Former Cabinet Secretary Lord O’Donnell says the Treasury should consider levying financial services firms to fund its work in the financial sector.
Speaking in yesterday’s debate in the Lords on the Financial Services Bill, O’Donnell suggested the civil servants working on financial services regulation for the department should be funded in the same way as the FSA. This would exclude the minister responsible for that brief, Treasury financial secretary Mark Hoban.
O’Donnell, known during his time in Whitehall as GOD, said the department is at risk of being “swamped” by its workload, adding that the “imbalance” between its resources those of the industry needs to be addressed.
O’Donnell said: “The Treasury is a brilliant department and I was proud to be its Permanent Secretary, but it is in danger of being swamped by the pressures placed upon it.
“It is in the interests of all of us that the Treasury is able to continue attracting the best staff and retaining their skills and experience. To avoid this being at the expense of the taxpayer, perhaps the part of the Treasury dealing with financial services and stability should be funded in the same way as the Bank and the FSA, namely by the financial industry which benefits from their work. Otherwise, the Treasury is in danger of cutting off its arms as well as its nose to make its hair shirt fit.”