The former City minister John Glen has quit a cross-parliamentary group on fairer finance after it released an incendiary report on the Financial Conduct Authority (FCA) accusing it of “incompetence”.
In a letter to the Financial Times, Glen, who served as City minister between 2018 and 2022, said he was “dismayed” by the report and the “sensationalist headlines it generated” and claimed he had not been aware of its contents prior to publication.
“I joined the APPG following the UK election in July but was not involved in its report, as much of the work for it was done prior to the vote,” he wrote. “After reading its contents, I resigned from the group.”
In a more than 350-page report compiled over three years, the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services, which also counts Corbyn’s former shadow Chancellor, John McDonnell, and former CMA chair, Lord Tyrie, among its members, criticised the City watchdog as “incompetent”, “opaque” and “unaccountable” and said it is “slow to act and even slower to admit it has got things wrong and to change”.
The report, compiled through testimony from 175 whistleblowers, former employees and its own staff, painted a scathing picture of the watchdog and suggested it had had been hamstrung by an overly close relationship with the firms it regulates.
However, Glen attacked the compilation of the report for “fusing the gripes of anonymous embittered current and former employees” and said it will not “help move the focus of the organisation”.
“For too long, the FCA has been the convenient whipping boy for the contradictory simultaneous criticisms of needing to deliver ‘less bureaucratic, growth-sapping regulatory burdens’ while giving guarantees of ever ‘higher standards of consumer protection’,” he said.
“We cannot have both unless we agree the trade-offs.”
The report landed in the middle of a row over the role and focus of the FCA, which has come under fire from both consumer groups and City firms for failing to strike a balance between growth and reducing risk in the system.
In her maiden Mansion House speech in November, the Chancellor Rachel Reeves revealed she had written to the City regulators to give them new remit letters focused more tightly on boosting growth and competitiveness.
While the FCA and Prudential Regulation Authority were told to consider growth in their mandates last year by the previous government, both have come under fire for failing to row in behind the plans.
The FCA triggered backlash for its plans to ‘name and shame’ firms facing enforcement investigations – proposals it has since rowed back on. Meanwhile it has faced fury from campaign groups like Transparency Taskforce, which helped the cross-party group compile the report, for allegedly failing to protect whistleblowers.
Glen added that while he “was sure” the authors of the report had “good intentions”, it was time to “end this cycle of grievance and focus on the question of how we can enable the global respected asset that is our financial services industry, an industry that delivers £173.6bn gross value added to the UK economy, to prosper”.
“Let’s be honest — we cannot have it all,” he wrote.