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Tuesday, 9 June 2009

Gold-Plating The Consumer Credit Directive

Yep, the UK's bureaucratic alchemists are at it again, folks. They've taken a leaden, ill-conceived Consumer Credit Directive (2008/48/EC) and extended its application to UK products that are out of scope, "in order to maintain a comprehensive, homogenous set of rules" (see para 1.9), while rigidly interpreting many terms not defined in the CCD to further complicate the awkwardly prescriptive consumer credit regime.

Add to that over 100 pages of impenetrable bureaucratic mumbo jumbo, 68 incredibly complex questions and an implementation deadline of June 2010, and say goodbye to any more retail financial services innovation for at least 2 years while we try to resolve all the uncertainty.

Moreover, the complexity of the one-size-fits-all regime being proposed, save for a 'light-touch' exemption for bank-only overdrafts, will give banks an even greater advantage over non-banks in providing consumer credit. Product development will be constrained by a complex and awkward regulatory regime, leaving many consumers with overdrafts (or loan sharks) as the 'easiest option'. In turn, consumers will be exposed to tighter credit conditions being imposed by banks, who will enjoy an advantage in 'up-selling' their own credit products to the more creditworthy.

Overall, the result will be less choice and poorer value for consumers, and a feast for banks and loan sharks alike.

Gareth Thomas, the Minster responsible, has a lot of explaining to do. But maybe he figures it's all over for him, anyway?

Meanwhile, the so-called "Better Regulation Executive" appears to be sleeping peacefully, secure in the assumption that all this nonsense delivers on a commitment to regulation that is:
  • "transparent" - this extended scope was not revealed as the UK's intention when the CCD was consulted upon at EU level.

  • "accountable" - why should national bureaucrats decide the scope of an EU law?

  • "proportionate" - but it goes beyond the scope of the CCD, and is therefore disproportionate.

  • "consistent" - but it's inconsistent with the CCD, and as such fails to deliver a "harmonised" or consistent cross-border credit market, which the CCD was (misguidedly) intended to catalyse (see Article 22).

  • "targeted" – far from it, these are explicitly described as a "homogenous" set of rules.
Wakey-wakey everyone...

Is Your Mobile Number in This Directory?

I was stunned to learn from El Reg, that Connectivity Limited, trading as 118800, has "worked closely with the regulatory authorities" in launching "the only directory with millions of mobile numbers" in it. When you want to track down someone's mobile number, you enter the poor unfortunate's details and if 118800 has the number, this crowd will text the person a message to call you.

WTF?! This is hardly innovative or useful to anyone except stalkers and cold callers. If I wanted people to whom I haven't given my mobile number to be able to call my mobile, I'd publish the number myself and they could Google it, or find it on Facebook or wherever. But I don't. And I stopped publishing my home number for the same reason years ago.

Naturally, one of the FAQs is "How the !*&% did you get my mobile number?" (not), and their answer is:
"Our mobile phone directory is made up from various sources. Generally it comes from companies who collect mobile telephone numbers from customers in the course of doing business and have been given permission by the customers to share those numbers."
Well, I'm sorry, but I can tell this crowd right now that NEVER in all my years of giving out my mobile number, did I foresee or intend that I was consenting to its inclusion in this type of service. And I hate that they have put me in a position where I have to go to the trouble of telling them to delete me from their systems.

The Information Commissioner is reported as saying this service is no different to the practice of selling marketing lists. But this is vastly different in scale, accessibility and because the people who sell marketing lists don't text you every time someone buys the list or wants to send you junk mail.

The Commissioner needs to get a grip.

Meanwhile, time to register the mobile number on the Telephone Preference Service.

Monday, 8 June 2009

How To Find An Extra £8bn - Fast!

They've been desperately downing the Kool Aid in Downing Street, those who are left. No more polite chat while queuing for the tea urn during cabinet meetings, cup and saucer in hand. Now they're swarming around it at each serving, ripping the lid off and plunging their cups in.

And while we are highly amused by Gordo's ghastly predicament, we are no longer to be distracted from his latest, clunking sleight of hand.

The TaxPayers' Alliance has all the gory details, but at the heart of the matter is the fact that the UK will now officially have two sets of books, as the FT faithfully reported in mid-May while we were still goggle-eyed by certain accounting matters of a more personal nature.

One set of books will be produced under international financial reporting standards to fulfil the Treasury's "promise" to record PFI projects against government's capital expenditure totals; and another will be prepared under European standards, which doesn't bake in the cost of PFI.

I do not need to point out which set of books the Treasury uses for budgetary purposes... Nor do I need to remind you that even the off balance sheet deals are getting bailed out with taxpayer's money.

