You couldn't have made it up. For years the City has been moaning about the excess regulation and red tape imposed by the Government. Then the Financial Services Authority (FSA) suggests it removes the imposition of compulsory exams and approval for people working in wholesale banking, a move that would save millions of pounds and endless paper pushing, and the City bosses turn round and say that this isn't what they wanted at all. They believe in this sort of regulation.
Typical, you might say. Business wants less regulation only up to a point. Insisting on professional qualifications has the inestimable value not only of keeping out the wide boys but also of enabling the existing members to preserve their position by restricting access to the club. The guilds, after all, started as monopolies in the crafts and the spirit lives on.
In this case the City has a point, and it's a much broader one than the requirements to work as an investment banker. Over the last decade, governments of all sorts have got themselves into a mess over regulation and it's a mess that is getting more confused.
You only have to look at the case of Ruth Kelly and the paedophile teachers to see the point. Ministers are desperate to get out of this responsibility for the individual decisions on who should or should not be allowed to teach, but the profession and the public are equally determined that standards should be kept and that someone be held responsible if it goes wrong.
At the heart of the problem lies the increasing collapse in public trust, and Government support for self-regulation in the professions. From within it has come under pressure from the speed of change and the erosion of traditional boundaries. Banking is but the most obvious example of an industry where the old separation of jobs, and regulation, between retail and investment banking, broking and trading have been made redundant by technology, globalisation and competition.
It is becoming equally true of the division in law between solicitors and barristers and in medicine between nurses, doctors and consultants. The roles are merging, the trade is becoming more and more open to competition from pharmacies and internet self-help. Self-regulation is seen as a thing of the past, an obstacle to new development. Which then leaves the question of who is to impose standards?
For while this has been going on, the customer, and the public at large, has demanded ever greater reassurance about the delivery of services and ever more stringent accountability from someone, if not the profession itself then the Government.
You can decry this trend as part of a "blame culture". Many do. But it is a fact of life. Communication has opened up the professions to public scrutiny and has raised expectations as to what they ought to be providing.
Add to that a series of scandals in the medical world about the disposal of body parts and the cover up of incompetent surgeons, let alone the problems of miss-selling of pensions and straight fraud in the City, and it is little wonder that the ability of the professions to police themselves has been called into question.
A decade ago, the answer seemed obvious. The Government was going to have to step in with direct regulation backed by law. Which is exactly where New Labour seemed to be heading when it came to power. Tougher regulation of the City, new rules for doctors, root-and-branch reform of the legal profession were all in its sights.
Government was there not as an umpire but as a scourge to force the professions to face up to their responsibilities, drop their restrictive practices and modernise their structures.
All of which would be fine except that the last thing ministers, let alone the Prime Minister, want is direct responsibility themselves. The agent of change, fine. The person who could be held responsible if things went wrong, never. Instead, the Government has ploughed on reacting to each crisis as it has occurred by putting more pressure on the self-regulatory authorities while withdrawing public support from them.
The FSA has been set up to combine and concentrate regulations of the City. But as soon as the City power has squeaked, the Prime Minister has publicly distanced himself from it.
To the existing structure of the Law Society and Bar Council, the Government is now proposing to add a new supervisory authority in the Legal Services Board, which will oversee their regulatory work and punish them by removing bits of their authority if they are deemed to fail on any case.
All this would be all right if it were intended to improve regulation and better safeguard the consumer. But it isn't. It's primary purpose is to push responsibility on to independent or semi-independent bodies and take the burden off the shoulders of ministers. Almost everything that is being done is in the negative spirit of blame and punishment.
That's not what it should be about. Take the case of the FSA and approvals for people working in the wholesale market. Of course you can say it is in the area of the business with no direct contact with the retail customer. But it is at the heart of a business essential to the City and the country's success as a financial centre. Imposing minimum standards on operators is not a burden. It actually contributes to the standing and the operation of the industry.Reuse content