Category: Laws & Regulations

Are Undisclosed Car Insurance Commissions Reasonable or Not?

In 2021, the Financial Conduct Authority (FCA) banned deals in which the dealer received a commission from the lender, based on the interest rate charged to the customer. This was upheld in the Court of Appeal based on the fact the commissions were not disclosed, but why should they be?

Car insurers are faced with very large, multi-million pound costs, if customers claim compensation on that basis. But Rachel Reeves, Chancellor, may intervene to protect the insurance industry.

It is surely daft that customers who bought insurance with their eyes wide open should be able to claim anything. They presumably were happy with the costs and level of cover, so the fact there were undisclosed commissions is irrelevant.

This is yet another example of the courts inventing new principles and undermining contract law. It also another example of the incompetence of the FCA.

See BBC Report here: https://www.bbc.co.uk/news/articles/cre8qr91w75o  

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

The Dangers of Rapeseed Oil

Last night I had the worst diarrhoea I have had for some time. This was almost certainly due to eating a stuffed chicken made with Rapeseed Oil. Even though the Food Standards Agency acknowledges that “Rapeseed Oil is known to cause allergic reactions in some people”, it is a commonly used ingredient in many prepared foods.

There is a petition on Change.org concerning its use and the lack of proper research on it. Personally I suggest rapeseed oil should be banned from human consumption.

Please sign the petition here: https://chng.it/whCrMLLsQj

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

IHT Changes, Farmers’ Fury, Shell Legal Win and Freedom of Speech.

The proposed change announced in the budget to impose IHT on unspent pension funds has received a lot of media coverage. I covered it in my previous blog post, and I encourage all people affected to respond to the public consultation – see https://roliscon.blog/2024/11/12/iht-on-pensions-its-iniquitous/ .

One particular group who are incensed by the proposed change is farmers who will no longer be able to pass on a farm to their offspring free of IHT, unless it is a very small (and hence probably financially unviable). As many people have pointed out, farming is a multi-generational business as it takes many years to improve the quality of land or to rear improved livestock. I am not personally a farmer and this proposal seems to be a typically socialist prejudice against the landed gentry – or what they imagine farmers to be which is far from the truth in most cases. They may own valuable land but the profits of farming businesses are usually a poor return on capital.

To suggest people buy farms to avoid Inheritance Tax may be true in a few cases but the risks in doing so are high so I suggest there are other motivations.

The good news for Shell shareholders is that the company has won an appeal in the Hague against an order to slash its greenhouse gas emissions. This was a case brought by Friends of the Earth and others which may have severely damaged Shell and set a very bad precedent for other oil companies. Trying to stop the use of oil and gas is simply irrational. We will need those products for many years into the future as there is no viable alternative for some applications.

The world is becoming less and less rational. Recent legal cases in the UK where people are being accused of “Non Crime Hate Incidents” and hence get a criminal record – see the Alison Pearson case for example – are truly irrational. Free speech is being lost to a world where the prejudice of the thought police is becoming paramount.

I agree with Elon Musk. The UK is losing free speech and you could end up with legal prejudice because you dare to express an opinion on Twitter (“X”) or Facebook on any matter under the sun. We need a new “Bill of Rights” to stop all of this nonsense.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

Asbestos – the Killer Material?

 One of my previous blog posts was a review of the book “Scared to Death” by Christopher Booker and Richard North. I did not mention that there is a good chapter in there on the subject of the paranoia that developed over asbestos.

Asbestos is now perceived as so dangerous that it is avoided in future building projects and is vigorously removed from houses, schools, hospitals and other buildings. Even products such as Artex which contained asbestos fibres in the 1960s and was used extensively in decorative ceiling plaster is treated as dangerous. For example our house, built in 1963, is full of Artex ceilings.

Now I do have a personal interest in this matter as my father died in 1977 from Mesothelioma, a type of lung cancer, known to be caused by breathing asbestos dust. He probably contracted it from involvement with pipe and boiler lagging during the second world war.

But the book mentioned makes it clear that not all asbestos is dangerous. The danger from Artex is quite minimal so all of you who live in houses of a certain age do not need to panic. But a big industry has developed of charging people large sums to remove asbestos. Most such removal is unnecessary but it’s a typical scare story where popular media inflate the dangers and contractors welcome the income they can enjoy from removing asbestos.

One of the biggest losers from the asbestos scare was the Lloyds of London insurance market and the “Names” who supported it. They had unlimited liability at the time when claims over asbestos arose which effectively destroyed the market and impoverished many of the Names – people who often had no awareness of the risks they were taking. Altogether a disgraceful financial episode.

Read the book mentioned before you waste money on needless building work.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

What’s Not to Like? Trump Elected and Markets Rise

 With Donald Trump elected as US President, it’s clearly time for us 78 year olds to make a come-back. In terms of candidates both had their weaknesses but the beauty of the US constitution is that there are several checks on the power of the President. The House of Representatives and the Senate have some control and there is also the US Supreme Court who can veto legislation. That is unlike in the UK where the Prime Minister can act like a dictator. The US system is better than the UK’s for that reason but it also helps to have a written constitution.

In England laws can be made by lawyers and a recent example is the decision by the Court of Appeal that it was unlawful for car dealers to receive commission on car finance deals. Why should car buyers need to know about commissions paid? If they are happy with the finance deal why should it be allowed to be challenged retrospectively? Caveat Emptor is the relevant phrase that should apply (the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made).

The election of Trump has had a definite positive effect on stock markets. Even my share portfolio is up about 1% this morning. Big tech stocks have particularly risen, presumably because folks perceive that might mean less regulatory interference or perhaps that the prospect of Leon Musk taking a role in managing the US economy is viewed positively (he wants to shrink the bureaucracy in the same way he cut staff at Twitter (“X)).

