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Budget 2011: Experts hail industry consultation

Wednesday’s Budget has been hailed for relying on industry consultation which experts suggest will result in better policy.

MAC Consulting chief executive Mark Chilton says consultation periods allow flaws in proposals to be drawn out.

He says: “We have suffered particularly in taxation, but at a broader level too, from poor regulation and legislation in the past because the Government has not consulted with the outside world and has not revealed all the consequences.”

Last year, the Government launched a consultation on plans to reduce the annual pension tax allowance from £255,000 to £50,000 and Chilton says this provides a good example of consultation improving legislation.

He says: “As a result, add- itional legislation was published enabling individuals to meet potential high ann- ual charges from their pen- sion benefits rather than as a straight tax.”

Independent consultant Colin Jelley says late engagement with the private sector in the past sometimes made it difficult for policy to change.

He says: “If you are a minister and you announce your policy and some smart guy comes along saying actually the consequences are this, you are likely to think, well, I can see that is a stupid consequence but if I change my mind I am going to look a complete twit.”

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  1. To put it mildly, it’s rather a shame that the FSA’s consultations with the industry it claims to regulate amount to little more than exercises in mere tokenism and that it refuses steadfastly to publish for all to see and to debate the responses it receives. Instead, it prefers merely to issue bland and vague statements to the effect that it’s “taken them on board”, whilst in practice neither modifying or reconsidering its proposals one iota.

    From the Statutory Code of Practice For Regulators:-

    “The duty on a regulator to “have regard to” the Code means that the regulator must take into account the Code’s provisions and give them due weight in developing their policies or principles or in setting standards or giving guidance.” And

    “Regulators should keep under review their regulatory activities and interventions with a view to considering the extent to which it would be appropriate to remove or reduce the regulatory burdens they impose.” And

    “Regulators should consult and involve regulated entities and other interested parties in designing their risk methodologies, and publish details of the methodologies.”

    Are you listning FSA? Nope, thought not.

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