New Clothes for the Complaint King

Britain's financial ombudsman may be getting a rework.

Treasury minister, Emma Reynolds, is pushing forward a plan to dilute the powers of the financial ombudsman. 

This comes as part of Starmer’s plan to cut through swathes of red tape, expanding on groundworks laid by the disbanding of institutions such as NHS England. 

Starmer hopes that by cutting back bureaucracy the UK can both save money and stimulate growth. 

The FCA chief executive, Nikhil Rathi, seems to be of the same mind.

He recently said that removing red tape was important to allow for more risk-taking: “I believe this is the moment to reset our psychology, put aside British modesty and celebrate all our strengths”.

He continues by floating a range of possible changes to market rules and outlining the FCA’s modern approach to regulation:

“Our regulatory framework needs to support innovation with guardrails. So we’re being bold to support change, innovation, and growth, but let’s not confuse that shift in risk appetite with compromising integrity.”.

As for the Financial Ombudsman Services (FOS), The announcement is that companies will now be able to appeal FOS judgements before having to go to judicial review. 

The appeal process is likely to be shorter, and much cheaper than taking a judicial review process to the already backed-up court system. 

This addition may also make the Ombudsman more reluctant to hand out judgements ruling against companies, as they can be more easily reviewed. 

While this benefits companies by contributing to less restrained, and more profitable, financial organisations, some may express concern over what it means for consumers. 

However, it is worth remembering that it is a two way street. The FOS is specifically designed to protect consumers, so businesses are inherently on the backfoot in these cases. 

So maybe it makes sense that a little bit of that consumer bias is sacrificed in the name of Labour’s primary objective at the point of election - economic growth.