Britain delays new power to veto financial regulators

Huw Jones
Updated ·2 min read
Director of the Number 10 Policy Unit Andrew Griffith is seen outside Downing Street in London

By Huw Jones

LONDON (Reuters) -Britain will delay proposing a new power for the finance ministry to veto financial rules written by regulators, City Minister Andrew Griffith has said, after the plan triggered opposition from the Bank of England and others.

Griffith had previously said he would introduce an amendment in a financial services and markets bill now before parliament giving the ministry powers to "call-in", or veto, rules written by the Bank of England and the Financial Conduct Authority.

It would be used sparingly and only if there were significant public interest, Griffith had said.

Although the exact wording of the power has yet to be made public, the plans triggered opposition from the Bank of England, which said it could harm the City's global competitiveness.

In a letter dated Oct. 31 to parliament's Treasury Select Committee, Griffith said that "in light of the appointment of the new Prime Minister last week and the need for government to consider the detail carefully, we will now be unable to take the amendment in time" for the deadline for the committee scrutinising the bill.

Griffith said the government has been clear that such a public interest intervention power would only ever be used in exceptional circumstances, and must be accompanied by appropriate safeguards.

"But it is right for the democratically elected government of the day to be able to intervene in financial services rulemaking, in the public interest," Griffith said.

"The government will bring forward further detail in due course."

In theory, the finance ministry could still propose a veto power for itself before the final vote on the bill.

Angela Eagle, interim chair of the TSC, said she has asked the government to confirm that such a call-in power would be properly scrutinised by parliament and regulators consulted.

"The Government's proposed 'call in' power is controversial and potentially risky," Eagle said in a statement.

"That's why we are calling for the Government to be open and transparent in its decision making, and to provide timely Parliamentary scrutiny in the Commons, in order to avoid any adverse unintended consequences of legislating for this power."

(Reporting by Huw Jones; Editing by Iain Withers and Hugh Lawson)