MPs win powers over hiring and firing of FCA chief

Andrew Tyrie Tory conf 2013.jpg

The chair of Parliament’s influential Treasury committee has secured a deal allowing it to interview the next FCA chief executive ahead of their appointment.

Andrew Bailey was named as the incoming FCA leader in January, with committee chair Andrew Tyrie calling for MPs to be handed power of veto on future appointments just a month later in a bid to entrench the regulator’s independence from government.

Tyrie tabled the proposal as an amendment to the Bank of England and Financial Services Bill, currently being debated in Parliament, suggesting that the Government would be barred from appointing or dismissing an FCA chief executive without the support of the Treasury Committee, mirroring a similar function on the Office for Budget Responsibility.

However, in a deal reached with the Government, the Committee will instead gain a new right for a public pre-appointment hearing with the Government’s preferred candidate for the role.

If the Committee does not approve the nomination, then it will issue a report outlining its objections, with the matter referred to a vote in the House of Commons, and the Government bound to the result.

The deal means Government will need to ensure that Parliament, and in particular the Treasury committee, is happy with the appointment of an FCA chief executive, or a decision not to reappoint them to the role.

Treasury committee chair Andrew Tyrie says: “The FCA needs demonstrably independent leadership. Parliament’s, and the committee’s, influence over the appointment and dismissal of the chief executive of the FCA has been greatly strengthened by the arrangements set out in the Chancellor’s letter. Parliament will now be better placed to safeguard the FCA from interference – or the perception of interference – by the Treasury or Treasury ministers.”

He adds: “Quangos are acquiring huge powers across Government. Unless they are required by Parliament to explain their actions to select committees, the risk will be that many will be left unaccountable, in practice, to anybody. That is why a greater role for Parliament, and for select committees, in the appointment and dismissal of the people that head up these quangos is so important.”