There was a letter in the Daily Telegraph early in the new year pointing out that the name of the Metropolitan Police commander in charge of the Hackney siege – the longest in London's history — was B Quick.
Sadly, no such ironies exist in politics. Our Work and Pensions Secretary resides under the dramatically dull name of A Smith. Perhaps he should rename himself. G O'Slow springs to mind because, if truth be told, this Government is in danger of conducting the longest siege in history, with the financial services industry as its hostage.
Will the situation be resolved in the next year? It seems unlikely. Here are Consolidated Communications' predictions for the industry in 2003.
Before you read on, it may interest you to know how we fared with our 2002 predictions. Let us refresh your memories:
We predicted a vigorous debate on the euro but no referendum. Well, there was no referendum but there was hardly a debate either. Perversely, 2003 may see the euro strengthen against both the dollar and the pound but a referendum stills seems a far-off prospect.
We predicted that the Chancellor would set out the details of child trust funds in his Budget. The details came in his November statement, so we were out by six months.
At the time, we wrote that child trust funds are the unsung saviours of the industry. One canny company, Tunbridge Wells Equitable, has spotted this opportunity, relaunched itself as The Children's Mutual and produced a ground-breaking product – the Children's Portfolio – showing that innovation can happen without Government intervention.
We predicted that there would be little reform of annuities beyond promoting the open-market option although we did say the age for compulsory annuity purchase would be raised. It was not and, yet again, the Government missed an opportunity for radical reform. The Tories continue to raise the issue by way of Private Member's Bills but we are unlikely to see further reform.
The big story this year will be the realisation by many companies that they have historically offered too high annuity rates. Longevity could become the new guaranteed with-profits, that got Equitable Life into near fatal trouble – an open-ended commitment without the resources to fund it.
We predicted that Sandler would be a damp squib and we were right. If anything, it has been overtaken by the urgent need to reform pension regulation and encourage saving. Stakeholder products, or simplified investment products as they are now to be known, are here to stay.
As usual, tardiness and bureaucracy are delaying any clear moves from the Government. We have already seen the first consultation document from the FSA, released on January 2. With three more consultations promised, we will have heard about all we can handle on simplified investment products by the end of the year.
Given the uncertainty facing the industry, there is every indication that the lobby against the 1 per cent world will continue, with arguments that now is not the right time to impose tough product standards. Recent hints from the Treasury suggest Financial Secretary Ruth Kelly may at last be willing to listen to those arguments.
It is obvious this will be a year of potential turmoil for the industry. War with Iraq is looming and will bring uncertainty to world markets. The cash cow of a booming mortgage market may also be less productive.
Britannic is the first company to admit that the three-year downturn in stocks has hit it badly and there may be others. The industry may have to pause to take stock and looks at how much has changed in the last few years. Cue mergers or retrenching.
If one or more of the big hitters is affected badly, there may be calls for more financial regulation. We hope they will be resisted but we do expect some sort of scandal to come from nowhere and shock us all.
Depolarisation will go through almost unnoticed. Like Sandler, it has been so widely trailed that there is nothing more to say on the subject. Things will improve in terms of customer services, with clearer choice and more transparent fees, but nothing earth-shattering.
The pension crisis will continue. The work and pensions select committee, under the newly knighted Liberal Democrat Sir Archy Kirkwood, should soon release its report into the Crisis in the UK Pensions Industry. Expect uncomfortable smiles from A Smith as he welcomes “the important contribution this report makes, blah, blah, blah” while quietly shelving its recommendations.
Following on from the Pickering report, there should be a pension bill on the cards for late in the year. Stand by for lots more tedious consultation, as well as more breast-beating from the trades unions as the final-salary scheme becomes a rarer and rarer species.
This year will be a damp squib, full of nervousness and a lack of willingness to take significant risks.
Ed Vaizey is a board director at Consolidated Communications