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Field slams Govt disarray on FSA

Prime Minister Tony Blair’s calculated attack on the FSA shows the Government lacks a coherent strategy on the regulator, claims Tory Shadow Financial Secretary to the Treasury Mark Field.

The MP for London and Westminster says Blair’s stinging speech to the Institute for Public Policy Research in May – in which he acknowledged the damaging effect the FSA is widely perceived as having on efficient businesses – contrasts with Chancellor Gordon Brown’s view of the FSA as “a beacon of regulation”.

Field says the Government needs to decide what it thinks about the FSA rather than playing to a particular crowd.

“Blair is the ultimate political chameleon but what does he deliver? It is all right to say these things and claim to be on the side of the small businessman but New Labour has always been the party of corporatist Britain,” he says.

Field says the incident shows that Blair’s spin doctors and focus groups told him what people think about the FSA and he went along with it in a speech but he has done nothing to show how the situation can be rectified.

Field and Tory Shadow Chancellor George Osborne hope to meet with FSA chairman Sir Callum McCarthy in the autumn to discuss their vision for the regulator.

Field – who was appointed as Shadow Financial Secretary in May – says he has been getting a growing number of complaints from City prof- essionals about the effectiveness of the FSA and the regulatory burden placed on small businesses.

He says: “You need to have regulation that protects the consumer but it also needs to be flexible enough to allow for innovation and new products. Time and again from small businesses, I have been hearing that FSA regulation is overbearing.”

He claims that his experience as a small businessman, running a headhunting firm in the City, has given him ins- ide knowledge of the head-aches caused by heavy-han- ded regulation.

He wants a new remit for the FSA that puts competition and competitiveness at its heart, backed up by a lighter-touch regulatory framework, especially when working with high-net-worth individuals.

Pensions is another area troubling Field. He believes the forthcoming Turner report will be a damp squib, not because it will not say anything interest- ing but because Gordon Brown is unlikely to endorse any radicial moves.

Unlike Shadow Work and Pensions Secretary Malcolm Rifkind, Field believes compulsion cannot be ruled out. He says: “As a libertarian, I am instinctively against compulsion but if it is found that the only other option is higher taxes – a worse form of compulsion – then peoplemay have to accept it.”

He says recent reports on contracting out from the FSA and Which?, showing the losses that some investors have endured, are yet another example of mistakes made in pension policy and the need for a radical solution.

Field says the current pension system is reminiscent of a pyramid sales scam with people paying into a system which is unsustainable.

He says: “One of the biggest scams is the idea you are paying for yourself. Today’s youngsters are paying for today’s pensioners but, when their time comes, they will not get the benefit. There are too many people currently retired who have not put anything like enough money into the system, yet are reaping the benefits.”

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