Top consumer representative quits

By Paul Lewis
BBC Radio 4's Money Box

Lord David Lipsey thought his position required outspokenness

The chairman of a top consumer advisory body has resigned after just six months in the job.

Lord Lipsey took over as chairman of the Financial Services Consumer Panel in June and wanted to expand its role to champion consumer issues.

But he says the Financial Services Authority refused to pay for the extra staff he needed.

The FSA says the Panel's role is clear and it did not intend to expand it or the resources it provided.

Push to shove

The Panel was set up to advise the Financial Services Authority on consumer issues.

Unless we get consumer confidence back we are not going to get financial services back to the role they should be playing

Lord Lipsey

But David Lipsey, who is a Labour peer and economist, told Money Box on BBC Radio 4 that before he was appointed as chairman he set out changes he wanted to make.

"When I applied for the job I made absolutely clear that I only wanted to do it on the basis of an expanded role and I thought that had been accepted by the FSA.

"But when push came to shove it turned out that it hadn't been."

And he said that the extra resources he wanted were tiny in the context of the FSA's total budget which is more than £320m a year.

"It's very minimal in terms of an FSA that has just announced its intention to take on 318 extra regulatory staff.

"At the moment we have two full time staff with one to be appointed.

"A dozen people would have done it very adequately.

"If we'd had 2% of the extra staff being put on to supervision we'd have had plenty."

Consumer confidence

Asked if he had brought the problems on himself by being too outspoken Lord Lipsey replied,

"I have been deliberately outspoken because the situation has required outspokenness and I hope that tradition in the panel chairman will survive in the new regime."

He said that consumers would be the losers from that decision.

"Consumers would have been better off if the FSA and the Panel had accepted the wider role I spelt out.

"The case… for a wider role has been immeasurably strengthened by the financial crash.

"Unless we get consumer confidence back we are not going to get financial services back to the role they should be playing."

In a statement to Money Box the FSA said,

"The remit of the role was made clear to all applicants.

"The Panel has a very important role to play providing independent advice from the consumer point of view on the FSA's policies as they are developed.

"We will continue to fund the Panel's costs… at similar levels to… previous years."

BBC Radio 4's Money Box was broadcast on Saturday,
29 November 2008 at 1204 GMT.