The report will be unveiled on Friday by Shadow Chancellor George Osborne and the Economic Competitiveness group’s co-chairman John Redwood but much has already been leaked to the media.
The proposals include a radical move to repeal much of the current regulation surrounding mortgages with the report suggesting that it is the lender not the consumer that is taking the risk.
It will also call for a simplified tax regime, the scrapping of home information packs, removing the responsibility for overseeing commercial banks from the FSA to the Bank of England and a raft of other measures aimed at cutting financial services red-tape.
John Redwood’s group, which was split into seven key themes, has spent over a year and a half investigating ways of improving the UK’s competitiveness taking representations from across the industry.
This included a trip by Redwood to the Money Marketing offices last year to hear concerns from IFAs over the current burden of regulation and to float the idea of a consumer disclaimer for high risk products that would absolve the adviser from future claims.
Osborne and Tory leader David Cameron are both backing the thrust of the report but the Party stresses that it will pick and choose individual polices rather than unilaterally support every recommendation.
The challenge is for the Party to prove its economic credentials to the City and financial services industry without being seen by the electorate as massively lurching to the right- something it may have failed to do so far judging by today’s headlines.
The Government has spent much of the last couple of years trumpeting its deregulatory agenda and former Economic Secretary to the Treasury Ed Balls worked hard to continue to build its relationship with the City- something his replacement Kitty Ussher has pledged to continue.
Redwood’s proposals are a clear attempt to prove to the industry that the Conservatives are once more “their” party and it will be interesting to see how many of the specific details are taken up by Cameron.
He will be keen to avoid the talk of a rift within the Party that appeared after the publication of its independent Tax Reform Commission last Autumn which recommended £21bn in tax cuts including scrapping IHT on primary residences.
One part of the report likely to have the support of the Shadow Cabinet is the recommendation regarding European regulation.
The report is likely to propose legislation to disapply EU regulation if the Government thinks it is against the national interest, fitting in with Cameron’s anti-Europe positioning.
This debate appears all the more relevant considering the growing recognition in recent months of the regulatory power and influence Europe has and will continue to have over the UK financial services industry.
Labour and the LibDems have been quick to attack the proposals with Business, Enterprise and Regulatory Reform Secretary John Hutton suggesting the report shows the Party lurching to the right and LibDem Shadow Chancellor Vince Cable branding them “spurious”.
But the industry will be hoping that, at the least, Redwood’s report will put pressure on the Government to keep its constant promises to deregulate wherever possible and ensure economic competitiveness is always central to its thinking.