Treasury Financial Secretary Ruth Kelly has been chosen as Alan Milburn's chief aide in the run-up to the next general election.
Kelly's work at the Treasury has gained favour with both Chancellor Gordon Brown and Prime Minister Tony Blair and her move to her new role will be seen as a great loss by Brown's supporters.
Kelly was instrumental in bringing Ron Sandler's proposals for a suite of price-cap-ped products sold under a lighter-touch sales regime to the market by bringing them under the stakeholder banner.
She was involved in the Treasury's U-turn on the price cap in June, increasing it from 1 per cent – which has been condemned as unworkable by the industry – to 1.5 per cent.
In her two-year tenure, Kelly worked on relations bet-ween the Treasury and the City and was behind projects such as the child trust fund.
She will be replaced by MP Stephen Timms, who held the Financial Secretary position between 1999 and 2001.
Kelly, who was was appoin-ted Financial Secretary in 2002, was previously Treasury Economic Secretary. Before that, she was Parliamentary Private Secretary to Nick Brown at the Ministry for Agriculture, Fisheries and Food and a member of the Treasury select committee. She worked at the Bank of England in the inflation report division between 1994 and 1996 and was an economics journalist at the Guardian newspaper for four years.
Cicero Consulting director Iain Anderson says: “Her legacy will be the child trust fund. She drove that policy through with a strong intellectual commitment. She has earned respect for making sure that the Government has a more open door to industry. She is always described as having a tremendous grip on the brief.”