Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make an estimate of the cost to the public purse of liabilities as a result of the liquidation of Lamp Insurance Company Limited being covered by the Financial Services Compensation Scheme.

HM Treasury does not routinely provide estimates relating to Financial Services Compensation Scheme (FSCS) costs in relation to individual cases.

The FSCS is funded by the financial services industry and is operationally independent of government. Firms that are authorised by the Financial Conduct Authority and the Prudential Regulation Authority pay an annual levy to fund FSCS compensation and management expenses. Some of the funding also comes through recoveries from the estates of failed firms and any third parties that might be liable for, or connected to, the compensation claim. This can reduce the cost of the levy to the wider industry. The FSCS also has in place a revolving credit facility with a consortium of private lenders from which it can drawdown at short notice.

In the unlikely event the FSCS exhausts its available resources, it may request a loan from the National Loans Fund. This means public funds are only used to fund FSCS compensation in a very limited set of special circumstances.