Future regulation should be carried out by a single body under the Bank of England, with the regulator pleading for its budget from the Treasury select committee, according to MP Douglas Carswell.
The Conservative MP for Clacton says such a structure would increase democratic accountability and would mean regulators face proper scrutiny over their budgets.
Carswell says: “You need a system which means that ultimately decision makers are not just inwardly accountable to other technocrats, but outwardly accountable. The proposed arrangements sound a bit like a technocratic merry-go-round.”
The Treasury consultation paper on changes to financial regulation proposes some co-ordination between the Consumer Protection and Markets Authority and the Prudential Regulation Authority but each body will be responsible for decisions affecting its remit.
The paper also proposes that the National Audit Office be responsible for auditing both the CPMA and the PRA but Carswell says this is insufficient.
He says: “The head of the regulator should have to plead annually before the Treasury select committee for their budget. It is a very sobering process and it would force them to justify what they do and how they do it.
“If it were sufficient for the NAO to oversee how our taxes were spent we would not bother having a legislature in the first place.”