A Conservative policy group is recommending a new focus on caveat emptor and lighter-touch pension regulation as well as a controversial plan to axe inheritance tax on primary residences.
The economic competitiveness report, published last week, also calls for the repeal of mortgage regulation on the basis that it is lenders rather than borrowers who take the risk, and for the Government to be able to disregard EU regulations it believes are not in the national interest.
It includes a proposal, first floated by group co-chairman John Redwood at a Money Marketing round table last year, for sophisticated investors to be able to sign a disclaimer enabling them to buy unregulated products at their own risk, without adviser liability.
The report says: “All businesses and some experienced investors could take themselves outside the regulated product net if they wished and would have to rely on civil and criminal law and their own abilities.”
It recommends that the Shadow Cabinet considers a new regulatory court for consumer complaints, similar to the small claims court, and a contract of consumer responsibility.
Launching the report, Shadow Chancellor George Osborne said: “Inheritance tax was designed to target the very rich but these days the very rich avoid it by hiring expensive tax advisers. It is an increasing number of ordinary homeowners who are hit by inheritance tax and that is unfair.”
The report calls for an end to forced annuitisation, a new flexible lifetime savings account and the encouragement of final-salary schemes through lighter touch regulation.
It says a Conservative Government should use the Financial Services and Markets Act to review whether the FSA is using guidance giving powers to best effect in helping firms comply with regulatory change.