The line that Osborne is attempting to confiscate this cash windfall from the regulators in order to give it to "the taxpayer" is absolutely absurd. £59.5 million is equivalent to about £1 per head of population, hardly a windfall for the "taxpayer", however it could potentially be a huge amount for the UK anti-fraud investigator, who have been under sustained attack from the coalition government. In the wake of the global financial meltdown, one would have expected fraud regulators to be given more powers in order to prevent similar catastrophic failures from crashing the global economy, instead the SFO have suffered several years of severe budget cuts under the guise of "austerity". In 2008-09 their budget to investigate fraud (including within the £multi-trillion London financial sector) was just £51 million, but the Tories have reduced that to £33 million this year and project further cuts to £29 million by 2014-15.
Astonishingly it has been revealed that a SFO led criminal investigation into the manipulation of the Libor market had to be cancelled in 2011 due to the lack of funds created by Osborne's austerity measures. It seems that the Tories are intent on keeping to their neoliberal pseudo-economic dogma of reducing regulation, not by introducing further financial sector deregulations (which would be hugely unpopular with the electorate) but by starving the regulators of funding so that they can't even afford to investigate the financial crimes that they know are going on.
If the SFO were allowed to keep the £59.5 million fine and use it to fund more investigations into fraud and corruption in the financial sector, they could surely rake in more large fines and begin to appear as an effective deterrent. It should be a major source of embarrassment that 79% of the Barclays fine is to go straight across the pond to the American regulator (the SEC). How on Earth is it justifiable that the huge bulk of the fines go to America for a crime mainly committed by British bankers at a British bank on British soil?
If the British regulator was given the additional funding necessary to conduct their own investigations, rather than piggy-backing on the work of the American regulators, they could impose their own fines and perhaps even become self sustaining. However this will never be allowed to happen since the fraud ridden financial sector effectively own a controlling interest in the Tory party, hence George Osborne's decision to emaciate the UK regulations through "austerity measures" and his determination to ensure that the regulators do not get to keep even their small share of the Barclays fine.