Submission to APPG inquiry into the role of the UK parliament in the future regulatory framework for financial services

This APPG inquiry is timely and important. The entry of the UK into what is now the EU changed fundamentally how financial regulation came into being and the terms of the inquiry identify a really key issue in relation to this. Initially, our accession did not change a great deal in terms of the extent of financial regulation. But, as described below, there was a step change in terms of process away from the traditional UK approach to developing legislation and regulation in this area and towards a model of establishing regulatory bodies which would be empowered to develop regulation without direct accountability to parliament. However, it is notable that there has been little resistance to the development of new processes and bodies designed to regulate financial markets in the UK: we seem to have absorbed the continental approach in this field with alacrity. Furthermore, our governments have been in the vanguard of promoting greater regulation at the EU level. Also, in those areas of financial regulation not covered by EU competencies the UK has embedded the approach further and also joined with other international organisations to design, implement and enforce forms of financial regulation in ways that are not easily accountable to parliament. Much EU regulation has, of course, been gold-plated. I would like to begin this submission with a brief history of the development of financial regulation in the UK focusing on the move away from parliamentary accountability so it will then be possible to answer the questions relatively briefly. The history, though, demonstrates the context which any new approach will either have to change or work within.