Politics, Ice Cream and the mystery of inappropriate regulation

Politically I’m a mixed bag.

I’m massively for aspiration and wealth generation. I believe in the power of enterprise. I understand the benefits of free and open markets. I also don’t  like the idea of  big government and wastage.

However I’m also believe in providing support to those who need it, the importance of the NHS and am, being bought up in a community where my friends parents hailed from all over the world, a bit confused about the  “immigrants flooding our shores” argument when for years immigration has been so important to the development of so many communities.

I myself am a product of immigration although only on my dad’s side and a few generations back now, although I suppose you could see that as an argument for and against more restrictive border controls!

Regardless of these conflicting opinions I believe it’s important to vote.

Therefore I always do, however I was so on a knife edge that whilst at the ballot box in the last general election my thoughts we so balanced that in the end I voted for the candidate who, whilst canvassing down the street at the same time as an ice cream van pulling up, bought me a Ninety Nine.

Due to the fact that this may be perceived as vote rigging and get the individual in question a lot of trouble I obviously can’t disclose the individual or the party he represents. However if you feel inclined, feel free to buy me a Cornetto and I might tell you (I’m not easily swayed, but ice cream has a massive impact to how easily swayed I am!)

However there’s a question which I’ve been thinking about recently which I’m pretty conflicted about and would love to hear your thoughts on the subject….

Does financial regulation protect the rich and ignore the poor?

Consider this…

Financial Advice, Making an investment, investing in financial products or even spread betting, all usually ‘stuff’ which individuals with greater levels of wealth engage with are all regulated by the financial conduct authority.

Most of us would accept that regulation for these products and services, and even though there are numerous opinions around the specifics, should be controlled to protect the public from shysters.

However if I wanted to get cash fast by using the Wonga app, calling Quick Quid or pop into one of the nearly 1500 payday loan shops which have popped up in our towns and cities in recent years.

Then, with the massively expensive but incredibly convenient cash I’ve acquired popping into the bookies, or using an online casino or at 1am in the morning whilst watching my telly box losing it within a matter of minutes.

So, if I did this what protection would I have under current regulation (including the Gambling Act 2005)?

The simple answer is very little.

Alternatively, If I invested that ten thousand pound (an amount which could be gambled pretty quickly) in an investment the transaction will be regulated by the FCA, there would be a number of actions you could take (including look at compensation via the firm or FOS) and if the individual had gotten advice this would need to be fully  documented and potentially open for challenge in the future

The protection taking this route for the consumer looks pretty good.

I get the argument that says that payday lending is different to taking out a mortgage and gambling is fundamentally different to investing.

I’d agree these facts are true.

However to label payday loans just as a “short term stop gap” and gambling as a “bit of fun” ignores the havoc these industries reek mainly in the pockets of the individuals who can deal with it the least.

Also if you look at the motivation behind both, to attempt to receive more money than originally contributed, the underlying reason for doing both isn’t particularly different.

Although I’m simplifying my argument the base aspiration of a gambler or someone using a payday loan is to get access to more money than they had previously

The base aspiration of an investor is usually the same.

Also whilst both the gambling and financial services environment are regulated the more direct and clearest indication on how these professions are dealt with are shown by the number of staff each respective regulator employs…

The Gambling commission has around 215 staff.

The FCA last year had an estimated workforce of just under 4000.

This is where my quandary lies…

One part of me says that people should do what they want with their money.

This includes banging it mindlessly into a slot with a hope of getting a proportion of it back, watching an ‘tv casino’ channel debit card in hand or using online betting sites.

However part of me thinks that if  ‘investor’ are protected far more than ‘gamblers’ and payday loan ‘customers’ is it fair that the lack of regulation in these areas means that the people who least afford these losses are impacted.

So, I’m interested in your thoughts…

Should regulation be tighter on gambling and payday loans?

Does the answer lie in regulation? or does it lie in an alternative route? if so, what?

Do we regulate to protect the wealthy in the society but not the poorest?

and

If you were prime minister for the day how would you change regulation to ensure that it protected as many as possible?

I’m looking forward to hearing from you.