In a letter to the committee’s chair Andrew Tyrie MP, Chancellor George Osborne said that in a future Bill he will aim to make CEO of the regulator subject to a fixed, renewable five-year term.
These changes will not apply to Andrew Bailey, who was recently announced as Martin Wheatley’s successor, but will affect the next person to take up the appointment after Bailey.
Last year Martin Wheatley stepped down as chief executive of the FCA amid reports that he had been ‘forced out’ by Osborne, who had refused to renew his board membership at the regulator.
After MPs tabled the amendment to the Bill in February, Tyrie explained that the public should have confidence that the government was not interfering with independent supervisors and regulators.
Osborne said he would ensure appointments to the head of the FCA would enable the committee to hold a hearing after the appointment is announced, but before it is formalised.
“Should the TSC recommend in its report that the appointment be put as a motion to the whole House [of Commons] the government will make time for this motion and respect the decision of the House,” he said.
Tyrie said the committee and government’s influence over the appointment and dismissal of future FCA bosses had been “greatly strengthened”.
“Parliament will now be better placed to safeguard the FCA from interference – or the perception of interference – by the Treasury or Treasury ministers,” he added.
“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.”