View more on these topics

Claws for thought

Has the Treasury finally removed its fingers from all the pies on the Government’s table with last week’s Budget?Alistair Darling’s speech was less chief executive, UK plc, more bank manager. The Chancellor had little room for manoeuvre bound by the deteriorating economic situation and public finances Northern Rock and all.

We are also a country at war in two theatres and at such times the job is probably to find the money without too much fuss.

But whether it is circumstance or personalities, I would argue it is a good thing for the Treasury’s claws to be withdrawn. I am a fan of good Government – of finding the best method to deliver policies and services whether public or private yet I sometimes doubt Labour has picked the right sectors for free market treatment and the right ones for public ownership.

I would have privatised the Post Office years ago but wouldn’t let the private finance initiative anywhere near a hospital. But the real issue for at least two decades has been centralisation often driven by Treasury interference or at least the threat of veto.

The Blair-Brown feud and Chancellor Brown’s vision of himself as chief executive didn’t help. But Chancellors including Lawson, Howe and even Brown found themselves with Prime Ministers who were either not economically literate or at least not interested in detailed numbers.

Much of the change was inevitably driven by the Treasury belief that if it was paying for something, it was determined to get value for money. This is a laudable aim – it is just that it took the department to places it didn’t belong. Some of my thinking borrows from an excellent book by the journalist and former Times editor Simon Jenkins called Thatcher and Sons. It paints a bleak picture of centralisation especially in education, health and criminal justice. Yet while I don’t agree with the full thesis it has some relevance to financial services.

The Government has increasingly been held responsible for all sorts of things where once it was not. In this sector, when a privatising or liberalisation goes wrong, it has then sought control again by, for example, setting up the FSA. As a result and with PR an increasing obsession, there has been a great deal of Government fire fighting when perhaps there was no fire – as with the ombudsman review of endowments – and a failure to douse the flames when there definitely was – as with the decline of occupational pensions.

In these situations, I can’t help thinking Government would have been better off with clear lines of responsibility. The same holds true for pension reforms. Over the years to discuss anything, stakeholder, Pickering, Sandler, simplification or personal accounts required a calculation of what the Department for Work and Pensions wanted, and a calculation of what the Treasury wanted too and sometimes Downing Street, and the Revenue to boot. This led to all sorts of speculation about who would prevail but mostly it was the Treasury.

The upshot is that much got vetoed, not much got done, industry voices were not adequately listened to and policies became messier compromises than they would usually be. So if this Budget is a retreat by the Treasury from areas that do not directly concern it it is to be welcomed. That is not to fault its abilities – they are formidable – perhaps something as fundamental as pension reform should be under the Treasury remit – but only if you gave it to the Treasury alone.

Dual Government leads to confusion of responsibility. Hopefully in the Brown/ Darling era, it is a thing of the past. But one has to hope that the same would apply to Brown and Balls or Cameron and Osborne, too.


A day in Windsor Life

I’m getting used to putting in calls to Windsor Life’s PR team at the moment due to the volume of complaints Money Marketing is receiving from disgruntled advisers.

John Tiner joins New Star as non-exec director

Former FSA chief executive John Tiner has joined New Star Asset Management as a non-executive director.New Star net revenue is up 29 per cent on last year to £173.3m with profit before tax, interest, exceptional items and amortisation of intangibles was up 36 per cent to £98.1m. Assets under management are up 9 per cent […]

LV= ups commission for advisers using express route for protection

LV= has announced advisers that use its express route to apply for protection products will receive an extra 10 per cent commission.The move aims to reduce the risk of non-disclosure and cut the workload for advisers.The express route requires advisers to submit a few basic client details online. The client is then contacted by a […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm