Chief role at FSA 'not to be split'

The government yesterday insisted there was no question of splitting the roles of chairman and chief executive of the Financial Services Authority, the City watchdog, despite Opposition claims that they had forced a climbdown over the issue in the House of Lords. Opposition peers yesterday dropped attempts to force a vote after the Government agreed to ensure the new City watchdog complies with the spirit of the combined corporate governance code.

Lord Saatchi, Opposition Treasury spokesman in the House of Lords, said he was delighted after Lord McIntosh, his opposite number, said he would consider bringing an amendment to that effect to the Financial Services and Markets Bill when it came back to the House for its third reading. But Lord McIntosh pointed out that the code did allow the roles not to be split where there was clear justification for the arrangement. This, he said, was the case of the FSA which was a body which had to be clearly accountable to government.

The Opposition also defeated the Government on the issue of whether the independent investigator appointed to look into allegations of FSA maladministration should be able to make ex-gratia payments. The Government had conceded the point but insisted it was a matter for the FSA which should not be stipulated in the legislation.