High street bank Santander has launched a scathing criticism of the car finance compensation scheme and delayed the release of its financial results “in light of uncertainties” it has caused.

The Spanish-owned lender called for government intervention – warning it sees the scheme as posing a wider threat to the economy, jobs and consumers.

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The scheme was set up by financial regulator, the Financial Conduct Authority (FCA), to compensate people mis-sold car loans.

Under FCA proposals, up to 14.2 million people could each receive an average of £700, as lenders broke the law by failing to disclose they paid commission to brokers. It meant customers lost out on better deals and sometimes paid more.

The proposal differs, Santander said, “in important respects” from the Supreme Court ruling that paved the way for the redress plan.

Mr 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.

“What is at stake is the supply of credit that customers need and that supports a very important sector for the economy.”

Deferred results

Santander was due to publish its latest financial figures on Wednesday morning, but has held back until it says it gets “greater clarity” on the scheme and its impact on the bank and the wider market.

No new date to report results was given. Release of the same third-quarter results last year was also deferred due to uncertainty over the impact of car loan mis-selling.

The hit to Santander, however, is not expected to impact its operations or financial position, even in a worst-case scenario for the bank where it has to allocate more funds for compensation, it said.

It had already set aside £295m to deal with the mis-selling.

The FCA said, “We believe a compensation scheme is the best way to settle, for both lenders and consumers, liabilities that exist no matter what.

“Alternatives would cost more 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.”

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Santander said it was committed to “ensuring fair outcomes” for its customers and will continue engaging constructively with the FCA, HM Treasury and other stakeholders.

Santander UK shares were up 0.5% following the news.

Rachel Reeves has said she is determined to “defy” forecasts that suggest she will face a multibillion-pound black hole in next month’s budget.

Writing in The Guardian, the chancellor argued the “foundations of Britain’s economy remain strong” – and rejected claims the country is in a permanent state of decline.

Reports have suggested the Office for Budget Responsibility is expected to downgrade its productivity growth forecast by about 0.3 percentage points.

That means the Treasury will take in less tax than expected over the coming years – and this could leave a gap of up to £40bn in the country’s finances.

Ms Reeves wrote she would not “pre-empt” these forecasts, and her job “is not to relitigate the past or let past mistakes determine our future”.

“I am determined that we don’t simply accept the forecasts, but we defy them, as we already have this year. To do so means taking necessary choices today, including at the budget next month,” the chancellor added.

She also pointed to five interest rate cuts, three trade deals with major economies and wages outpacing inflation as evidence Labour has made progress since the election.

Speculation is growing that Ms Reeves may break a key manifesto pledge by raising income tax or national insurance during the budget on 26 November.

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Although her article didn’t address this, she admitted “our country and our economy continue to face challenges”.

Her opinion piece said: “The decisions I will take at the budget don’t come for free, and they are not easy – but they are the right, fair and necessary choices.”

Yesterday, Sky’s deputy political editor Sam Coates reported that Ms Reeves is unlikely to raise the basic rates of income tax or national insurance, to avoid breaking a promise to protect “working people” in the budget.

Sky News has also obtained an internal definition of “working people” used by the Treasury, which relates to Britons who earn less than £45,000 a year.

This, in theory, means those on higher salaries could be the ones to face a squeeze in the budget – with the Treasury stating that it does not comment on tax measures.

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In other developments, some top economists have warned Ms Reeves that increasing income tax or reducing public spending is her only option for balancing the books.

Experts from the Institute for Fiscal Studies have cautioned the chancellor against opting to hike alternative taxes instead, telling The Independent this would “cause unnecessary amounts of economic damage”.

Although such an approach would help the chancellor avoid breaking Labour’s manifesto pledge, it is feared a series of smaller changes would make the tax system “ever more complicated and less efficient”.

Roughly 14,000 corporate jobs are to go at tech giant Amazon, the company announced.

The impact on the 75,000-strong UK workforce is not immediately clear from the announcement, which said impacted people and teams would hear from leadership on Tuesday.

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A loss of 30,000 jobs had been anticipated based on reporting from Reuters and The Wall Street Journal.

Amazon workers’ union in the UK, GMB, had said, based on those numbers, that “it is almost inevitable that many UK workers will lose their jobs”.

“The fact that companies can accrue such astronomical profits to the point where its [founder, Jeff Bezos] can holiday in space and hire out entire cities for his vulgar wedding prior to casting aside loyal workers without a thought just underlines everything that’s wrong with a system that many feel is beyond repair,” the union said.

Why?

The growth of artificial intelligence (AI) has been blamed for the cuts.

In a message sent to staff, Amazon’s senior vice president of people experience and technology, Beth Galetti, alluded to the criticism that the company is cutting jobs while profiting £19.2bn in results published in July.

“Some may ask why we’re reducing roles when the company is performing well,” she wrote.

“What we need to remember is that the world is changing quickly. This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before.”

Amazon is also continuing to unravel some of the hiring it made during the COVID-19 pandemic and has warned about reducing headcount and bureaucracy.

In May 2021, for example, the business said it was hiring more than 10,000 UK jobs.

The largest ever cut of 18,000 Amazon roles was announced in January 2023 when the consumer retail part of the business, including Amazon Fresh and Amazon Go, were scaled back.

It plans to replace more than half a million jobs with robots, automating 75% of its operations, according to the New York Times.

What next?

Those who lose their job will be prioritised for openings within Amazon to help “as many people as possible” find new roles, she said.

Hiring will continue, despite the latest cull, in “key strategic areas” while the online retail behemoth finds additional places we can “remove layers, increase ownership, and realise efficiency gains”.

Amazon said it is “shifting resources to ensure we’re investing in our biggest bets and what matters most to our customers’ current and future needs”.

In the UK, GMB said, “We will be supporting our members across Amazon as they face this uncertain future.”

It is to announce financial results for the third quarter of this year on Thursday evening, UK time.

Amazon UK has been contacted for comment.