Cities Minister Andrew Griffiths told MPs the Prime Minister wanted more time “to understand what is an important and detailed matter” and to consider comments made about the controversial plan. Griffiths said it was important to have the “correct wording” in a proposed new “public interest intervention power”, which would allow ministers to override regulators, including the BoE and the Financial Conduct Authority. Regulators have warned the power would undermine their independence and weaken confidence in the City of London as a financial centre, in an increasingly tense standoff with the government. Sunak, while serving as chancellor, proposed the power to allow ministers to “direct a regulatory authority to make, amend or withdraw rules”. He said he wanted to make them more democratically accountable. Griffith insisted in a letter to the House of Commons Treasury committee that the government still intended to introduce the power, which he said would be used “in exceptional circumstances” and with “appropriate safeguards”. However, he upset MPs by announcing that the government would no longer table the “interference” amendment to the Financial Services Bill during the House of Commons committee stage. Angela Eagle, the Labor MP and interim chair of the Finance Committee, said the proposal was “undoubtedly a potential threat” to the independence of regulators and that MPs should be given the opportunity to consider it properly. He wrote to Griffiths insisting that the new power should be introduced at the report stage of the Financial Services Bill in the Commons – its next stage – and not in the House of Lords. Shadow City Minister Tulip Siddiq claimed a turnaround was underway. “The prime minister can’t pretend he didn’t know about the proposed powers to override decisions made by financial services regulators – he drew up the plan when he was chancellor. “The Government must now heed the Bank of England’s warnings and not just delay this dangerous proposal, but abandon it altogether.” The Treasury insisted there would be no reversal. Sam Woods, chief executive of the Prudential Regulation Authority, and FCA chief Nikhil Rathi warned last week of the implications of the new powers. Recommended Woods said: “Some might think that such a power would enhance competitiveness. “My view is that over time it would do just the opposite, undermining our international credibility and creating a system in which financial regulation blew much more with the political wind – weaker regulation in some governments, tighter regulation in others.” . His stance was echoed by Rathi, who said it was “vital” that FCA’s “independence and flexibility in speed [was] not undermined by any suggested power of invitation.’
