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Conservative backbenchers call for simplification of financial regulations

Andrea Leadsom TSC

A group of seven Conservative MPs is calling for simpler regulation of retail financial services including boiling down product disclosure to consumers into a single page of information.

A new report from the Free Enterprise Group also suggests care Isas with far higher contribution rates than the current Isa regime should be introduced to encourage families to save to cover the cost of long-term care.

It calls for working pensioners to pay national insurance contributions and for businesses with less than 3 staff and £75,000 turnover to be exempt from employment regulation, including auto-enrolment.

The MPs say FSA regulation has been an “overly bloated failure”, that increased regulatory activity has led to the idea of caveat emptor being abandoned and that the “mission creep” of the incoming Financial Conduct Authority should be limited.

It says: “Those of us who believe in free markets and free enterprise are faced with a big challenge when it comes to the market for consumer financial products. Human beings are generally bad at making decisions about money. In addition, the sellers of financial products almost inevitably know a great deal more about them than the buyer.

“Consumer paperwork should be limited to a maximum of 600 words in one page of big, bold print signed by buyer and seller. The regulatory savings should be passed on to the consumer in lower charges. It would be similar to a key facts document for mortgages.”

The report says: “State provision of social care does not encourage responsibility nor is it sustainable in the long-term. Instead we must argue that planning for potential care needs is every bit as important as planning for a pension.

The Free Enterprise Group includes Treasury select committee members Jesse Norman, David Ruffley and Andrea Leadsom (pictured), as well as Harriett Baldwin, Therese Coffey, Kwasi Kwarteng, Chris Skidmore and Elizabeth Truss.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Every time we have someone saying we need to simplify regulation we seem to end up with more of it.
    And why should anyone save anymore for long term care needs, after all, those who don’t have any assets or money, end up with free care.
    We have so much wrong with our social and economic system, but the worst of it is that those who put forward these schemes don’t need to worry, they can usually afford to save or in fact are independently wealthy already.

    If they really believed in a “free market and enterprise economy” the RDR commission ban would be scrapped and a more consumer friendly max commission agreement incepted so that there was a level playing field among all financial investment and savings products and consumers could do comparisons based on not just charges, but performance as well.

  2. More hot air from the politicians. The changes they propose will never happen because too many people in positions of power are earning too much money for doing a bad job and all stick together !

  3. How bizarre! For years IFAs have been saying that regulation is far too heavy. A panel of MPs say the same thing, and the first two comments are negative.
    There is an old saying that the enemy of my enemy is my friend. If seems that the financial world is into such self flagellation that they see everyone as an enemy.
    We know that MPs can blow a lot of hot air, but if some blow the same hot air as IFAs would it not look more intelligent to form alliances with them rather than call them names. Why fight with people who could be allies. Quite bizarre.

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