The news that both Shell and BP were raided earlier this week in a price fixing probe has been greeted with hysterical headlines about the cost to consumers. The Daily Mirror screaming “They’re bleeding us dry” probably being the best example from yesterday’s front pages.

However, the ‘price at the pump’ is something of a distraction in this case. Yes, motorists have had their pockets picked, but I doubt that price fixing has had a dramatic impact on consumer behaviour.

Ten years ago I was doing 30,000 miles a year at 80p a litre, but my behaviour has not changed now that the price has risen to £1.40 a litre. I’m still doing the same sort of mileage.

All of this could lead the oil companies to argue, if any case comes to court, that this is a victimless crime. They’d be wrong.

The real issue here is potentially the impact on business. Let’s take the road haulage industry for example. Typically, the industry operates on very slim margins, in fact I remember one former client of mine existing on an operating margin of circa 2-2.5%.

That leaves no room for error let alone coping with the potential effects of price fixing. What’s more, all too often at least a portion of any increase in fuel prices cannot be passed onto customers – it just has to be absorbed.

And that’s just one example. What about courier companies, service industries with large car fleets and even your average white van man. The damage to business if this is proven is incalculable.

Of course this absorbing of cost increases by business has a knock on effect on wages and investment. I’ve seen figures this week which suggest that new product development is at historic lows in the UK. Real incomes for employees have not risen in ten years.

I was genuinely shocked at the rigging of LIBOR in London, the benchmark interest rate from which all other interest rates, globally, are taken. I don’t know whether I’m just becoming punch drunk from all of this but the news of the oil price fixing didn’t hit me in the same way.

The truth of the matter is, the pendulum has to be swung back towards greater regulation which might help “real businesses that actually make stuff” as one former Chief Executive client of mine told me a while ago.

The best way to start is for the Serious Fraud Office to prosecute some people.

The Office for National Statistics manufacturing figures released earlier this week make for dire reading, but I wonder whether there are others in the UK’s manufacturing base who are as confused as I am.

I am not for one moment saying it is easy out there, but the 1.5 per cent drop in output paints a picture of doom and gloom above and beyond what I am seeing and hearing.

Traditionally, with a drop of that magnitude the smaller players are the ones to suffer first.  But whenever I have been to visit smaller engineering subcontractors in recent months the usual response to my question about business conditions has been “busier than ever” or “flat out”.

Bigger manufacturers are going equally as well and in conversation a senior manager at one last week it was clear that frustration with the statistical acronyms, be it ONS, EEF or CBI is close to boiling over.

In fact, he made a very interesting point, namely that his sales performance used to closely track the Purchasing Manager’s Index (PMI), but that in recent years there has been a noticeable divergence.  In other words, as the PMI has gone south his sales performance has been remarkably robust.

Why is this?  I’m no statistician, but I do wonder whether the official statistics are at the same time too generic and too heavily weighted towards manufacturers supplying under-performing sectors, like construction, and insufficiently weighted towards high growth sectors like aerospace.

Perhaps, in the same way that champagne has been dropped from the Retail Price Index, one or two of the more glass half-empty purchasing managers need to be shunted off into retirement.

Yesterday’s figures from the Bank of England about UK bank lending to business are shocking.

In the final quarter of 2012, despite a new government scheme, called the Funding for Lending Scheme which has given them £14 billion to encourage loans, our banks have actually managed to lend less than before.

In other words, the scheme had the opposite effect to what was intended and British business remains starved of investment cash.

Chief culprits are, incredibly, the state-owned banks, namely RBS and Lloyds HBOS.  Lloyds, which is 40%-owned by the taxpayer, cut back its lending by more than £3bn during the last quarter of 2012.  RBS reduced lending by £1.6bn.

Where has the money gone?  To rebuild bank balance sheets decimated over four years ago at the height of the financial crisis is the answer.

We have now had the sight of two successive Chancellors of the Exchequer (Darling and Osborne) and a Business Secretary (Cable) imploring our banks to lend to business.  All appeals fall on deaf ears.

What is the answer?  As Lord Lawson of Blaby, former Conservative Chancellor of the Exchequer, said recently in an article in the FT, the way forward would appear to be to turn RBS into a national business bank of the type that has been running in Germany for years.

