Qui bono? literally means ‘who benefits?’. It is a legal concept used in many European countries. Does the accused have anything to benefit from his crime? So if we are talking about regulation – Qui bono?
Well, it is not the consumer who has experienced a 25-fold increase in immediate regulatory costs in the past 16 years and a 78 per cent increase in the lifetime of this parliament while 16 million consumers have lost their adviser.
In fact consumers have one purpose in regulation – as unwilling funders of an unaccountable regime.
Qui bono? Well the regulators do well. The prime minister earns £142,000 a year. How many FCA staff receive larger salaries? We know 194 earn more than £100,000, so 100 could easily be earning more than our PM.
Could they do better in business? After being at the regulator and making valuable contacts, maybe. But how many other regulators are paid way in excess of their market rate?
But who really receives the Qui Bono Award? I would suggest “group think”, aka Whitehall and its supporters. They want total control of a big-government centre-left regime that organises our lives. No wonder it and its supporters love the EU.
Let us examine the true dangers that consumers face. The biggest is apathy – consumers with the funds to invest and protect, but do not do so. The retail distribution review has made this demonstrably worse by thrusting more people into the hands of the government.
The next is government ineptitude – we are ruled by a self-selecting elite who are strong on policy but terminally weak on delivery. For instance, George Osborne wants to liberate pensions. Fine. But how is this going to be delivered with 13,000 fewer advisers? When the inevitable collapse happens, who gets the blame? Not Whitehall, that is for sure. Expect Pensions Review 2.
Similarly, we have a financially incontinent political class incapable of fiscal responsibility. Inevitably, when confidence collapses and the market adjusts, who will get the blame? Again, not Whitehall.
The smallest risk to the consumer is financial advice. Post RDR, 84 per cent of the public do not even use advisers. That does not stop a £600m industry being created to control it.
The prime purpose of regulation is to deflect blame from Whitehall to the financial services industry, which is too busy fighting internally to do anything about it.
We can and should do better.
Garry Heath is the editor of the Heath Report