So, for a start, 60% of PFI projects will remain off balance sheet. But that's not all:
Nick Prior, head of government and infrastructure at the consultants Deloitte, said: "This clarification is extremely welcome for the future of PFI and PPPs. Government departments should now be able to bring forward projects that have been delayed because of uncertainty over budgetary arrangements."
That's £8bn worth of "uncertainty" to me and you, but not even a line item for Darling, if and when he gets up on his hind legs to deliver the next budget.

Let's hope MPs don't forget to mention the fact...

Wednesday, 3 June 2009

Parliamentary Reform Must Be A Messy Process

Over on Lords of the Blog we've been debating whether Constitutional reform is the answer to our Parliamentary woes. "Lordnorton" bemoans the fact that "a great many people have reform agenda, but agenda that have little coherence... We need to look at Parliament, and indeed our constitutional arrangements, holistically." He's called for a commission on the constitution, "open to all, not just the usual suspects; new technology provides the means for wide consultation. The main challenge will not be employing the new technology, but rather persuading people to submit their views."

I agree. Yet this holistic process should not be engineered from the top down in a nice orderly fashion. A dynamic, open, democratic approach which encourages broad engagement by all stakeholders cannot realistically appear neat and linear. The Internet affords the opportunity to capture, rationalise and unify apparently messy data contributed by disparate opinion-holders whose views tend to be missed in the current formal processes. Sites like mySociety already play this kind of role.

While it seems almost trite now, the BBC heralded the shift toward an interactive, dynamic political process at the "E-envoy" conference in 2002:
“Currently…we are all used to… top down provision of information …whether it’s [from] a media company or the Government to you the audience or citizen. What we want to move to is this interactive model which has lots of conversations in lots of directions. Not only do we communicate to the users in this model, they can communicate back to us and they can communicate with each other, both through us and actually independently of us… Through digital media, like interactive TV, SMS text messaging and the internet, we can create very new networks of information exchange, ones we haven’t seen before.”

"...[W]hen the [pension] reforms are explained to people
they will see that they are the right thing to do."
Gordon Brown, Financial Times 8.11.05

He cannot allow them any serious discussion about priorities. His view is that it is just not worth it and ‘they will get what I decide’. And that is a very insulting process. Do those ends justify the means? It has enhanced Treasury control, but at the expense of any government cohesion and any assessment of strategy. You can choose whether you are impressed or depressed by that…
Lord Turnbull,
Permanent Secretary to the Treasury,
referring to Gordon Brown, in 2002
FT.com 20.03.07

While participation in formal “party” politics has been dissipating, citizens have found alternative ways to assert themselves. Any idea that they have become generally apathetic is a myth, as recent events have shown, and the Power Inquiry noted in 2006:
“There is now a great deal of research evidence to show that very large numbers of citizens are engaged in community and charity work outside of politics. There is also clear evidence that involvement in pressure politics – such as signing petitions, supporting consumer boycotts, joining campaign groups – has been growing significantly for many years. In addition, research shows that interest in “political issues” is high.”
In a long-since deleted press release in June 2007, the Cabinet Office warmly welcomed a report that urged the facilitation of a bottom-up approach to the use of public sector information, stating:
“The Government should work in partnership with the best of citizens' efforts, not replicate them. If we really want to deliver better public services, the best way to do that is bottom up. Change is driven by better feedback, open information and more ways in which citizens can make their voices heard about what matters to them. The challenge is for all public bodies to think about how they can respond to the challenges described here."

Citizens themselves are already helping each other in online communities. If 30,000 parents were meeting in a park or football stadium to share information and tips about parenting, government would take notice. That they are doing it online simply means we have to find different ways to take their efforts just as seriously.”
And George Osborne's remarks in November 2007 have often been quoted since:
“With all these profound changes – the Google-isation of the world’s information, the creation of on-line networks bigger than whole populations, the ability of new technology to harness the wisdom of crowds and the rise of user-generated content – we are seeing the democratisation of the means of production, distribution and exchange. … People… are the masters now.”
Lest anyone doubt that a broad-ranging, grassroots, web-based discussion of policies can result in an engaging, unifying event, they should consider Barack Obama's path to the White House.

By all means list your reform proposals in the comments... here are a few from me:
  1. prevent the abuse of secondary legislation as a channel for avoiding substantive debate on legislative measures;

  2. wholly elected Lords;

  3. 4 year fixed terms, with no government discretion as to the precise election date;

  4. publication of expenses, interests, emoluments via Parliamentary web site in a format that readily permits analysis;

  5. restraint on MPs/Lords taking roles in the industries they oversaw for at least 6 months after leaving office;

  6. no second home allowance (but state funded accommodation in a converted local authority housing block reasonably local to Westminster);

  7. requirement for both houses of parliament to approve UK's initial and ultimate responses to proposals for European directives.

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