Letwin says Tories would bring about 'regime change' at FSA

The Conservative Party would radically prune the remit of the Financial Services Authority if it were elected, on the back of a groundswell of criticism of the City regulator among UK companies.

The Conservative Party would radically prune the remit of the Financial Services Authority if it were elected, on the back of a groundswell of criticism of the City regulator among UK companies.

Oliver Letwin, the shadow Chancellor, said at the weekend the Conservatives would bring about a "change of regime" at the City watchdog, to deal with mounting criticism that companies are drowning under a sea of demands from the regulator.

The attack comes as the FSA is set to hold its annual general meeting in London on Thursday. In a rare move to respond to criticism of itself, the body said: "The FSA's remit is a matter for government. We don't comment on the policies of political parties."

Internal Conservative documents show the party believes the FSA is "not a democratic body". As a result, the document says, "businesses are manifestly cautious of 'putting their head above the parapet' to criticise FSA behaviour or aspects of regulatory policy for fear of retaliatory, regulatory initiatives".

The opposition party also suspects the "FSA has become increasingly the tool of the Treasury", the Government department under which the Financial Services and Markets Act was established.

The Conservatives are basing their policy on a survey of 200 British companies and trade bodies which was compiled by the Centre for Policy Studies, a think-tank. The results of the survey will be published in October.

Responses leaked in a Sunday newspaper amounted to a damning critique of the "excessive" amount of regulation carried out by the FSA, the lack of specialist knowledge among its staff and their high rate of turnover.

The Conservatives plan to make deep cuts in some processes, such as the FSA's heavy demands for checks and balances by companies to guard against money laundering.

However, supporters of the FSA believe it can do little to counter charges about over-regulation because it is carrying out its remit to implement directives both from the UK government and from the European Union - with 70 per cent of requirements it passes on to companies coming from Brussels.

Turnover of staff at the FSA is 8 per cent a year - less than the average in the financial services industry. The body also invests considerable amounts in training staff to have cutting-edge knowledge about the markets it regulates.

There is a view within the FSA that companies' complaints are based on the fact that, in many areas, regulation used to be much lighter than it should have been under the law.

Separately, Mr Letwin said he was also considering making the Office of National Statistics independent, giving it a similar status to the Bank of England.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Reach Volunteering: Trustees with Finance, Fundraising and IT skills

Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent
Markus Persson: If being that rich is so bad, why not just give it all away?

That's a bit rich

The billionaire inventor of computer game Minecraft says he is bored, lonely and isolated by his vast wealth. If it’s that bad, says Simon Kelner, why not just give it all away?
Euro 2016: Chris Coleman on course to end half a century of hurt for Wales

Coleman on course to end half a century of hurt for Wales

Wales last qualified for major tournament in 1958 but after several near misses the current crop can book place at Euro 2016 and end all the indifference