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Labouring over financial services

Speculation about a possible snap election is the biggest talking point in Bournemouth after Chancellor Darling’s actions last week to quell the panic over the Northern Rock debacle.

For anyone braving the torrential downpour that hit the seaside town this morning there was a feast of financial fringe events to get their teeth into.

With Otto Thoresen’s Generic Advice review set to report by the end of the year, the issue is high on the political agenda.

The Treasury select committee has already produced a report and a Social Market Foundation/ Provident Financial event this morning looked into the dilemma of “How generic should generic advice be?”

There is some worry in the industry about shouldering the cost of the service- estimated at between £10m and £100m –
which looks set to be split between industry and Government.

Debate focused on the trade off between the amount of money spent and the quality of the service as well as concern about the boundary between regulated and generic advice, with the retail distribution review in the background.

In the same hotel, Treasury select committee chairman John
McFall- fresh from his mauling of Bank of England staff- and new Economic secretary to the Treasury Kitty Ussher debated debt at a Citizens Advice and Finance and Leasing Association event.

McFall let it be known that the industry- as well as the FSA, Bank of England and Treasury- was in his sights regarding Northern Rock.

Last week, the TSC announced it was to call the FSA and Treasury to answer questions about their role in the Northern Rock affair with committee vice chair Michael Fallon branding FSA chairman Callum McCarthy an “official suspect” in the crisis.

Ussher said people were becoming more cautious about what the future will hold which is bound to have a large effect on the financial services industry.

Pension reform and economic competitiveness will be discussed at fringe events over the next few days although the biggest financial talking point could be a fringe event arranged by the Conservative Party.

In an unusual move, Tory Shadow Work and Pensions Secretary Chris Grayling will team up with pension campaigner Ros Altmann to protest about the Government’s handling of compensation to those who lost out due to the collapse of occupational schemes.

It will be interesting to see how many Labour delegates come out to support the cause or come looking for a fight angry the Tories are trampling on their turf.

The meeting will be followed by the now obligatory pensioner strip- the fifth year in a row they have bared all in search of a fairer deal on pensions.

Darling used the start of the conference to confirm arrangements for a 100 per cent guarantee for depositors, up to £100,000, in light of the problems at Northern Rock and measures to ensure in the event of a collapse people will have quick access to their funds.

Polls over the weekend suggest the public has seen not much wrong, and plenty right, with the Government’s handling of the Northern Rock affair which has helped generate fevered speculation over a snap election.

The consensus is that this is still unlikely- with an election having to be called next week to take place before the clocks go back- although events over the next few days and indeed next week in Blackpool could change things.

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