We want clear, concise info. Not buckets of it we don't get!
A rather horrible vision came to me last night as I watched the ten o’clock news, about a new policy from the coalition to provide masses of information to us, the political consumer, with the objective being that we hold them to account…
On the surface this doesn’t sound too bad, and it’s certainly a laudable aim, yet my fear is it rather closely mimics exactly what we’ve seen within the financial services industry over the last five years or so.
In order to show they’re ‘accountable’, companies dole out copious amounts of information, yet most people don’t have a clue what it means or how to use it, so it’s pointless. However, by the simple fact of publishing it the industry gets to argue it is being ‘transparent’.
My concern is the new plans to publish timetables and operational details of the work of the government (see Cameron hails ‘revolutionary’ Whitehall data website) will unwittingly end up being the political equivalent.
Take credit cards as an example
This is something I talked about in an evidence session to the Treasury Select committee on financial regulation recently, and as I need to focus on writing the weekly email today, to speed things up here’s a moderately edited cut and paste from the minutes to explain…
“We introduced a few years ago – after much lobbying, which I wasn’t a part of – credit card summary boxes. That was because there was a demand you must know the information, and the detailed information, about a product.
I gave a talk at the LSE recently and asked them a question. I asked the students what it meant when it says in the summary box of the Lloyds Advance card that there’s no interest free period?
None knew. A few of them had a stab at it though, and like many consumers they fell into the trap of guessing it meant that there wasn’t a 0% period for six months or for a year.
Yet that’s wrong, what it actually means is, even if you pay the card off in full at the end of the month you still must pay interest.
I could’ve asked the same about repayment hierarchies, or foreign exchange loadings, all diligently detailed in the summary box, and yet I still suspect few would’ve understood.
What we need is explanation, not just information. One of the great excuses the industry has given over the last 10 years of how it has improved, is it has given more information. But with no financial education, I’m a great believer in compulsory financial education in schools; an issue for another day is a financially illiterate public. Giving information doesn’t do the job because people haven’t got a bloody clue what it means.”
Will the government’s system be the same?
Don’t get me wrong, this isn’t a criticism of the PM’s wish to improve governmental transparency. These data sets have the ability to be a positive force. It’s more a warning that we’ve seen from experience, information on its own is no solution.
The concern is its introduction is happening at the same point as getting rid of many of the official bodies (or quangos as they’re called when people don’t like them) who hold government and companies to account.
Let’s just hope we don’t end up fulfilling the old adage of ‘lies, damn lies and statistics’.
