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The Treasury is seizing control of the appointment of a senior figure to scrutinise complaints against the UK’s financial watchdogs amid frustration within government over regulators’ focus on promoting economic competitiveness.
Sky News has learnt that ministers are to select the next Financial Regulators Complaints Commissioner – an appointment previously overseen by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) themselves.
Sources said the role was likely to be advertised as soon as this week after the incumbent, Amerdeep Somal, said she would stand down when her first three-year term expires in November.
Ms Somal is to become chair of the Law Society at the start of next year.
The shift in responsibility for the appointment is significant because of the political backdrop against which it is being made.
In the past year, there has been an escalation of tensions between the Treasury and the City and banking regulators, the latest example of which exploded last month with the row over Nigel Farage’s Coutts accounts.
Senior Conservative MPs including Sir Iain Duncan Smith have called for the FCA to be investigated over whether its emphasis on diversity in financial institutions has sparked a clampdown on customers with views not deemed by them to be inclusive.
The FCA has denied that its approach is responsible for fuelling a culture in banking that has prompted the debanking furore.
Andrew Griffith, the City minister, is understood to have written a foreword to the job advertisement in which he will say: “The Complaints Commissioner is fundamental in providing robust and independent scrutiny of the way the financial services regulators have carried out their roles.”
Mr Griffith will add that the independence of the position would be significantly enhanced by the fact that the new commissioner will be appointed by government rather than regulators themselves.
That would be further augmented by “new reporting requirements which will ensure that there is greater transparency about how the regulators respond to the Commissioner’s recommendations”, he will add.
“Our financial services regulators play an important role in regulating and supervising the financial services industry and their ability to act robustly is important to millions of consumers and businesses across the country.
“However, it is important that this is balanced against the need to hold the regulators accountable for their actions.
The Complaints Commissioner handled more than 420 cases last year, making scores of recommendations, according to insiders.
The commissioner is also responsible for probing complaints against the Payment Systems Regulator.
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