Santander urges ministers to intervene in UK car finance compensation scheme
Santander UK has urged the government to intervene in the £11bn car finance compensation scheme, claiming that the current proposals could end up inflicting “significant” harm to consumers, jobs and the broader economy.The comments mark some of the strongest criticism to date of the Financial Conduct Authority’s (FCA) redress scheme, which is meant to draw a line under 14m historic car loan contracts that may be deemed unfair because of commission arrangements between lenders and car dealers.The Spanish-owned UK lender has come out swinging, calling on the government to take action and push for “material changes” to the City regulator’s proposals, which are out for consultation following a landmark supreme court hearing in August.The chief executive of Santander UK, Mike Regnier, said: “We believe that the level of concern in the industry and market is such that material changes to the proposed FCA redress scheme should be an active consideration for the UK government.“Without such change, the unintended consequences for the car finance market, the supply of credit and the resulting negative impact on the automotive industry and its supply chain could significantly impact jobs, growth and the broader UK economy.
This could also cause significant detriment to the consumer,” Regnier said, in comments released on Wednesday morning,His comments came as the high street bank again delayed the release of its UK results, saying it needed “greater clarity” regarding the FCA’s redress scheme “and their potential impact on Santander UK and the wider market”,The bank said on Wednesday, however, that it did not expect any “material adverse impact” on its financial position as a result of the car finance compensation scheme, even in a “severe” scenario where payouts were increased,Santander UK already put aside £295m to cover potential payouts to car loan customers last year,Rachel Reeves has tried to influence the direction of the car finance scandal.
In January, the chancellor tried to intervene in the supreme court hearing, urging judges to avoid handing “windfall” compensation to borrowers.That attempt was ultimately rejected by judges.The Guardian later revealed that the chancellor was considering overruling the supreme court’s decision with retrospective legislation, in order to help save lenders billions of pounds in the event that it ruled in favour of consumers.The court largely sided with lenders in the end, and Reeves did not step in.While a government intervention at this stage would prove controversial, Regnier said it was Santander’s duty to “do all we can” to protect the car loan industry.
“While the FCA considers the outcome of its consultation, we believe it is our duty to do all we can to secure an orderly and fair outcome from this consultation process,“This is not a question of investor versus customer interest, quite the reverse,What is at stake is the supply of credit that customers need and that supports a very important sector for the economy,” Regnier said,Lenders, claims firms and teams of lawyers are racing to respond to hundreds of pages of consultation documents before the mid-November deadline, with parties leaving the door open to challenging the compensation scheme in court,Sign up to Business TodayGet set for the working day – we'll point you to all the business news and analysis you need every morningafter newsletter promotionThat could include carmakers, whose lending arms are expected to have to cover nearly half of the redress bill.
Mercedes-Benz disclosed on Wednesday that it had set aside €422m (£371m) to cover compensation, the largest sum for a carmaker to date.BMW said last month that it had set aside £207m and Honda £62.2m.The FCA said: “We welcome considered feedback on our consultation and we’ve set out in detail our thinking behind the proposals.We believe a compensation scheme is the best way to settle, for both lenders and consumers, liabilities that exist no matter what.
Alternatives would be more costly and take longer.“It’s vital we draw a line under the issue so a trusted motor finance market can continue to serve millions of families every year.”A Treasury spokesperson said: “The independent FCA has set out its consultation and it’s vital that all stakeholders take part.We want to see this issue resolved in an efficient and orderly way that provides certainty for consumers and firms.”
Alan Turing institute launches new mission to protect UK from cyber-attacks
Britain’s leading AI institute has announced a new mission to help protect the nation from cyber-attacks on infrastructure, including energy, transport and utilities, after it was embroiled in allegations of toxic work culture and the chief executive resigned amid ministerial pressure.The Alan Turing Institute will “carry out a programme of science and innovation designed to protect the UK from hostile threats”, it announced on Tuesday as part of changes following the resignation last month of Jean Innes, its chief executive, after a staff revolt and government calls for a strategic overhaul of the state-funded body.The mission comes amid growing concern over Britain’s vulnerability to internet outages and cyber-attacks after this month’s incident affecting Amazon’s cloud computing globally and recent cyber-attacks crippling production at Jaguar Land Rover factories, and supply chains at Marks & Spencer and the Co-op.Blythe Crawford, the former commander of the UK’s air and space warfare centre , will report back next month on how the government-funded institute “can best support the scale of government AI ambitions in defence, national security and intelligence”.The chair, former Amazon UK boss Doug Gurr, said 78 different research projects at the 440-staff institute have been closed, spun out or completed because they do not align with the new direction
Tech chiefs tell Trump to call off troops – will Firefox go ‘full AI’?
