The final report of the Insolvency Review Working Party (IRWP) is the last throw of the dying ethos of regulation of vested interests by vested interests in the interest of vested interests.
It ignores New Labour’s new principle of independent regulation, and instead prioritises the interests of the industry over the consumer. Little else could be expected from a working party appointed by the last government controlled by the present regulatory bodies and happy to ignore all the scandals. But the report already looks desperately out of date as we move towards independent regulation in financial services.
The IRWP had no one to represent the interests of bank depositors, pension scheme members, small businesses, employees, or any other stakeholder.
None of its meetings were open to those affected by insolvency. It presents no analysis of systemic failures and problems. There are no proclaimed principles or case studies, and there is no assessment of the quality of work. The IRWP does not care about any of that.
Some 12 million people in the UK are unable to afford access to the law.
These include entrepreneurs whose businesses are confiscated by insolvency practitioners. Banks, pension schemes, the police and the financial services sellers all have independent ombudsmen and compensation schemes.
The IRWP does not want either. Why not?
Today, eight overlapping regulators regulate some 1,800 insolvency practitioners.
This is regulatory overkill. And yet the IRWP wants to add still more unaccountable quangos, such as its Insolvency Practices Council.
The only excuse for the report is that it doesn’t need legislation. There is no reason for implementing something half-baked in an industry already seen as selfish and unaccountable and which will be viewed as becoming even more so as the coming recession increases its business.
The committee has wasted its own time and ours trudging down a dead-end street. Now we’ll have to start all over again. Towards independent regulation.
Austin Mitchell is Labour MP for Great Grimsby
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