Labour government seemingly interferes with car finance compensation claims.

Chancellor Rachel Reeves has moved to intervene in a supreme court hearing regarding mis-sold car finance. She aims to cap the compensation offered to victims of the finance agreement commission scandal. This comes after significant pressure was applied to the chancellor by finance giants when predictions said they could payout up to £30 billion in compensation.

The news of potentially capped compensation pay outs has seen share prices rise for the key lenders in the scandal. The increase in share prices would indicate an increase of confidence in these companies which appears to be the government's intention. The treasury suggested that the claims could harm the industry and make securing car finance loans more challenging and costly.

It also warned it could, "generate a perception that regulation in the UK is uncertain."

Our Head of Collective Actions and Chief Operating Officer, Elizabeth Comley, comments:

"While we recognise the importance of maintaining confidence in British lenders, this cannot come at the expense of justice for the individuals affected."

"Consumers deserve accountability and redress when they have been wronged, and Rachel Reeves’ attempts to shield lenders from the consequences of their actions risk undermining public trust in the financial sector as a whole."

Chancellor Rachel Reeves has been under pressure from lobby groups and finance lenders who claim the large payout for compensation could disrupt the motor finance market. While denying that the Labour government is working against consumer interests, the chancellor said, “There is nothing pro-consumer about making it harder for people to buy an affordable car for their family. That would be bad for working families.”