This document is a formal complaint letter from Alastair Rush to the CEO of the Financial Conduct Authority regarding the FCA's handling of the British Steel Pension Scheme mis-selling scandal. The letter alleges multiple failings by the FCA that allowed the mis-selling to continue and worsen over many years, causing significant financial losses and stress for thousands of steelworkers. It references reports and investigations that are critical of the slow and ineffective response by the FCA, and calls for a response and potential referral to the Financial Regulators Complaints Commissioner. The letter is signed by Alastair Rush on behalf of over 500 steelworkers.

1. Alastair Rush
(By email)
22 January 2023
Mr Nikhil Rathi
The Chief Executive
The Financial Conduct Authority
12 Endeavour Square, London,
England, E20 1JN
Formal complaint about the FCA in respect of its actions and omissions relating to
pension mis-selling from the British Steel Pension Scheme.
Dear Mr Rathi,
I write to you complaining on behalf of (so far) 531 out of a possibly adversely affected
7,834 steelworkers in respect of FCA actions and omissions regarding the British Steel
Pension Scheme scandal. Their names are added at the foot of this letter.
The thrust of my complaint is that due to internal FCA shortcomings, steelworkers have
found themselves needlessly in a protracted and calamitous situation not only not of
their choosing, but one which was avoidable and preventable in the first place. They
have suffered financial loss and stress that no steelworker should have to bear. I
accept that the FCA did not create the scandal of BSPS, but despite having the
opportunity, the capability, and dare I say it, the genuine intent from many individual
employees to help, its corporate behaviour contributed and aggravated the factors
which not only allowed it to happen in the first instance, but then for the impact to
worsen.
While the FCA was meeting with BSPS campaigners as far back as 2017 (“we are in
listening mode”), you knew you were presiding over a process that was already unfit
for purpose and responsible for the emerging carnage. But still you obfuscated and
subordinated the needs of steelworkers to career and corporate self-preservation. You
were not alone in this. The performance and behaviour of FOS and FSCS have been
egregious, they seem to be more concerned with their own interests than they do
steelworker claimants. Both have proved themselves to be the real depressing
surprise of this scandal and I dread to think how many customers away from BSPS
have been similarly duped, mislead, and disadvantaged in retirement.
BSPS is not a one-off issue. These problems with the FCA are not new, we saw them
previously in the banking crisis and we saw them in LCF, Keydata, Blackmore,
Connaught, LIBOR, the Banking Swaps scandal for business owners and many others.
I wish now to refer to remarks within the PA Consulting Services report on Supervision
from July 2016, which was commissioned by the FCA and marked ‘Confidential’ and
only released in a bundle in support of the Gloster Report into LCF. So many of the
characteristic failings that we have accused the FCA of resonate throughout the report.
1. “The lack of a clear decision-making and escalation framework that includes
Executive Directors limits the ability of senior leadership to have confidence that
the right decisions are being made.”
2. “There is no single system of governance that supports the approach to risk
management.”
3. “There are variations in the structures and controls across the sectors and no
single system of governance underpinning the approach to risk management.”

2. 4. “It has been recognised that there is a lack of a decision making framework within
the organisation, and the result of this work is likely to address some of the
findings identified here.”
5. “Although risks are often identified collaboratively the associated sector
Supervision plans and activities are not always generated and executed via a
collaboration across supervisory and non-supervisory teams.”
6. “There is a loss of transparency and confidence at senior levels and with
customers of Supervision (e.g. Enforcement) in the framework as designed.”
7. “There is currently uncertainty on how the governance of flexible supervision
should be implemented and the future of historic forums and escalation channels.”
8. “Collaboration between supervisory teams, including Specialist Supervision, Event
Supervision, Authorisations and non-supervisory teams (Competition,
Enforcement, etc.) has not been mandated in the operational processes to date.”
9. “The current interaction between these teams is a result either of specific sectors
proactively implementing cross-FCA forums, or as a result of personal
relationships.”
10. “The flexibility given to supervision in the governance of the risk management
processes and sector supervision strategy development has given rise to a
situation where limited visibility is provided to the Executive Directors.”
11. “The revised approach to flexible supervision has provided autonomy to the sector
Directors and HoDs. There are no guidelines as to how the governance of sector
planning should be structured or how risks should be presented and escalated to
senior stakeholders.”
12. “There are operational consequences of the different approaches to flexible
supervision across sectors that currently rely on ad-hoc collaboration. Often this
functions as a result of personal relationships between staff and teams, rather than
a robust and consistent governance.”
13. The risks and priorities expressed in the House Views completed to date are seen
by some as being of limited relevance to the derivation of Supervisory sector
plans.”
14. “FCA priorities are not explicitly acted upon or reported against.”
15. “In some areas there is a lack confidence that FCA objectives will be realised.”
16. “The overall objective, linkage of House views, sector planning and ultimately the
link to the supervisory approach needs to be recommunicated and refreshed
across the FCA.”
17. “Flexibility and the lack of defined structures and escalation processes at
Executive Director level has led to a lack of visibility to senior leadership. As a
result, there is at times a lack of confidence in the sector supervision strategy
planning and decision-making.”
18. “There is a lack of knowledge sharing across teams, and a lack of input from non-
sector teams in the planning process.”
19. “Consideration should be given as to how better collaboration between supervisory
teams, and with non-supervisory teams could be promoted.”
20. “Furthermore, the lack of standardised governance processes means that other
teams, both in supervision and across the wider FCA, don't consistently have a
clear view of sector strategy plans or prioritisation.”

