I'm happy to read that George Osborne has carried through his pledge to dump the Financial Services Authority which has been the instrument used to stifle Britain's economy. Our ability to compete properly has been hampered with a bureaucratic straight-jacket straight out of Orwell's 1984 by the financial Gestapo for too long.
The mentality that a tick box society and a tick box financial sector is the way forward to economic recovery, is about as daft as you can get. When that sort of thinking prevails then it's time to shut shop because it belongs in the past and not in a free market. Ticking boxes is not a suitable replacement for skills, experience, brains, commonsense, and adequate controls of risk, and after all, it is 'risk' which is all it boils down to when looking to manage this country's future economic prospects.
When Gordon Brown created the giant monster FSA with teeth and claws but without a neck chain, he really created the equivalent of a monster which any fool would know would eventually be destructive. 'If' is a big word which we can use here when asking why Gordon Brown did not leave well alone in 1997 and instead not simply give the Bank of England further powers of oversight to the proper bodies which existed then which were based on self-regulation. Bodies such as the PIA, FIMBRA, MCCB and others, were then effectively giving adequate regulatory control to a sector which is made up of a myriad of different types of financial transactions within a sector encompassing investment, savings and mortgages, but had largely left unaccounted, many of the essential controls of the actual market which caused the problem. i.e. The Stock Exchange which took to buying, selling, and cross-selling DEBT.
Going back to the simple belief that you cannot continuously sell up something which has inherent risk, is sorely needed but never more than it is now. Don't these people know anything or is that plain fact not in their 'tick box'. You see, anything with a risk HAS to fall at some point and that's what's happened. The risk however in this case was so mismanaged that no one even bothered looking to actually measure the risk incurred of cross-selling mortgages and loans into unentangleable derivatives, and even the credit houses didn't know what was inside those financial instruments yet happily took the money for doing a worthless job of ticking boxes.
Instead of managing the larger risk area under the Bank of England with people who were experienced, Gordon Brown took to micro-management of the larger economy with a tick box regulator which acted like an uncontrollable monster. Yet there was little or no regulation of socially and economically problematic areas of finance such as credit cards and both secured and unsecured loans, which generally caused more concern for the public and a greater deal of pain to the economy itself when the chips were down when people were unable to meet their loan payments.
A simple regulation of these could of course have been to make it mandatory that a borrower should pay a premium to insure the possibility of default coupled with rules which made it mandatory for an insurer to actually pay out. So many of these tend to wriggle out when faced with a claim it is quite unbelievable yet no rules were ever made to protect the consumer in this way. Thus, many were ripped off and left unable to meet loan payments when an insurer found a wriggle hole to creep through if a defaulter had lost income through loss of a job or having been placed on short time. i.e. Short-time, less income, still have your job, no pay out, sorry no protection!
So as the FSA took on board European Directives which neither it or most the industry experts understood, it simply passed the buck of responsibility to businesses with its own directive which made the business responsible itself for understanding and implementing the directives. All 10,000+ of them!
The European Directives, which you'd need a chair to stand on to read if they were placed on top of one another, were quite simply fake. They were never in a month of Sunday's going to make an already smooth running business more fair to consumers or more profitable or productive, and nor were they ever going to give the consumer more protection or permit the internal economy to grow on the back of spending.
Again, the internal economy being based on raising finance, spending and debt, was also never going to be the means to create economic wealth for the country or for the public either, who only saw house prices going up up up, and the gap between income and their ability to afford a mortgage, getting bigger until it became unaffordable to buy a home.
George Osborne may be on to something with his new system which places responsibility back into finance as it at least tells us who is ultimately responsible for it. But alas he has not had the vision to see that the real remedy to our economic woes is to help bring about the economic circumstances which will recreate our manufacturing base. Then, and only then, will it be possible for the internal economy to produce real growth as a result of people borrowing money which should rely more heavily on consuming goods that we produce ourselves as opposed to foreign imports, for that is where JOBS lie, which are essential if Britain is ever to recover economically and socially in a departure from ticking boxes to the entrepreneurial empire we once were before Brown's era of economic madness.
Britain must be both a manufacturing AND a service economy if we are to pay down national debt, and ticking boxes and placing square pegs into round holes like Hector Sants at the Bank of England, just won't be enough on their own to regain a full economic recovery which must also be coupled with a social recovery if it is to be worth the risk people will be asked to take to SPEND, which without we will remain in a bust economy! People have to be given a reason to risk tomorrow's future today and a lack of work is one sure fire way of preventing them taking such a risk with a loan of any size.
The European Union will of course keep digging its heels in to have its plan in place to have Britain in that tick box union, and only argument or appeasement can prevail if we remain. Cameron says there are things which happen there which are in Britain's best interest but he cannot name any. Try naming the 'benefits' of being unable to manage your own economy Mr Cameron and then tell us what they are!
What better way forward is there than the way which made this country the 4th biggest economy in the world under Margaret Thatcher but with less of the 'privatised growth' which happens to require taxes to fund it? How is it a good benefit to privatise every enterprise in Britain with the loss of jobs, lower wages, 'people who will work for less and do jobs Brits won't do', when those people (immigrants) will require more road space, more hospitals, more schools and more prisons?
What better way forward is there for ANY country, than it to have the ability to move forward in free competition with others, with its own money supply, its own manufacturing base, its own rules on internal finance, its own people, and its own ability to create jobs which will give the PEOPLE more wealth and confidence and will promote THEM first rather then promoting the incompetent and destructive influence of political and economic bureaucrats who haven't the first clue about what society and our economy actually needs.
Abolition of a tick box society is only the first step in our recovery but there's a long way to go yet if Britain is to be saved from complete destruction, and if it remains within a union with an aim of controlling free enterprise unless it's in the box, then we will remain doomed to fail just as the EU has failed.
Cameron must have the guts to remove us from the European Union if Britain is to survive, or he must at least say that he will refuse to attend ANY discussions on furthering this country into the tick box mentality of Europe, for that is truly our way out of economic failure and total bankruptcy.
We are not 'all in this together', we are a free nation of free people who must be given the choice to decide our own destiny.
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