FSA defends steep rise in tariffs

The Financial Services Authority, Britain’s chief City watchdog, insisted last night that it had listened to complaints about the cost of its fees, despite pressing ahead with a 35.8 per cent rises in tariffs paid by the firms it regulated.

The regulator expects City firms and others to pay it £435.5m in fees over the year to the end of March 2010, down slightly from the £437.7m it asked for earlier this year, since when it has attempted to cut costs.

However, the FSA, which charged around £318m last year, said it had amended the way in which it planned to generate the money, following complaints from some in the City. Certain types of firm now face larger fee increases than expected, while others will pay less.

Mortgage advisers, for example, had been expecting a 21.2 per cent increase in fees, but will now pay only 2.7 per cent extra.

Deposit-taking institutions, on the other hand, will see fees increase by 109.4 per cent, more than the 94.9 per cent first proposed. Firms dealing as principal face fee increases of 80.1 per cent, rather than 69.1 per cent as they had initially expected.

The FSA said there would be large numbers of small firms that actually saw their fees fall this year, but insisted it needed the extra money to pay for much more intensive scrutiny and regulation.

The regulator has faced widespread criticism for its failure to anticipate the banking crisis, but insists it needs extra resources if it is to step up its policing of the City.