Osborne accused of ‘neutering’ watchdog

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A member of an influential House of Commons committee has accused Chancellor George Osborne of trying to “neuter” the City regulator he established to police banks in the wake of the financial crash.

The Commons Treasury Committee announced it was summoning the chairman and acting chief executive of the Financial Conduct Authority to give evidence on January 20 on its controversial decision to drop an inquiry into the culture of banking.

The Treasury has denied any involvement in the decision by the independent FCA, and Mr Osborne said he had “no fore-knowledge” the probe was being scrapped.

But committee member John Mann said he believed the Treasury “directly and specifically” intervened to press the watchdog to take a softer line with the banks following the departure last summer of former chief executive Martin Wheatley, who was told the Chancellor would not renew his contract.

He said he was hoping that Mr Osborne and senior Treasury officials will also be called to give evidence to the committee.

Mr Mann said: “Up to August, the FCA had a huge amount of work ongoing into culture within banks and how to make sure the culture was appropriate. In September, Martin Wheatley left and instantly all that work was changed.”