12th May 2009

"Look out kid; it's something that you did"!!

MPs are currently undergoing a morality examination by the media and those constituents they serve- for very good reasons and some may say about time too. With the current all party daily wave of MP expense scandals hitting the “fan” and the mantra of “it is within the rules” as a justification, the public and even MPs are quite rightly demanding that if the rules are the problem then change the rules.

The defence by MPs those abuses of the kind exposed by the Daily Telegraph (click here for more information) were “within the rules” is akin to the Nuremberg defences offered by various Nazis in the dock when they stated as a justification of their actions that they were only “acting under orders”!

So, the rules are wrong they say, let’s change them they say!

While they are at it, this should highlight a lot of areas in UK financial services regulation plus related areas of the legal system that desperately need attention now too.

The FSA and the FOS are taking your money plus that of the taxpayer and spending it in an often unchecked and unaccountable way on major regulatory changes. Much of this is done with very little consultation at the grass roots level of the industry, on the basis that the FSMA rules allow them to do so. In particular, one could cite the direction that RDR is taking or the fact that the FOS, given a mandate by the FSA, can write rules overriding past Ombudsman’s scheme rules and guidelines whilst riding roughshod over the law of the land (the 15 year longstop and the processes of UK civil court system to name but two) on the grounds that the “rules allow it” qualifying this with the grandstanding statement from the FOS that “we make the law”!

As the scales are falling from the once blind eyes of MPs, we can only hope that this miracle will transmit itself like a virulent version of Swine Flu to Canary Wharf to ensure a rapid fix of all that is rotten (and I am sure when we dig around much will found to be just that) within the FSA and the FOS.

Finally, for IFAs and in particular the members of the AIFA, it is sad to see that that AIFA chairman and Conservative MP John Gummer has been dragged into the expenses row for claiming �£9,000 on gardening. Given this situation I would hope that Chris Cummings, for the sake of good order, will take a close look at the expenses Mr. Gummer may have claimed whilst in the chair and perhaps whilst doing so make a freedom of information request to the FSA and the FOS regarding an individual breakdown of staff expenses from the top down.

In the words of Bob Dylan’ Subterranean Homesick Blues (click here)“Keep a clean nose, watch the plain clothes, you don’t need a weatherman to see which way the wind blows”.

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