Should we be worried about bankers voting with their feet and going abroad chasing their bonuses which would be lost with nationalisation?  Not according to Lord Lawson.  “These are not particularly impressive individuals,” he said of young bankers in the City.  ”They’re all of them easily replaced, particularly in today’s labour market.”

Amen to that!

The extraordinary thing about the loss of our ‘cherished’ AAA credit rating is not that the Chancellor hitched his economic credibility to it in the first place.  Actually, that is fairly incredible but it isn’t the most incredible.

Neither is the most incredible thing the fact that acres and acres of newsprint have been devoted to this ‘disaster’.  Nor is it the fact that almost everybody (including Ed Balls), quietly agrees that it is not going to make a blind bit of difference to our ability to raise money in the capital markets.

No, the most incredible thing is that anybody is even remotely listening to Moody’s in the first place or for that matter their competitors namely Standards & Poors and Fitch’s.

In fact, when I heard that the AAA rating had been removed I laughed!

Why?  Because the main culprits for the financial meltdown in 2008 are as follows.  Firstly the global investment banks who played Russian roulette with the weapons of mass destruction now known as CDOs (credit default obligations).

Secondly, the major accountancy firms who declared the investment banks to be solvent, despite the fact that they had no way of knowing the potential liabilities of banks holding the CDOs.

Thirdly, the politicians who with a combination of either light touch regulation or total disregard for regulatory norms let the banks run amok.

Finally, the credit ratings agencies who gave credibility to the slicing, dicing and securitisation of dodgy mortgages in what became known as the mezzanine CDO market by giving them AAA ratings despite not having a clue what was in them.

In fact, by all accounts the conversations between the ratings agencies and the banks went something like this.

Banker:  “You know that stack of securitised mortgages you gave AAA ratings to a few months ago?”

Ratings agency:  “Yeah”

Banker:  “This one’s exactly the same”

Ratings agency: “OK then, you can have another AAA.”

No research, no questions, just throwing AAA ratings around like confetti.

The fact that these same people now pass judgement on the British economy is risible to say the least.

Good business stories are like buses, nothing for ages and then two come along at once.

Friday was just such a day. In the morning we had the Competition Commission laying into the Big 4 accountancy firms and by the evening we had lost our AAA credit rating.

I’ll start with the Competition Commission though, before moving onto the downgrade tomorrow.

Certainly the Commission’s report should make for uncomfortable reading on the partner floors of the big firms.  You would think that phrases like “high prices, low quality”, “insufficiently independent” and “cosy relationship between auditors and senior management” would ring alarm bells.

We are talking about the Big Four here though, who promptly declared that there was no conflict of interest in management teams appointing auditors (PWC) and that the market is competitive (Ernst & Young).  In fact, PWC went as far to say that the Commission had grossly under-estimated the role of the Audit Committee in protecting shareholders’ interests.

Perhaps, but the problem is that there is much money to be made from selling other services alongside an audit to the executive management teams.  The danger is that those services, such as tax advice, become so lucrative that auditors potentially become constrained in their criticism which fatally undermines the audit process.

This is not a new concern.  Robert Bruce, who wrote the Audit column in The Times for many years, used to say that an audit should be no more comfortable for a management team than the pulling of teeth.  I know from my own experience that there used to be a client services manager within one of the Big Four here in Birmingham whose job it was to ring up clients post-audit and ask “how was it for you?”

Where do we go from here? If I was advising the Big Four I would urge them to go along with the Commission’s proposals which seem reasonable.  The Commission is arguing for mandatory tendering and rotation of audit firms. You could certainly argue it should go much further and insist on no reappointment for at least six years which allow some of the second tier firms to get a piece of the FTSE 350 action.

The Commission is also recommending the prohibition of ‘Big 4 only’ clauses in loan documentation. Again, this is not unreasonable and should help introduce further competition.

Personally, I would also introduce a rule that no former auditor should be eligible for appointment to a company’s board for at least five years following his departure from an accountancy practice.  This should ensure that the gravy train comes to a crashing halt.

My advice to the accountancy profession would be to accept that change is required, that major mistakes have been made, such as Ernst & Young declaring Lehman Brothers to be solvent, and that the market is uncompetitive.  The danger for the Big Four if they continue their belligerent approach is that the Commission’s ultimate proposals will be far more draconian.  What’s more it will play into the hands of the European Union which already has them in its sights!