3. And finally, and most profoundly (for steelworkers)..
21. “The risks identified lack the requisite detail to inform action planning at a sector
level. For example, Pensions is a stated priority resulting from the House View
process.”
22. “False conclusions could be drawn. Trends apparent in consumer Contact Centre
data are not guaranteed or often not likely to represent trends in underlying market
risks.”
The final point is especially profound because many steelworkers engaged with your
Contact centre to seek clarification, to express their concerns or to report their worries,
and they were either incorrectly reassured and steered directly towards the clutches of
some bad advisers.
Many subsequently responded to appeals to forward their concerns, and they now talk
of their bitterness about how their reports seem to fall into a black hole.
All of the above may explain why, during the late summer of 2017, when the problems
of ‘BSPS’ first become suspected, it was impossible to get a response from the FCA
even when problems were being relayed to it. It was not until Executive Director
Megan Butler was publicly criticised in front of Frank Field MP and the Work and
Pensions Select committee for not even knowing which advisory companies were (at
that time) implicated in ‘BSPS’, that she finally agreed to visit Port Talbot to discover
what was going on. By that time, it was already too late.
Frank Field MP suggested that regulatory action had been too slow, despite
considerable warning signals. He said the FCA ordered one financial adviser, Active
Wealth (UK) Ltd, to cease advising on new pension business but the move was “14
months after it first started digging, and just weeks before the original deadline for
BSPS members to make a decision on their pension”. He added that while Active
Wealth was “already on their radar” the FCA first contacted the firm about pension
scheme in November 2017 – two months after BBC investigators presented it with
evidence they had uncovered. Yet still the FCA failed to act.
Your response was ineffective and counterproductive. “Our work on BSPS is not
finished and we are continuing to take action where we have concerns. We have
written to all pension transfer advisers in the UK to remind them of their responsibilities
and our expectations,” Andrew Bailey stated, and the FCA also issued a joint letter with
TPR and TPAS to around 12,000 BSPS members who are seeking a transfer quote
and those who are in the process of transferring out. Bailey concluded to Field: “As I
have already stated, we wholly reject the Committee’s conclusion, and fundamentally
disagree with the sentiment we may be ‘sleepwalking into another mis-selling scandal.
My letter to you shows we have been carrying out detailed, extensive and robust action
that has been targeting the issues we have seen in BSPS but more broadly across the
entire pensions advice landscape.”
Andrew Bailey later famously, or infamously, fell asleep in a meeting with me as I tried
to convey to him a sense of the unfolding problems. His sentiment was, of course,
hopelessly wrong. We were walking into the greatest pension mis-selling disaster of a
generation. And because of his failings, the mis-selling of these blue collar workers
continued unabated. I heard of one adviser who left one of your advisory roadshows
in Swansea, gleefully exclaiming, “game on boys”, meaning that the supervision was
going to be of such a light touch, that nothing would change. And neither did it. You
either ignored or under-estimated the scale of the problem, despite Henry Tapper
(pension expert), David Neilly (steelworker) and Stefan Zaitschenko (retired
steelworker) offering profound testimony in-front of you to the department of Work and
Pensions Select Committee, about the unrelenting scale and nature of the sausage
and chips sales pitches.
You have claimed that there is nothing unusual about the scandal of BSPS, other than
‘the incidence of cases'. Which is a bit like saying there need not have been financial
intervention in the form of furlough in 2020, because there was nothing whatsoever
unusual about Covid, other than the incidence of cases.

