Press reports on the king’s speech, including in the Guardian (The king’s speech: what is the government’s legislative agenda for the next 12 months?, 13 May), gave little coverage to the proposed enhancing financial services bill, a central part of which will downgrade the role of the Financial Ombudsman Service (FOS).
Cloaked in the guise of “modernisation”, the proposals reflect pure interest-group lobbying by the finance industry, which already exercises substantial influence on policy. Given that the costs of consumer redress may be concentrated in a few large firms, they have a strong incentive to participate in the policy process. In contrast, consumers of financial products have diffuse concerns and more limited expertise, and face high organisational costs.
One might expect, therefore, that independent empirical and social science evidence would play a key role for the government in assessing reform proposals. Yet this did not occur here, and indeed the Treasury seemed to accept without question industry claims concerning the FOS, making little attempt to assess reviews of its work or explore its role in the financial regulatory system. The policy outcome is therefore likely to be at best an exercise in accidental wisdom.
Iain Ramsay
Emeritus professor of law, Kent Law School, University of Kent
• Have an opinion on anything you’ve read in the Guardian today? Please email us your letter and it will be considered for publication in our letters section.
