Financial Conduct Authority Unite members have voted by 87% in support of industrial action against proposed cuts to pay and conditions.

Unite said that, unless a negotiated settlement is reached, it can now proceed to a full industrial action ballot.

The union claimed the pay cuts have been “championed by FCA chief executive Nikhil Rathi”.

It said they threaten to “damage the interests” of savers, borrowers, and businesses by creating a “bargain basement regulator”.

Unite general secretary officer Sharon Graham said: “The employees are telling FCA bosses that the proposed changes are damaging and destroying any remaining goodwill the staff had.

“It is time for the FCA management to come to the negotiating table and ensure they avoid damaging the important work of the regulator.

“Unite will sit down and negotiate through ACAS as soon as the FCA agrees; the ball is in FCA’s court now.

“While the proposed cuts at the regulator are good news for fraudsters and rip-off merchants it is bad news for people with savings, loans, mortgages and pensions as experienced and committed staff are being forced out of the door.

“The new FCA chief executive, Nikhil Rathi, should be waging war on malpractice in the financial sector, not on his own staff.”

Unite members agree that the FCA needs to reform its operations in order to provide the most effective possible service to consumers and businesses.

But the current proposals impose heavy cuts on ordinary staff while avoiding deeper structural reforms which might be uncomfortable for senior management.

The vote for industrial action came in a non-binding indicative ballot, held from 24 to 31 January.

The next step will be to hold a formal statutory ballot if Rathi “refuses to come to the negotiating table”.

Unite said it has approached the mediation service ACAS in an attempt to resolve the dispute.

An FCA spokesperson told Mortgage Strategy sister magazine Money Marketing: “The proposals in the consultation would ensure the FCA continues to provide one of the best, if not the best, employment packages of any regulator or enforcement agency in the UK.

“Under the proposals, most colleagues will receive base salary rises of at least 5% this year and 4% next, with many receiving significantly higher amounts. In particular, around 800 of our lowest paid colleagues would receive pay rises this year of, on average, £3,800.

“We have undertaken significant consultation with our colleagues on these proposed changes and expect to publish the outcome by March, following consideration by the FCA board.”