The Financial Conduct Authority (FCA) came in for wide-ranging criticism from MPs on 1 February, but the regulator was spared a vote of no confidence during a debate in the House of Commons.
After more than two hours of debate, which saw MPs compare the regulator to a hopeless goalkeeper, at nearly 10pm the economic secretary to the Treasury Harriett Baldwin stood up and admitted “there are clearly still challenges ahead for the FCA”.
She admitted “the FCA has a tough job ahead”, reiterated her confidence that the City regulator has the right mandate and team and said: “I believe that today’s motion is neither well founded nor well timed, given that a new chief executive and a new team are in place.
“I strongly urge honorable members to ignore the motion before us tonight.”
Guto Bebb, who tabled the motion, accepted suggestions about the danger of passing a motion that would subsequently be ignored by the Government, but pointed out after hearing 13 back-bench speeches, only two were mildly supportive of how the FCA is operating.
He said: “There is an important message in that point: the FCA does need to reform.”
The Conservative MP for Aberconwy tabled the motion that “this House believes that the FCA in its current form is not fit for purpose and we have no confidence in its existing structure and procedures”.
He kicked things off by stating it is four years since he first raised the issue of interest swap mis-selling in the chamber, followed by three back-bench debates on the issue, an adjournment debate on the Connaught Income fund and a debate on the Royal Bank of Scotland global restructuring group.
Mark Garnier, a Conservative MP for Wyre Forest and member of the Treasury Select Committee, agreed there is plenty of evidence for how the regulator is “not necessarily standing up for the consumer”, but argued a motion of no confidence deserves a “more rounded view”.
He suggested MPs have “been guilty of what sports commentators do when a poor goalkeeper successfully saves many shots, but, when he lets through one crucial goal”, and is criticised by everybody for not being up to the job.
Mr Bebb responded as an Everton supporter, he has been patient with goalkeeper Tim Howard.
He said: “It is not that he made one mistake and allowed one goal to be scored; he has conceded half a dozen such goals this season. It is the same with the regulator. It is not the one mistake that we complain about; it is a pattern of behaviour.”
During the debate session, Scottish National Party MP for Edinburgh South West Joanna Cherry shared concerns that financial advisers, many of whom were also investors in the Connaught fund, risk continuing to be blamed for losses relating to it because of the FCA’s failure to investigate within a reasonable timescale.