The high-level Government support came on the heels of the FCA’s announcement on 16 October that it intends to increase the FOS limit by £200,000 to £350,000.

Mr Hammond said the plans in place to extend access to the ombudsman for SMEs were underway, and that “FOS will now take steps to ensure they have the necessary skills and processes in place to handle these new cases.”

SMEs with an annual turnover below £6.5m and with fewer than 50 employees, or an annual balance sheet under £5m can refer unresolved complaints to FOS as of this month.

When the FCA announced the changes, chief executive, Andrew Bailey, said: “We recognise it is vitally important for SMEs to have a mechanism to resolve disputes and we are clear the Financial Ombudsman Service is the right route for this. 

“The changes we are making are as far as we think we should go within our powers, but they will provide access to the ombudsman service for a significant number of smaller businesses.

“Before this their only option was potentially a costly legal one through the courts.

“The changes are an important extension of the ombudsman service’s role and remit. 

“We will work closely with them to ensure that they are ready, so that SMEs are able to benefit from the new rules as soon as they come into force.”

The regulator revealed it intends to publish final rules later this year, following its normal scrutiny of the ombudsman service’s draft business plan and budget. 

It expects the final rules on the SME extension to come into force on 1 April next year.