The objectives of the Financial Conduct Authority (FCA) should be rewritten to include duty to promote competition for benefit of consumer, a Treasury Committee report has recommended.

The Treasury Committee has today published a FCA containing a number of recommendations for the Government’s consideration ahead of the drafting and publication of the Financial Services Bill early in 2012.

Andrew Tyrie MP, chairman of the Treasury Committee, said: “We need a fresh approach to regulation. The plain fact is that the FSA did not succeed in protecting consumers from spectacular regulatory failures. The mis-selling of PPI and endowment mortgages are just two examples. The FSA is not only expensive, for which the consumer always pays, but many have told us that it has also become bureaucratic and dominated by a box-ticking culture.

“The creation of the FCA is an opportunity to create something much better. If we are not careful, the FCA will become the poor relation among the new institutions. But it is the one that will matter most to millions of consumers.”

Among the Treasury Committee’s recommendations are:

1. That the Government should legislate to give the FCA a primary objective to promote effective competition for the benefit of the consumer. This is closely in line with the thinking of the Independent Commission on Banking and the Office of Fair Trading.

2. That the FCA develops far more reliable estimates, in collaboration with the industry, of its own cost effectiveness.

3. That the Government differentiates between retail and wholesale consumers.

4. That both the FCA and the financial services industry make better efforts to communicate with each other.

5. That the current legislative proposals be revised to ensure that the FCA is properly accountable to Parliament and that tools are available to enable the required level of explanation from the regulator.