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FSA fines since April set to go to Treasury

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The £59.5m fine handed to Barclays by the FSA for attempting to rig the Libor rate and any other FSA fines since April could be paid to the Treasury under proposals being considered by the Chancellor.

Currently, when a firm in one FSA fee block is fined, the relevant enforcement action has been funded by the fee block. Part of the fine is used to top up that block’s funding to take account of the money spent on the enforcement action. The rest of the fine proceeds are used to reduce future levies across all fee blocks by an equal amount.

But the Government now wants fines handed down by the FSA since April to bolster the public purse instead.

In a statement to MPs this afternoon, Chancellor George Osborne said the Government would publish amendments to the Financial Services Bill in the autumn to introduce the change which would cover any fines levied since April.

”These new arrangements will apply to fines received from the April 1, 2012 so it includes the Barclays’ penalty and from now on the multi-million pound fines paid by banks and others who break the rules will go to the benefit of the public not to other banks.”

Osborne tipped the move last week in a Parliamentary statement responding to news that Barclays had been fined £290m by the FSA and US authorities.

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Readers' comments (25)

  • nice, now we have the Treasury getting in on the act, behind the scenes putting pressure on the FSA to levy more fines to raise additional revenue. Where will it all end???? This is so wrong, but who in power or the public at large really gives a toss.

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  • ahhhh now i know where he's getting the money to help plug the gap created by stalling the fuel duty rise. What a bunch of idiots running this country.

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  • Dominic Thomas

    If ever there was a time for a rethink about how fees are paid, how firms and advisers are categorised surely it is now.

    Lets stop all the faffing around and sort it out once and for all. The Government are clearly only acting in a way that they think the electorate will think is reasonable, say some harsh words and hope that the fact that they go to the same dinner parties won't be noticed.

    fed up with the lot of them.

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  • So, when we are sucked dry with additional levies by the dictator, we pay up meekly like saps.

    And when the dictator gets some money in, he filches it elsewhere instead of ameliorating the pain of the put-upon advice community.

    More like Stalinist Russia/Zimbabwe than a democratic society.
    Am thinking of passporting out to North Korea in an attempt to be less ground down

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  • Outrageous. Our whole sector is creaking under the cost of regulation, compliance, PII etc. if the government is allowed to raid the FSA's coffers the knock on effect will be to increase our fees further and could be the final nail in the coffin of many firms struggling to survive in the current climate. It's about time the way the system is funded is properly reviewed. As usual it will be the small firms who suffer the most and the government will have their blood on it's hands. Whatever next!?

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  • Surely this is misappropriation or 'stealing' by the government. How do we let them get away with it. We need civil disobedience by not paying levies en masse. We need somone like AIFA to actually organise and fight this.

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  • Now we know why they are still pursuing IFAs over Keydata as the Banking fine would otherwise have gone towards meeting the levy costs due to the failure of the product provider Keydata, whose product wasn't a product according to FSCS.

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  • It is a total ripoff.

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  • This stinks! We have to pay the FSCS levy and the cheeky hits ask for more half way through the year as they got their sums wrong, now they will have less money coming in as the fines will not be kept, less companies paying (as our numbers are falling by the day) all this equals greater expense for the good ones with prudent businesses, enoughs enough, I am speaking to my MP tomorrow and demand representation. On mass we CAN fight this, everyone in?

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  • I thought the FSA was totally separate from government? The money doesn't belong to the government if belong to the people that pay the FSA's fees!
    I am becoming more and more convinced that we no longer live in a democracy!

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