4. Yet it was still not for a further 5 years, in 2022, after investigations by the National
Audit Office and the Public Accounts Committee, did the FCA finally consult regarding
a redress scheme, despite initially and repeatedly saying one was not required. The
scheme itself has deep flaws, and due to many advisers bringing their (permitted of
course) concentrated fire to bear, they are able to argue it should now be discarded
completely, due to the impaired cost effectiveness of such a scheme, based on
compensation being determined by current prevailing economic conditions which are
resulting in very low, or zero sums of compensation being awarded.
Your redress scheme uses a ‘point in time’ methodology to calculate redress, an
irrational methodology because (i) it is not possible to project investment growth and
annuity rates many years into the future with any degree of certainty and (ii) gilt yields
are moving so dramatically at the moment that victims in almost identical
circumstances are receiving wildly different payouts (in stark contrast to them over the
past five years). Second, over 1,000 steelworkers who had received compensation
before the Scheme are excluded from it, and have been denied proper compensation.
Campaigners, including steelworkers such as Rich Caddy and Philippa Hann, and MPs
such as Nick Smith and Steve Kinnock, have offered solutions for five years.
You knew this would happen - the Treasury and the Bank of England was already
warning of a downturn in the economy. You played the long game instead of acting
decisively, believing that the economy would change for the worse, allowing you to say
you facilitated compensation, but compensation so low that steelworkers could only
survey a pyrrhic victory. The British Steel Action Group action in the courts is not even
a reflection of those advisers, who have the right of course to present their case on its
own merits as they see fit. But the injustice bites deep. And it is an injustice which
has been allowed to happen on your watch since you took over from Andrew Bailey.
The FCA was then investigated by the the National Audit Office and the Public
Accounts Committee. To bring to this letter a flavour of their findings, you did did not
argue with the latter when it concluded;
1: The regulatory system left British Steel Pension Scheme members open to being
manipulated and taken advantage of by unscrupulous financial advisers who
personally profited from giving bad advice.
2: The Financial Conduct Authority has consistently been behind the curve in
responding to the catastrophic impact on British Steel Pension Scheme members.
2: The Financial Conduct Authority should examine what can be done to improve the
data and insight that they need to inform a more proactive approach to regulation.
3: The Financial Conduct Authority has not been sufficiently proactive or timely in using
its enforcement powers.
4: The way that compensation has been provided in the British Steel Pension Scheme
case has been slow and unfair.
And it is that sloth-like and tardy response which has created the harm, and distilled
within many a sense of betrayal that is contrary to the very reasons that FCA, FSCS
and FOS exist.
Increasingly (since 2017), stories of depression, anxiety and worry in steel working
communities are prevalent. Many steelworkers talk of illness and stress they believe
to have been bought on by FCA handling of this matter. Many are desperately worried
about their ability to retire. Many have not informed their wives, many have turned a
blind eye to it, many have succumbed to helplessness or inertia and many have died
without justice. It is unsurprising. This scandal has lasted as long as World War Two.
Men already vulnerable due to age, financial capability or impaired mental, physical or
medical health as a consequence of working decades of hard shifts in a chemical,
dusty and carcinogenic heavy engineering environment, have had human rights
disregarded.

5. The repeated failings of the FCA go way beyond inadvertent, understandable and
forgivable shortcomings. Repeated mistakes, delays and multiple examples of bad
leadership have resulted in far worse stress and financial loss for thousands of
families. We do not know to what degree these men and women will have their
retirements impaired and endangered by the actions and omissions of the FCA on top
of the bad advisers who they trusted. But that steelworkers have lost money is beyond
doubt and that they have suffered stress and inconvenience is beyond doubt. But if
the FCA had dealt with this properly in 2017/2018 when asked, instead of finally
agreeing in 2022 after a delay of five years, the losses experienced would be far less.
The few bad actors have acted as catastrophically destructive Force Multipliers not just
on steelworkers, but also the wives and husbands who sustained them for decades
and who gave up their own jobs and the opportunity to save for retirements in their
own names, their local communities who may now have to sustain them in old age if
they run out of money, and the local businesses which may have benefited from the
income from these pensioners who took their grandchildren out for an ice cream or a
treat. You are financial professionals and financially literate, you will not suffer the
same assault on your pension as did those men who looked to you, over the horizon,
for help. Steel working communities across England and Wales, and Scotland, will be
paying for your oversights, failings and omissions for decades to come.
Given that the nature of the errors are systemic, given that they were avoidable, and
given that the impact is so catastrophic, I would be grateful if you would respond so
that I may then refer the matter to the Financial Regulators Complaints Commissioner.
I will be advocating the creation of a BSPS Compensation Fund with the assistance of
the Treasury, to ensure these men and women are not left out of pocket and to reflect
the levels of stress they have endured.
Yours faithfully,
Al Rush, and on behalf of;
Mike Aaron Philip Goodyear Mark Nicholson
Will Able. Chris Goulding Mark Nicolson
Mark Abramo Ian Gray Desmond O'Brian
Mark Adam Ricky Green Wayne Oliver
Michael Adams Richie Green. Glen Owen
Mike Adams. Adrian Gregory Jeremy Owen
Graham, Alexander Tyrone Grey Mark Palmer.
Kevin Allan Stephen Gri
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