Hello, and welcome to TechScape. I’m your host, Blake Montgomery, confounded by the ending of Bugonia and looking forward to seeing Guillermo del Toro’s Frankenstein.In this week’s newsletter: the head of Firefox talks AI-integrated browsers; the tech billionaires’ support of Trump and their successful request to defer national guard deployment to San Francisco; and the growing prevalence of face-scanning in online dating. Thank you for reading.Do you need an assistant for your online activities?Multiple major players in artificial intelligence are moving on from chatbots like ChatGPT and are now focusing their efforts on new browsers with deep AI integrations
Amazon confirms plans to lay off 14,000 corporate workers as part of wave of cuts
Amazon has confirmed plans to lay off 14,000 corporate workers, as part of a wave of cuts expected to hit tens of thousands of jobs.The Seattle-based retail giant, which is vying to reverse a pandemic hiring spree, is attempting to cut costs and slim down its huge operation. This summer, its CEO warned white-collar employees their jobs could be taken by artificial intelligence.Beth Galetti, a senior vice-president at Amazon, wrote in a memo to employees on Tuesday: “The reductions we’re sharing today are a continuation of … work to get even stronger by further reducing bureaucracy, removing layers, and shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs.”On Monday, Reuters and the Wall Street Journal reported that Amazon was poised to cut as many as 30,000 corporate jobs, citing unnamed sources familiar with the matter, as it tries to undo the vast recruitment drive it embarked on at the height of the coronavirus pandemic, which unleashed an extraordinary – but fleeting – surge in demand for online shopping
Elon Musk launches encyclopedia ‘fact-checked’ by AI and aligning with rightwing views
Elon Musk has launched an online encyclopedia named Grokipedia that he said relied on artificial intelligence and would align more with his rightwing views than Wikipedia, though many of its articles say they are based on Wikipedia itself.Calling an AI encyclopedia “super important for civilization”, Musk had been planning the Wikipedia rival for at least a month. Grokipedia does not have human authors, unlike Wikipedia, which is written and edited by volunteers in a transparent process. Grokipedia said it is “fact-checked” by Grok, Musk’s AI chatbot.Musk said the idea was suggested by the Trump administration’s AI and cryptocurrency czar, David Sacks
‘A good moment in time for us’: Firefox head on AI browsers and what’s next for the web
Do you need an assistant for your online activities?Multiple major players in artificial intelligence are moving on from chatbots like ChatGPT and are now focusing their efforts on new browsers with deep AI integrations. Those could take the form of an agent that shops for you or an omnipresent chatbot that follows you around and summarizes what you’re seeing, looks up related stuff, or answers related questions.Last week alone, OpenAI released the ChatGPT Atlas browser, and Microsoft showed off Edge’s new Copilot Mode, both of which heavily feature chatbots. At the start of October, Perplexity made its Comet browser free. In mid-September, Google rolled out Chrome With Gemini, integrating its AI assistant with the most popular browser in the world
More than a million people every week show suicidal intent when chatting with ChatGPT, OpenAI estimates
More than a million ChatGPT users each week send messages that include “explicit indicators of potential suicidal planning or intent”, according to a blogpost published by OpenAI on Monday. The finding, part of an update on how the chatbot handles sensitive conversations, is one of the most direct statements from the artificial intelligence giant on the scale of how AI can exacerbate mental health issues.In addition to its estimates on suicidal ideations and related interactions, OpenAI also said that about 0.07% of users active in a given week – about 560,000 of its touted 800m weekly users – show “possible signs of mental health emergencies related to psychosis or mania”. The post cautioned that these conversations were difficult to detect or measure, and that this was an initial analysis
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