Liberal Democrat leader Charles Kennedy wants to cut the burden of red tape for small businesses by establishing an independent body to regulate the FSA.
Speaking at a business forum hosted by the Institute of Chartered Accountants in England and Wales this week, Kennedy pledged to help SMEs escape red tape and bureaucracy.
Kennedy said he intends to champion an independent centre for regulatory assessment that would force the regulator and Whitehall to jump through hoops to prove that implementation of new regulation is worthwhile.
Regulatory bodies including the FSA and Inland Revenue would have to show cost analysis and benefits of proposed regulation before implementation.
The speech marked a rare intervention in financial services on the part of Kennedy. The last time he criticised the FSA was in January 2001 over its handling of Axa's orphan assets and Equitable Life.
Kennedy said: “There is an increasing sense of regulation acting as a disincentive to businesses, an accumulation of work from the Chancellor. The business community as a whole has been overburdened with red tape and bureaucracy. There is a need for an independent centre for regulatory assessment.”
FSA spokesman Robin Gordon-Walker says: “I should point out that we are already very highly accountable in various ways, including accountability to Parliament, to the Government, who appoint our board, and through annual reports and open meetings. We get strong input from consumers and the industry and it is a statutory requirement to consult on all rules and regulation and produce feedback.”