Financial sector has been riding a tide of regulation
The director general of think-tank the Institute of Economic Affairs hit out at mounting regulatory requirements, saying they contradicted the view that Britain’s financial industry is a hub of “devil-may-care, Wild West, free-market capitalism”.
Speaking to the UK Independence Party Conference in Westminster on 20 September, Mr Littlewood cited data analysed by the think-tank, which found the number of data entries supplied in reports has risen by 4900 per cent over the past 39 years, from 150 to 7500.
He also commented on figures cited earlier this year by Andrew Haldane, executive director of financial stability for the Bank of England, which suggested there is now one regulator for every 300 employees in the financial sector, compared to one for every 11,000 in 1980.
Mr Littlewood said: “I do not know how to describe such a legal framework in polite company, but it cannot be described as unregulated free-market capitalism.”
He also revealed that upcoming legislation will see the amount of information that needs to be reported by firms rise by at least 300 per cent, spread across 60 different regulatory forms.
Mr Littlewood said this increasingly onerous regulation in the financial sector testifies to the “enormous” amount of domestic reform needed in Whitehall.
Adding that the situation “has to change”, he suggested that this start with the overhaul of “antiquated and inflexible planning laws” which have made buying a home “a near impossible dream” for many young people.
Duncan Philp, senior consultant at Fife-based Macbeth Currie, said: “The advisory sector is completely over-regulated at present, which is ironic given that complaints against IFAs are at their lowest-ever level. Gordon Brown and Ed Balls presided over a complete deregulation of the banking sector, which has left the rest of us with a huge headache when the new FCA became more robust. We receive so many more emails and requests for information now from the regulator, but it is not proportionate.”
* There are 1200 supervisors for financial firms, up from 80 in 1979
* There are over a million paragraphs in the FSA handbook
* There will be a 300% increase in information needed in regulatory reporting