way to remove this conflict of interest and give strong protection to the investor."
On commodity speculation Arlene said:
"I am disappointed that the Parliament including British Conservative MEPs did not back amendments to close loopholes in the law and toughen up position limits on excessive speculation on commodities."
"It is wrong that we have a situation where food aid is paid to bankers and traders while the world's poorest are trapped in hunger and poverty."
"Today’s vote is a blow to our campaign but we will continue to work with the World Development Movement and other NGOs to try and get Member States in their negotiations to close the loopholes in the text."