City hit by £1.4bn a year bill for new FSA red tape

A TIDAL wave of red tape will cost the City up to £1.4bn a year, according to new research.

Regulations introduced over the past 12 months by the Financial Services Authority (FSA) will create compliance costs of £1.1bn to £1.4bn annually, Hargreaves Lansdown said.

City firms also face one-off implementation costs of £253m to £323m, according to FSA impact assessments, the pension consultancy said.

Hargreaves Lansdown said the FSA has launched 18 separate consultations on changes to the law since last October, prompting fears that smaller City businesses will be hit.

The new measures cover areas such as capital requirements, data collection, the handling of consumer complaints and financial crime.

Vince Cable, the business secretary, has repeatedly vowed to cut red tape for businesses – a pledge which has been echoed by his boss, Prime Minister David Cameron.