Labour's crass inability to govern in the public interest is becoming ever more apparent. The FT has provided another example this morning when reporting that:
City minister Tulip Siddiq has signalled the UK financial watchdog needs to do more to address industry fears about its plan to name more of the companies it investigates even after limiting the proposals.
They added:
The Financial Conduct Authority last week presented watered down proposals to identify more companies that are under investigation before it has made a decision on whether any wrongdoing has occurred.
Contextually, they noted:
The plans, which the FCA argues will bring it in line with other UK regulators, protect consumers and reassure whistleblowers, have infuriated many financial executives and drawn criticism from both Labour and Conservative politicians since they were first presented in March.
Let me add a little further context. The FCA is a failed regulator, captured long ago by the City entities it is supposed to police, and undertaking a tiny number of largely ineffective investigations each year. It has been subject to significant parliamentary criticism. In an attempt to up its game it announced earlier this year that it would increase the number of investigations it undertakes, and because, if it found reason to investigate there must be cause for concern meaning that the public needed to be aware of that fact, it would announce who it was investigating and why before the full facts of the matter were established. Anyone would have thought that an entity whose job it is to protect the consumer would be right to do just that.
But, the City has long thought the FCA exists to whitewash its behaviour.
And now Labour has sided with the City against the consumer. I might have added ‘of course' into that last sentence, because given everything that Labour does not now stand for this was inevitable. When presented with a choice between protecting people or the City of London it has, inevitably, chosen the City.
I suggested in another post this morning that Labour does not care. I should have made clear, it does not care about people. It does care about the City.
I have also suggested this morning that neoliberal government rots from the head down. That is exactly what Labour is doing.
This government has already proved it is rotten. We do, unfortunately, have to suffer it for years as yet.
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Bad news all around.
It shows us just how much the idea of justified ‘state intervention’ has been turned into state ‘interference’ by the ideologies you name above.
Regulation – something – that is done to one has become, ‘self regulation’, a complete nonsense as a term and in practice.
The thing is, the trust that is placed in the City and it’s institutions by politicians is simply undeserved and can only be explained IMHO by a simple term: Corruption.
Thank you, PSR.
I just add the media.
I began working in regulatory policy in July 2007 and noticed the number of former journalists working for firms or their advisers. This goes back to the 1990s when some journalists, like the BBC’s Michael Cole, went to work for corporates.
As legacy media withers, one notices more migration. A friend left Bloomberg a decade ago for Fidelity.
Readers and Richard may have come across: https://www.cornwalllive.com/news/celebs-tv/clive-myrie-apologises-not-declaring-9767511. I come across a lot of this and have wondered how much they make and don’t declare. It’s a scandal. I’ve known about Myrie for years. It also explains the line of questioning and why the likes of Richard are not on the airwaves.
Thank you and well said, Richard.
A fortnight ago, at a City event, I heard former trade body colleagues say they meet either the Treasury or No 10 weekly, usually the Treasury, and had 90% of their recommendations accepted. This was one of the items on the City shopping list.
“The FCA is a failed regulator, captured long ago by the City entities it is supposed to police, and undertaking a tiny number of largely ineffective investigations each year”.
The Financial Services Authority (FSA) was the predecessor to the Financial Conduct Authority (FCA). The FSA was abolished in 2013, when it demonstrated it had failed in the financial crash, and the FCA created. Here is how it works. Failure is designed into the system. What the FSA did was regulate as little as possible, but the financial crash was such an egregious failure of the industry it regulated it had to do something; so it applied fines. The FSA produced a regular list of the financial institutions it regularly fined; £Billions (it looked big money if you didn’t know anything about the money volume scale of the City). Actually the fines were set to provide fines for failure at a level that operated as a viable ‘cost of doing business’. The FSA was so useless a regulator, the government had to act, in 2013. It was embarrassing. Embarrassing like Grenfell and Building Regulations. Embarrassing like the old ‘Department of Agriculture and Fisheries’, which regulated agriculture and fisheries so badly in the interests of their industries so obviously, it was abolished in 2002, and DEFRA created. Britain prefers self-regulation, so that there is no regulation at all. The Post Office is illustrative. Regulation is designed to fail.
Even when regulation fails, and the Government throws its hands in the air and starts claiming it will compensate the people who have been ripped-off or ruined, the Government finds some way to drag its feet and not pay up. Look at the Postmasters, the Blood Scandal victims. I could go on.
British regulators are designed to fail. Why? It serves neoliberal politics well, because for them scrutiny and regulation of what you are really up to is morally wrong. The only moral failure in neoliberalism is being found out.
I learned more than a decade ago that UK “regulators” (chocolate teapots) were not there to protect ME, as a citizen, but to assist organisations and institutions maintain an appearance of compliance to the legislation.
In encounters with ICO (extensive & prolonged) & FSA/FCA, it was a shock to discover that they had no statutory responsibility to ME, as a complainant, didn’t have to keep me informed, or let me know the outcome of any complaint I had made. Any information they gave me would be at their discretion.
I’m older, wiser and much more cynical now, which I regret.
Not only is Labour rotten on FCA and City regulation – but we can also count on @BBC ‘Verify’ (sic) not doing an in depth investigation .
But isn’t ‘Regulation’ – often a cover or smokescreen? It’s the rules that organisations are being regulated against that should be the focus.
The 2008 crash wasn’t because banks weren’t obeying the rules – the rules had been progressively eased so as to faciliate the high risk activities which produced the catastrophy.
Tulip’s actions are no surprise – Labour has indicated its inclination to ‘ease’ the rules affecting the City (‘the jewel in our crown’) – eg bonuses.
‘Deregulation’ often produces more, not less regulators – as the regulated institutions often invent their own regulators.
Can punters make sense of this little copse of financial regulators:
– FCA Financial Conduct Authority
-FSCS Financial Services Compensation Scheme
– FOS Financial Ombudsman Service
-PRA Prudential Regulation Authority
Labour are a bit like the Israel govt ministers proclaiming their genocidal aims – Labour has proudly advertised its admiration forf the City and performs its fawning rituals in public.
Thank you, Andrew.
I have heard, in person, Starmer and Reeves tell City audiences that “the City is a force for good” and “Labour has the City’s back” and “Labour considers the City to be the UK’s most strategically important sector”. I have observed Labour’s fawning, naivete and neediness and was disgusted and bemused in equal measure.
The Mansion House speech was all that and more
Mr Broadbent, did you mean to write “copse of financial regulators”, or “corpse of financial regulators”?
They have willfully decided to ignore the lessons of 2008. We will soon be back in Gordon Brown territoty c. 2005, i.e. a Labour chancellor boasting about their “light-touch” regulation of the bottom-feeders in the Square Mile.
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