Most brokers welcome regulation, but the interference of the EU is too much, says Elliot Lane
'Professor Patrick Minford, ex-adviser to Margaret Thatcher and one of the Treasury's wise men during John Major's term in office, expressed his surprise at the results of an exclusive research commissioned by the Welsh Development Agency and Insurance Times.
The research was the focal point of last week's Profitable Business Growth conference and gave an insight into what concerns the industry when executives think about profitable growth.
What was startling to Professor Minford, now head of Cardiff University Business School, was that 66% of the respondents, mostly regional brokers, said they embraced FSA regulation and had a "warm attitude" in Minford's words, to compliance.
Ironically, Europe received a huge raspberry from those surveyed and the widespread view was that all its actions, in contrast, are negative.
But the EU's Insurance mediation Directive is the nucleus for all the Treasury's actions and, ergo, the FSA's decision-making and regulatory strategy. Minford told delegates: "The dog which isn't barking is the industry's desire to lobby the EU."
Hugh Price, partner and director of insurance, at law firm Hugh James, also highlighted in the same session a number of anti-regulatory quotes from a certain high-ranking government official.
One quote echoed Minford's observation: "About 50% of significant business regulation emanates from the EU...it often seems to want to regulate too heavily without sufficient cause."
Who could make such a dramatic statement outside the FSA? The Chancellor, Gordon Brown? No his old friend and nemesis the Prime Minister, Tony Blair.
If the Prime Minister feels this way then it begs the question who will take a stand if the EU decides to over-regulate a well-run economy?
Even the EC commissioner recently said in a speech that over-regulation can be regarded as "anti-competitive" if it stifles the free flow of business professions.
Laissez-faire economies are still the norm in EU member states and very much so in the new EU accession states and reforming eastern European states.
One conference delegate raised the rhetorical question of where is the leadership in the industry. Who is taking the initiative to lobby and fight the industry's corner?
The ABI has started to make noises, and in November, Lord Hunt of Wirral has organised a cross-party delegation to visit Brussels and the insurance commissioner's office to "give them some understanding of what the UK insurance industry is about," he told me.
Let's hope his mission works and someone is listening. IT