Conservative Parliamentary candidate for North Devon Philip Milton claims he warned the regulator of potential problems at Northern Rock years before it hit problems.
Milton, who is managing director of IFA firm Philip J Milton & Company, says the FSA and the Labour Government lacked industry insight and were unable to protect the market.
He says: “We wrote to the FSA years before Northern Rock was pulled under because we were concerned, as a firm of financial advisers, at what was happening. A local estate agent said at the time that a number of valuation requests were coming through from Northern Rock based on six times earnings and 125 per cent LTV. I knew and she knew that could cause potential problems, so what was the regulator doing?”
Milton is critical of Labour, saying it took far too long to take any action once the problems at Northern Rock emerged.
He says: “How many weeks was it before the Government took some action? The uncertainty was ridiculous. Labour was like a rabbit caught in headlights – it did not know what to do. The easy option was to do nothing until it was too late.”
Milton insists that for a regulator to be effective, it must take on more representatives from the sectors it governs.
He also says more MPs need to come from the financial services industry. He says: “When I asked the regulator how many approved persons there are in the Houses of Parliament, they were not able to answer the question.”
Milton needs to overturn a Liberal Democrat majority of 4,972 to get elected.
He does not yet know if he would play a role in the creation of the consumer protection agency, the Tories’ planned replacement for the FSA, if he and the Conservatives are elected.
But he says he is keen to impart his knowledge of financial services during the development stages.
Milton, who has run his own firm for 25 years, says he has more financial qualifications and practical business experience than LibDem Shadow Chancellor Vince Cable.
He says: “I am certainly not suggesting that I am going to be Chancellor of the Exchequer but I would like to feel that, even in a minor way as a North Devon constituency member of Parliament, I would be able to have some input and obviously I have some significant ideas that I would like to feed through the system.”
Milton says he is certain that a Conservative Government would lead to better outcomes for IFAs, adding that historically the Conservatives have shown themselves to be more connected to business and the financial markets.
He says, with a Tory Government, there would be several former financial services practitioners and approved persons in the House of Commons. But he is concerned that a hung Parliament, or “strangled Parliament”, in his words, would lead to uncertainty in financial markets.
He says: “This perception that there is this balanced arr-angement where the best ideas from all the parties get thrown into a pot and we wind up with a utopian ideal is not how it happens.
“If we think about the investment markets, they hate one thing more than anything else – uncertainly. A strangled Parliament will create uncertainty in the home market but more than anything it will create uncertainty in the international financial sphere.
“Then we will find two things happen – we will get downgraded pretty quickly and the pound will probably plummet even further. They will both work very badly against us.”