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Nic Cicutti: Hoban doth protest too much


Many years from now, long after Iain Duncan Smith is departed from his ministerial labours, what will the world say about him?

Will he be lauded as the person who – virtually single-handedly – managed to reform the UK’s welfare system and make working for a living worthwhile again for hundreds of thousands of people previously on benefits?

Or will they say that here was a man so committed to his own pre-packaged
right-wing ideology that he sanctioned fitness-for-work tests requiring terminal cancer patients to find a job?

Whatever the verdict, there is not a shadow of a doubt that Duncan Smith will be identified as the principal architect of the DWP’s reorganisation since 2010. He will not be able to claim “it had nothing to do with me, guv” and if he does, no one will believe him.

Some of his erstwhile ministerial colleagues, however, seem to think that
if they whistle long enough people might forget they had anything to do with the momentous reforms that took place on their watch.

Former Treasury financial secretary Mark Hoban is a classic example of this. Last week, as part of an event in Westminster, Hoban was briefly quizzed by Money Marketing reporter Samuel Dale.

When Samuel asked Hoban if the RDR rules had damaged savings, the former minister said: “Let me just correct you; the RDR is nothing to do with me, it was the decision of the independent regulator. I know lots of IFAs hoped I would interfere with the regulator but that is not something I would make a practice of.”

For Samuel, this is part of a process of a recent de-politicisation of key decisions by ministers, who devolve responsibility for taking them to outside agencies. He gives the example of Eric Pickles, who “blamed the Environment Agency for the slow help for flood victims”.

Actually, I thought Pickles was simply acting out his default role as a populist politician trying to pass the buck because he thought he could get away with it, wrongly as it turned out.

Samuel applies the same theory to financial services, giving a series of examples where decisions – from auto-enrolment to funding of long-term care – have been passed on to bodies outside the parliamentary sphere.

I am a huge admirer of Samuel’s incisive writing in Money Marketing but I have to say I disagree with him on this issue.

Not just because major decisions affecting British public life have long been the by-product of inquiries and reports – one need only think of the Beveridge Report, which helped define and create the welfare state Iain Duncan Smith is so busy dismantling.

Then there is the Beeching Report of the early 1960s, which led to the closure of 55 per cent of Britain’s railway stations and 30 per cent of its route miles over the next decade.

What Samuel also does is conflate other changes in regulation he has identified, such as the FCA’s “judgment-led approach, with huge power to ban products it does not like and publish early warning notices against individuals and firms it is investigating”.

Now, some might say these are powers which its predecessor, the FSA, sorely lacked. A classic example of this was PPI, where it took many years of warnings by consumer groups and journalists before the regulator acted.

It also became clear that it was not simply the sales methods of big banks but the critical problems with the product’s very design that led to the biggest financial misselling scandal of the past decade.

As for Hoban himself, the reality is that, like Iain Duncan Smith and his efforts at the DWP, any Teflon-like protestations of innocence with regard to the RDR sit uneasily on his lips – not that they are new, in any case.

For example, when Hoban argued in October 2010 that “the current minimum financial adviser qualification is at the same level as a diploma in shift management offered by McDonald’s”, he prefaced that remark with another: “Whilst the RDR is the responsibility of the Financial Services Authority I fully support its objectives.’”

A semiologist would draw two conclusions from Hoban’s quote: the first is that Hoban was fully in support of the RDR, as can be seen in his speech that day.

Hoban’s quip about McDonald’s related solely to one highly welcome aspect of the FSA’s planned reforms, that of introducing a higher professional qualification level for financial advisers. But it was carefully scripted to achieve maximum effect both with his immediate and a wider public audience.

The second conclusion is that both in 2010 and now, Hoban’s remarks about “ultimate responsibility” show he has always been careful to distinguish between his role as a cheerleader
of the RDR reforms and their application by the FSA.

Could Hoban have had an impact on the RDR reforms if he had really wanted to? Probably, at the margins: regulators will always listen to politicians’ concerns, expressed behind closed doors. But the truth is he did not want to.

Hoban may not have been as passionate about the RDR as Duncan Smith is about the DWP reforms but this was a project he signed up to as a minister because he agreed with it. No amount of argument about the devolution of ministerial powers will change that fact.

Nic Cicutti can be contacted at 



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There are 2 comments at the moment, we would love to hear your opinion too.

  1. You haven’t been negative about financial advisers in this piece?

    Are you unwell?

  2. Mr Hoban has very selected memory, probably like a lot of his colleagues.
    He has a dirty hands, that has ruined this once proud industry.

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