Labour MP: Treasury committee will prove Govt ‘neutering’ FCA

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A Labour MP has claimed an investigation into the FCA’s decision to drop an inquiry into banking culture will prove the regulator did so on instruction from the Government.

The Treasury committee will grill FCA chairman John Griffith-Jones and acting chief executive Tracey McDermott on 20 January as it seeks to evaluate the decision in the context of the implementation of the Vickers reforms, set out to improve conduct in banks.

However, committee member and Labour MP John Mann says he expects the session will also show the FCA dropped the report at the prompting of the Government.

Speaking to the BBC, Mann said: “It’s my belief that the Government has interfered.

“I think our inquiry will prove that, hopefully prove precisely how they’ve interfered. The FCA hasn’t reached its own conclusions, it’s been told what to do – it’s been told via the Treasury.”

The Labour MP says Chancellor George Osborne wanted to “neuter” the FCA and parachute “one of his senior officials” in to run the regulator.

Questions have been raised as to the independence of the regulator since Osborne declined to renew the contract of FCA chief executive Martin Wheatley.

Two Treasury mandarins are understood to be among the candidates to replace Wheatley, while McDermott this week ruled herself out of the running for the job.