The potential EU casualties: Osborne, Altmann and future pension reform

Iain Anderson

Following the UK’s decision to leave the European Union, Money Marketing spoke to Cicero Group executive chairman Iain Anderson about the immediate political ramifications, and what this means for financial services.

Here he sets out why Chancellor George Osborne and pensions minister Ros Altmann may find their positions in Government untenable, and the prospect of an enforced brake on the frenetic pace of pensions reform.

“We are heading into a second election, maybe even this year. Based on the trajectory David Cameron has set out, we will have a new leader in October and we’ll have an early election to seek a mandate to start renegotiations with Brussels.

“If the market turmoil continues for some significant time then an emergency Budget is possible but both the Prime Minister and Chancellor George Osborne are lame ducks. They are in office but don’t really have power, so doing that might be difficult.

“Osborne’s desire to continue the pensions revolution could be gone. My instinct is it will come to a juddering halt. Osborne and Ros Altmann were so committed to it, and they may not be in place in a new government.

“Given the very principled position the pensions minister took on the Remain vote the reforms will come to a stop.

“This is not least because the absolutely top priority for the Government is negotiating a departure from the EU. So much resource will be on that process and the question now is how ministers can get to things like pensions reform and the Financial Advice Market Review.

“We have seen the market’s reaction for quoted companies this morning and the first thing to look at it is how it is moving markets.

“Everything is being marked down, but some stocks more than others. This is a huge shock.

“The most important thing through the campaign and now we are out the other side remains access to the single market.

“That’s the reason many firms are located in London and being able to passport funds and products across Europe has been a key reason to be here as part of the EU. The industry is going to want to talk about passporting going forward.

“Interestingly, we’ve clearly seen Scotland’s Nicola Sturgeon is going to go to Brussels and negotiate with them in order to keep Scotland within the EU. This could be the start of the break up of Britain, it’s a very sad day.

“Practically it might mean many businesses looking to access the single market will be looking at their location options. Dublin will get a bonanza and its possible Edinburgh becomes equally as important within Europe.

“At one point today £350bn were knocked off equities, pensions and savings, and people will see the impact of that – advisers have a big responsibility.”