Conservative big-hitter David Davis MP has given a cautious welcome to the Financial Services Authority's (FSA's) Arch Cru redress scheme, although he has warned it may be harsh on financial advisers.
Under the scheme, IFAs who sold the investments will have to stump up about £110m to clients, with Financial Services Compensation Scheme (FSCS) levy-payers picking up the tab for any of the firms who fail.
Although he said it was "good news" for investors, Davis told the This is Money he was "unsure" whether the advisers should be paying the price for the collapse of the funds.
While Capita, the authorised corporate director of the funds, has contributed to a separate £54m payment scheme for investors, the former Conservative leadership candidate added the company should be paying more.
He said: "It's hard to ignore the feeling that as a company with big interests in the City, Capita has got off lightly."
Meanwhile, fellow Conservative MP Alun Cairns, who chairs the Arch Cru all-party parliamentary group, said: "It may well be that some financial advisers have responsibilities for redress.
"But I feel other parties involved in this sorry affair need to step up to the plate."
Cairns has been among the MPs from across the political spectrum calling for an independent inquiry into the Arch Cru funds scandal, although the government has consistently rejected the need for one.
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