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Another coalition? The next Government could trigger huge change

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In the summer of 2010, I remember sitting in HM Treasury watching the launch of the coalition’s shiny new plans to reform the annuities market.

The room was packed as Mark Hoban, the Treasury financial secretary who – as part of the Tory shadow team – had trailed the Conservative plans for reform for most of the long years of opposition, took to the stage.

The new reform was firmly written into the coalition agreement. It was an easy deal to do with Steve Webb, as he later told me “still pinching himself” to be pensions minister. He had committed the Lib Dems to the same policy throughout the previous parliament.

As someone who had campaigned for reform and flexibility for consumers for over a decade, I was naturally overjoyed.

Admittedly the ink was barely wet on the new draft legislation. The Government was moving at the cracking pace that all new, enthusiastic ministers and Governments do in their first 100 days.

But I also remember the headlines of the time. The industry response. Oh…the reforms were going to be very difficult to do. Very costly for consumers. They would only benefit the rich.

Did Mark Hoban or Steve Webb bat an eyelid? Not a chance. The last minute rush to change the new Government’s mind fell on deaf ears.

Why? The policy was clearly a place where the two parties that formed the new Government made common cause. They had sought the evidence in opposition and built support for change….for years. They were not going to be swayed at this stage.

Political projections are a lot like the weather forecast – sometimes right, sometimes wrong – but offering everyone an opportunity to make plans. In business terms – to assess risk. Political risk.

The debate on Scottish independence provides an interesting template. In early February this year the Financial Reporting Council made clear that – for publically quoted firms at least – they had a duty to give investors a clear view about business risk resulting from political risk.

Cue a whole host of financial sector businesses talking about the impact an independent Scotland would have on the bottom line and spending time creating planning scenarios.

And that is spot on.

Every business – whether it favours Scottish independence or not – needs to plan ahead for the multitude of ‘what ifs’.

But are businesses effectively planning as far ahead as May 2015 when we may well see a change from the current coalition towards a Labour majority or Labour/ Lib Dem coalition?

With just over a year to go until the UK goes to the polls policy commitments are starting to emerge from Labour on pensions, business taxation and regulation.

The Lib Dems are clearly creating political ‘space’ from their current coalition partners on issues such charge caps, tax relief and housing policy.

Only the Conservatives have yet to flesh out their own thinking on just what their own personal financial agenda may look like.

But the next few months are crucial as the parties look to lock down the big ideas for their policy platforms.

Whatever its complexion, preparing for Government has to start now.

Iain Anderson is Cicero Global chief corporate counsel – you can follow him on Twitter here

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. A Lib/Lab coalition would be worse than what we have now and, in any event, I thought Clegg had all but ruled it out. As for Webb, I have nothing but contempt for the man. All he does is talk, talk, talk about everything and anything but the real issues that need to be addressed.

  2. All politicians are basically half wits…..not good enough to drive their own business but very able to run the country…..can I change half wits, to fuck wits!!

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