241 Pizza

At the sharp end of regulation, among the likes of financial advisers, however, the burden is as heavy as ever and might even become too much to bear. The reason is simple.

The new regime at the FSA is concentrating its fire-power on enforcing rules in the retail sector, where professionals sell to and deal with ordinary savers.

That sounds good but does not help consumers if the advisers are afraid of selling them any remotely interesting investmen because the cost of regulation makes the services uneconomic for ordinary people, who might really need them. Nor are consumers served if advisers go out of business and leave savers with no option but to decide which side of the mattress to stuff with their banknotes.

Two thirds of the smaller retail firms regulated by the FSA now think that the level of regulation has become detrimental to consumers’ interests, and 58 per cent of the larger retail firms share their view, albeit generally less vehemently. That is not just grumpiness. A similar majority of the more lightly regulated wholesale firms, which include the many-tentacled investment banks, see no problem.

McCarthy and Tiner should pay attention to these views. If no one buys a long-term life assurance policy, then no one is going to complain and no one will have been mis-sold. But that is not good regulation. It is stifling the operation of markets. For small firms, the cost of regulation can itself be a killer.

Among 1,470 smaller retail firms surveyed, 58 per cent claim that identifiable costs of regulation make up 10 per cent or more of their total costs. More than a third of such firms think it is more than 15 per cent, including 43 per cent of independent financial advisers.

One size of regulation does not fit all. The FSA must change this or be charged with driving small firms out of the market and reducing competition.

Driving down memory lane

MEMORIES are short at Ford. And, coincidentally, the DTI seems to have the same affliction.

The carmaker and Patricia Hewitt, Trade Secretary, were keen to herald yesterday’s investment at the Dagenham engine plant as great news (ie, an event that is new) and evidence that Britain can hold its own in manufacturing.

But wait a minute, isn’t this the same investment promised three years ago when Ford was ending carmaking at Dagenham? To soften the blow it pledged to spend £600 million on the engines operation by the end of 2004 and said the plant would produce a million engines a year. Yesterday it boasted of £550 million and a million engines.

In the interim, however, Ford had given warning that the last stage of investment could go elsewhere and required Dagenham to compete for the work it had not so long ago been assured of. But, with all that conveniently forgotten, Ford and ministers are rejoicing at their efforts. Perhaps “Ford keeps promise” may not have sounded so newsy. And perhaps not so believable, especially for its Coventry Jaguar plant which was promised a new model in February and is now closing.

When DIY programmes are being expunged from television schedules it is no wonder that buyers failed to queue up to buy Focus, which is the market number four behind B&Q. Duke Street and its fellow sellers should not worry. The £950 million Travis Perkins was prepared to pay for Focus stablemate Wickes, which supplies the professionals, let the vendors report a £500 million profit. At that rate they could almost have afforded to make it a Buy One Get One Free deal and thrown in the unwanted Focus chain gratis.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive