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Iain Anderson: An ‘in’ vote will fuel Osborne’s savings revolution

Iain Anderson

Normal politics is on hold. Nothing seems more important that the EU Referendum. It is maddening – but it’s spot on.

Whether the UK votes to stay or leave the EU, this will be a turning point in our history not just our politics.

But I’m constantly asked – what happens next? What will it mean for financial sector policy?

To say it all depends on the outcome may seem like a bit of a cop out – but it’s true.

If we vote to leave I think we will be looking at a new Tory leader and new Prime Minister before the end of the year.

And likely a new Chancellor too, so bound together are Cameron and Osborne in their desire to see the UK stay in the EU.

Boris or Gove it maybe. But I have my eyes on the new work and pensions secretary Stephen Crabb – who has been catapulted by Cameron onto centre stage. It reminds me of what Maggie did to promote John Major who rose rapidly to national prominence.

Crabb has a similar backstory to Major – self made and a ‘One Nation’ Tory. He is already marking waves on pensions policy in his Department for Work and Pensions role – something IDS never did.

Whoever is a new Tory leader will look to fire the Government’s agenda but there will be a more immediate priority in their intray. Negotiating with the EU the terms of withdrawal and fighting for access to the single market.

Make no mistake – if you think talking to Government about anything other than the EU is difficult now, it will be nigh on impossible to contemplate anything else if we vote out.

And that’s a real problem. I know Sir Humphrey is already gearing up for this.

Whitehall and Westminster will be dominated by Brexit negotiating and every department will have to get involved. It will take years.

So what if we stay in. Then the PM will stay and Osborne will be still in place – at least for the next two years.

First up will be a Government reshuffle and we can expect to see change at Treasury and DWP.

Awards for loyalty or at least non personal attacks on the PM or the Government’s performance during the referendum will be handed out, but Cameron knows he needs to keep his administration as a broad church across the Tory party.

But I’m expecting to see change.

The first thing is that if Osborne still holds the reigns on financial policy I think the pensions revolution will continue apace. It is in his DNA now.

Safety first was the order of the day before the referendum but don’t underestimate how close Osborne got to unplugging the entire pensions system. He’s still grabbed by the idea of a savings revolution and I think he will want to continue it asap.

The demise of BHS will be the big company pensions story that refuses to go away. Watch for major recommendations for pensions regulatory reform to come from MPs which will be difficult for the Government to ignore. I’m expecting this before the summer break.

A new chief executive at the regulator will repose the question – is the overall regulatory settlement working?

I expect a review of this entire question from Government later in the parliament.

And finally don’t forget digital.

The Government is gripped by digital and any industry that grabs it gets a lot of Government airtime. Finance is starting to do this but is miles behind other sectors.

If the industry wants to open the door to Government it needs to get on with this debate.

If we vote to leave on 23 June the sector might think it will get time to breath. Think again.

A combination of volatile markets and a new wave of UK domestic legislation mimicking EU laws to allow for single market access will put paid to that.

If we stay – more savings revolution to com.

Iain Anderson is executive chairman at Cicero Group

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  1. Julian Stevens 31st May 2016 at 10:18 am

    Imagine that Britain was not already a member of the EU and that the pending referendum was about whether or not we should now join. From our present position of self determination as to how we run our own country, membership of the EU, going forward, would mean:-

    1. Becoming part of a consortium of nations whose economies, with only one exception (Germany), are all in varying degrees of difficulty. That of Greece (which should never have been allowed to join in the first place) is indisputably on life support at the expense of all the others. Additional countries such as Macedonia, Albania, Montenegro, Serbia and Turkey are all keen to join as soon as possible. What do they have to offer? Nothing.

    2. Surrendering control over our borders and, without challenge, having to allow entry to untold numbers of immigrants from other states instead of being able to reject those we consider undesirable.

    3. Surrendering control over our own laws (on many issues, we’d have to start deferring to Strasbourg) and being unable to vote out the politicians in Brussels making laws by which we’d have to abide.

    4. Having to abide by a set of rules for international trading devised by a committee of 27 other countries.

    5. Having to obtain the agreement of those 27 other countries to forge trade deals with key allies such as Australia, New Zealand, China and the USA.

    6. Having to pay hundreds of millions of pounds a week into a central fund, with those 27 other countries deciding how much (or how little) of our own money we’d get back to spend on things such as schools, the NHS and law enforcement.

    7. Submitting to massive amounts of red tape and rules of which we presently have to take no notice at all if they don’t suit us. We’re presently free to adopt those we want and to reject those that we don’t.

    8. Whilst certain trade barriers with other EU nations would be eased for big UK and multi-national businesses, the opposite would apply for smaller businesses.

    Given those considerations, what proportion of the British electorate would be likely to vote to join? Most would vote resoundingly to stay out. And, if they wouldn’t vote to join, then why, in the forthcoming referendum, would they vote to remain?

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