The head of the Financial Services Authority’s consumer group quit yesterday after the City regulator refused to allocate him more resources.

Lord Lipsey, who announced his resignation as head of the Financial Services Consumer Panel after less than six months in the job, told The Times: “Restoring confidence at the moment requires a consumer champion, and that’s something the FSA Consumer Panel won’t be able to do.”Lord Lipsey wanted the panel to get more wide-ranging powers to lobby and broadcast its views on financial issues. He also called for more resources for the panel, which takes about £380,000 of an overall FSA budget of £323 million last year.

The panel traditionally advises the FSA on the consumer point of view on its policies but does not lobby government itself.

Lord Lipsey said in his resignation letter: “Over my six months in office, I have sought to promote a significant change of role for the panel to tackle consumer financial services issues in a broader sense. This has become more urgent in my view as a result of the blow to consumer confidence resulting from the financial crisis. This approach has not won the support of the FSA or of the panel as a whole.”

Lord Turner of Ecchinswell, the FSA chairman, said: “In addition to the traditional activities of the Consumer Panel, [Lord Lipsey] has proposed a much wider remit, with a role across a wide lobbying agenda supported by greatly increased resources. The members of the Consumer Panel did not, however, share his belief that this changed and wider role was appropriate, nor did the FSA believe that the change from the existing role was required.”

Lord Lipsey, who chairs the Social Market Foundation, will officially leave on Tuesday. A replacement has not yet been appointed and Adam Phillips, the vice-chairman, will step up temporarily.

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