The Government's proposed new regulatory structure is nothing more than a "cosmetic" exercise that will not make a grain of difference, Lansons director of regulatory consulting Richard Hobbs says.
Hobbs also attacked the coalition for pursuing this "very risky process" and believes the timescale for its completion has been "misjudged."
Speaking at the Protection Review conference, Hobbs took aim at the plans to replace the FSA with a Prudential Regulatory Authority (PRA) and a Consumer Protection and Markets Authority (CPMA) which, he said, also leaves the future of the Office of Fair Trading (OFT) "unclear."
"Having spent a quarter of a century in Whitehall, I can pretty much tell you before and after, it doesn't make a grain of difference which one you use, it makes no difference to how things run," Hobbs says.
"You might get some sort of gain, but certainly it's not worth it, and crucially, the structure before didn't get us into this mess, so there's no rational case for changing it - the changes are cosmetic actually," he adds.
The timetable for implementing the changes is a further serious concern to Hobbs, who believes the Government risk running out of time if the Conservative-Liberal Democrat coalition does not survive a full five-year term.
It is predicted the project will take two years, but the both the 1984 bill (which resulted in the 1986 Financial Services Act) and 1998 bill (to achieve the 2000 Financial Services and Markets Act) took two years in Parliament.
"The risk around this is pretty enormous," he says.
"Those were smaller bills than the one currently contemplated, and they take that long because they are very big and difficult. So two years only really covers the amount of time in front of the house, and before you can get there you have to introduce draft legislation - but have we seen this yet? No, but we are promised a consultation document. So already, the period before the two years can start ticking is growing.
"And what most of us tend to forget is it took a further two years to draft the secondary legislation to make the primary legislation work. You can't just pass a bill into law and get going because there's a lot of plumbing you have to do. So, this has been misjudged, and the likelihood is it will take more like 5 years end to end.
"Now if the coalition Government lasts the full five years it will get there, but if it doesn't then this is all very vulnerable," he adds.
