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Brown ready to cut red tape

The Chancellor’s pre-Budget reports are often pretty uninteresting affairs but this may not hold true next week.

Gordon Brown has embraced deregulation with unexpected zeal and much of it will focus on financial services.

Financial services will see 10 simplification and deregulation measures which will cut the amount of information, forms and reporting requirements.

As part of these measures, FSA consultations may be cut by as many as 20 a year.

Brown is also bidding to prevent any further gold-plating of European Union directives and other measures. At least, this should stop some recent fiascos involving directives which have needlessly threatened to increase professional indemnity insur- ance requirements and capital requirements.

Most IFAs will very much welcome the news. Almost all advisers believe there is a need for regulation but that it has gone awry, adding to their workload but in many cases not significantly protecting clients.

Many new regulations have led to questionable increases in form-filling which most customers will not bother to read. Advisers’ records may be correct and their advice conform to what the regulator wants but whether consumers are better informed is debatable.

It is unlikely that the new measures will bring a significant retreat or reworking of existing regulations. Anyone hoping for a shorter KFI or a meaningful menu of charges with an accurate market average will be disappointed.

It is not very likely that Chancellor Brown is going to suggest that mortgage regulation was a bad idea all along and tear it up.

But maybe this is not such bad news. Regulation that gets rid of the cowboys in financial services is a good thing. Everyone’s repu-tation is enhanced while consu-mer confidence is improved as a result but it seems increasingly to be getting rid of the good guys too because it costs too much.

Plans for better, targeted, fairer and cheaper regulation for the industry would be exciting. Next week will probably not bring that about but it is still good news in prospect.


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