Former Cabinet Secretary Lord Gus O’Donnell says the Treasury should consider levying financial services firms to fund its work in the financial sector.
Giving his first speech as a peer during this week’s Lords debate on the Financial Services Bill, O’Donnell said the Treasury is in danger of being “swamped” by its workload.
He suggested civil servants working on financial services regulation for the department should be funded through an industry levy to reduce the burden. This would exclude the responsible minister, which is currently Treasury financial secretary Mark Hoban.
O’Donnell, known during his time in Whitehall as GOD, said pay in the department is too low and staff turnover too high, adding it is vital that the Treasury attracts and retains the best staff. He said the “imbalance” between its resources and those of the industry needs to be addressed.
He said: “It is in danger of being swamped by the pressures placed upon it. 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 of England and the FSA, namely by the financial industry which benefits from their work.”
Facts and Figures managing director Simon Webster says: “First the FSA, then the Financial Ombudsman Service, then the Financial Services Compensation Scheme and now this. Will the last person to leave the industry turn out the lights.”