Car Finance Scandal: Chancellor’s Actions Branded ‘Disgraceful’ by MP

The Chancellor, Rachel Reeves, is facing intense scrutiny over her “disgraceful” attempts to influence a Supreme Court case regarding the car finance scandal. Bobby Dean, a Liberal Democrat MP and member of the Treasury committee, made the comments, arguing that the government’s intervention demonstrated a clear and concerning bias toward the financial industry. Dean’s criticism centers on the government’s efforts to defend banks from a potential compensation bill, rather than siding with wronged consumers.
Reeves’s controversial actions included an unsuccessful bid to intervene in the Supreme Court hearing in January, where she reportedly urged judges to avoid awarding large “windfall” compensation payments to borrowers. While the court ultimately sided with lenders, sparing them from a potential £44 billion payout, Dean’s condemnation is directed at the principle behind the Chancellor’s actions, which he views as a betrayal of public trust.
The government’s intervention was prompted by intense lobbying from the car finance industry, which had warned of dire consequences if the Supreme Court upheld a previous Court of Appeal ruling. The Financing and Leasing Association (FLA) claimed a massive compensation bill could destabilize some lenders and make credit less accessible for consumers. City executives also warned the Treasury that the ongoing uncertainty was harming the UK’s economic reputation and deterring investment.
However, Dean has dismissed these arguments as insufficient justification for government interference. He cautions that using the potential for industry damage to undermine consumer redress sets a “really bad precedent.” He asserts that a functioning market requires strong consumer protection, and that without it, consumers’ confidence to borrow and invest is eroded. He believes the government’s role should be to ensure companies “play by the rules” in the first place, rather than to protect them when they fail to do so.