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.

A Fool and Their Money are soon Parted

 A fool and their money are soon parted – that ancient phrase came to mind on reading the latest newsletter from the Financial Conduct Authority (FCA). One item noted that “The FCA has brought charges against nine individuals in relation to an unauthorised foreign exchange trading scheme promoted on social media”.

The individuals concerned promoted trading in CFDs via Instagram accounts and had in total 4.5 million followers. The FCA has previously said that 80% of customers lose money when investing in CFDs because of the risks.

There are clearly a lot of fools in this world who follow “influencers” on social media. And this prosecution is probably just the tip of the iceberg with many other cases remaining to be uncovered. See https://www.fca.org.uk/news/press-releases/finfluencers-charged-promoting-unauthorised-trading-scheme

It’s worth following the FCA for the latest news on financial scams but I fear those who fall for these kinds of scheme are so uneducated or inexperienced that they will fall for any get rich quick scheme however it is dressed up. There are so many suckers in this world waiting to be parted from their money that the FCA has an impossible task to stop all the abuses.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

Population Growth – the Real Problem

The Office of National Statistics (ONS) has reported that the UK population grew by 1% to 68.3 million last year. This is the fastest increase since the 1970s and was driven by net inward migration. If this continues we may need to provide for 20 million more houses by the mid 2040s.

This rate of growth puts an intolerable burden on public services such as the NHS which we are already seeing, on congested roads and railways and big demands on new infrastructure such as the electricity grid which we need just to meet demands for more electrification to drive carbon reduction by the Government.

See Telegraph report for more information: https://www.telegraph.co.uk/business/2024/10/08/migration-drives-fastest-population-increase-since-1970s/ or the ONS report: https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/bulletins/annualmidyearpopulationestimates/latest

I have written several articles in the past on this subject – see for example: https://roliscon.blog/2022/06/29/census-results-a-problem-the-government-is-ignoring/

But the current Government seems to have no clear plan to curb population growth. They may be attacking “illegal migration” but most of the inward migration is people on work visas or family relatives. There are also many “asylum” seekers who are really economic migrants.  There are no clear targets or plans for how to stop the population growth which we desperately need. It’s not just Labour politicians who are ignoring this issue but other party leaders. They are always focused on topical or what they perceive as popular issues such as the cost of living without realising that population growth damages the economy, requires more taxation and affects our standard of living. Migrants cost us a great deal to support and need to be discouraged by making the UK a much less attractive destination.

Robert Jenrick seems to have some useful ideas such as withdrawing from the ECHR to avoid frivolous legal challenges by migrants but there should be no financial support to lawyers to challenge decisions on asylum claims or expulsion decisions. Other European countries are making migration much more difficult and we should do the same.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

Microsoft Forcing a PC Upgrade

After only five years, I am being forced to replace my desktop PC because it can only run Windows 10, not 11. Microsoft say: after 14 October 2025, your Windows 10 PC will no longer receive security updates and Microsoft will no longer be available to provide Windows 10 technical support.

Despite the fact that I have a pretty high spec PC, I am being forced to upgrade as it does not support Windows 11. This is going to needlessly cost me more than £1000 and a lot of work to install all existing software and configure stuff.

Having reviewed the changes in Windows 11, apart from a few cosmetic changes there seems very little that is of benefit. But I will have to spend time learning my way around the new operating system.

I consider this needless change to an operating system to be an example of predatory activity by a dominant software supplier. Their motivation for this totally unnecessary change is probably to help their partners sell more hardware and to force users to upgrade Microsoft software such as Office.

This is surely an example of where regulators should intervene to stop Microsoft exploiting its dominant position in PC operating systems.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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Paul Killik Spells Out What is Wrong with UK Retail Investing

There was a good article by Paul Killik in the latest Killik newsletter. This is some of what he said:

“I struggle with the fact that they [retail investors] are actively encouraged to use funds, predominantly in the form of open-ended collective investment schemes such as unit trusts, to get an exposure to shares. Instead. I feel that they should be buying directly into the underlying securities. The disastrous, ongoing collapse of private shareholder participation in the UK stock market underscores my view. It is an issue I very much hope the latest administration will address”.

He points out how retail participation in the UK stock market has declined sharply over the last 50 years to near 11%. He says “Buying a pre-packaged investment fund from a regulated product manufacturer is billed as removing the hassle of putting a portfolio of shares together and then having to manage it. However, this is misguided. The direct ownership of companies is central to the overall health of capitalism”.

“Both in the UK and across Europe, tax policy in particular has been skewed towards encouraging retail investors into collective investment schemes and away from direct equity investment”. He also criticises the process of “dematerialisation” of share certificates which has resulted in shareholders losing valuable rights and made it more difficult for shareholders to vote. He says: ”Looking ahead. I would ideally like to see a change in the law to remove the concept of a beneficial shareholding so that we reinstate the core principle of legal ownership for smaller investors, something technology now permits.

It is particularly disappointing that, even as concerns mount about the way the London market is withering, existing tax policy appears to still encourage institutional fund management over direct investment. Coupled with a consistent failure to protect a number of basic rights that retail investors have lost over the years, this seems short-sighted, at best. I therefore urge our new government to revisit this issue as soon as possible”.

This article certainly spells out much that is wrong with the UK stock market that needs fixing if retail investors are to be better treated and not lose out to institutions and fund managers who erode their returns.

You can read the Killik newsletter containing Paul’s article here: https://killik.com/guides/confidant-summer-2024/

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

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