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Should Mark Hoban have stepped in over the RDR?

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After months of trying to pin down former Treasury financial secretary Mark Hoban, Money Marketing finally got to ask him about the impact of the RDR.

I am told Hoban has been expressing concerns to colleagues about the role of financial advice post-RDR.

But when asked last night whether the changes had damaged savings, Hoban disowned the reforms and pointed the finger squarely at the regulator.

He 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.”

In October 2010 backbench Conservative MPs Mark Garnier and Harriett Baldwin forced a debate on the RDR but it made no difference.

The Treasury select committee called for the RDR to delayed by 12 months but it was ignored.

Thousands of advisers lobbied their MPs, newspapers and regulators about the potential damage it could do but it didn’t change a thing.

Now Hoban, the Treasury minister in charge for most of the period in the run-up to the RDR, says he was powerless to act too.

This is a clear demonstration of a dangerous trend to de-politicise key decisions so ministers do not have to take the blame when it all goes wrong.

We saw it last month when Communities secretary Eric Pickles blamed the Environment Agency for the slow help for flood victims. And in financial services it is endemic.

It started with the independence of the Bank of England in 1998 when the monetary policy committee was formed to set interest rates.

Since the crash it has accelerated with the financial policy committee set up to manage financial stability, including significant powers to cap mortgage loan to values.

The FCA now has a judgement-led approach with huge power to ban products it does not like and publish early warning notices against individuals and firms it is investigating.

Long-term decision making is also being outsourced to bureaucratic committees such as the Turner Commission which created auto-enrolment, the Dilnot Commission on long-term care funding reforms or the Independent Commission on Banking.

All these areas created huge changes for the financial services landscape and the public purse but decisions were only rubber-stamped by elected officials.

Some may argue this type of de-politicised process is healthy and a sensible way to build consensus and independent decision-making.

Lord Turner said his committee was crucial to breaking a political “logjam” and giving politicians the space to act in areas such as raising the state pension age.

Political pressure also had a negative impact on encouraging lax banking regulation in the decade up to the crisis.

Clearly day-to-day financial regulation and some long-term decisions are better made by regulators and officials. 

But if major policy decisions on interest rates, financial stability, housing, pension savings, long-term care, retail financial services regulation and banking are left to expert cross-party committees or regulators then how do we hold them to account?

Open political debate and the threat of losing elections is by far the best way of demonstrating accountability and it should not be too diluted by the current worship of technocracy.

When people complain that politicians are “all the same”, this is exactly what they mean. It is time for politicians such as Hoban to start wielding power again and take the consequences of their political choices.

Samuel Dale is political reporter at Money Marketing – you can follow him on Twitter here

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. There is no politics in government anymore. Probably the last person to have any backbone in politics unfortunately died this week. As much as i may have despised and loathed Bob Crow, he did exactly what was intended of him – he looked after his union members and made sure that to the detriment and sacrifice of anyone outside of his union, his members were looked after. You have to admire a man with conviction. He was fighting for the working class man, the man who had nothing, but at the same time was sending his kids to Eton! Shame more politicians don’t accept that what they are doing is a job and you are accept the decisions you make and stick by them.

    But what do we do now? As IFA’s we continue doing what we have always done, look after our clients and maybe take a leaf out of Bob’s book, if you want to pay me I’ll look after you, if you don’t, I equally don’t care. This is what RDR is all about isn’t it? Those who can pay get good service, those who don’t or won’t pay don’t. However, i think there is a strong argument that maybe some IFA’s should look outside the door and maybe work out that there is a good living to be made from the ‘workers’ who pay smaller amounts but alot of small can make a lot.

    Let the politicians blame everyone else and distance themselves from the things that are good in financial services. Let us as IFA’s embrace it and make it work. And then watch them come back and claim the glory.

  2. Hoban could not care less about what happened to consumers post RDR. He should have made it plain that the FSA was accountable to Parliament the body we elect to run the country. The FSA and FCA management are unaccountable to anyone can do what they like with impunity and if it goes wrong join a bank. He like the FSA did not listen to those in the adviser business who tried to tell him and the FSA what the outcome would be it has happened and a great many consumers are now without advice. For him to show concerns is a joke

  3. Samuel
    Excellent piece. I totally agree. Hoban is a spineless fool… Arguably the biggest rule change in FS history and the govt says nothing to do with us. If it isn’t why do we elect them? Dereliction of duty of the highest order.

  4. Incompetent Regulators 12th March 2014 at 4:54 pm

    He was a placed man!

  5. FSA stooge and two faced hypocrite. I hope you enjoy the slide back down the greasy pole Mr Hoban.

  6. FSMA 2000 made it easy for politicians to hide behind the FSA is independent of us’ tag yet still wave the flag when they appeared to do something good.

    “World-class regulator” was the phrase used, I believe, by Gordon Brow, when it suited.

    “Bad regulator” when Northern Rock crashed.

    Politicians want it all ways and apart from the odd few such as Andrew Tyrie, Mark Garnier, Harriet Baldwin, etc they are clueless, spineless and too busy working on their next alibi to intrude when far-reaching and stupid policy decisions are being made by theorists and career bureaucrats.

  7. Should Mark Hoban have stepped in over the RDR?
    I answer to your question– NO.
    Hoban was an arrogant useless inept politician who collected his wages for nothing ( like many of them )
    He should have been sacked for not doing the job he was in, and some other politician promoted in his place who was qualified to do the job.
    I remember his input at the debate in Westminster Hall a motion supported and secured to allow a full 3 hour debate in the main chamber.
    “It is sad to report that when responding to Harriett Baldwin, Mark Hoban did not cover himself in glory. Indeed at one point he compared the current qualifications held by all IFA’s operating in the market place today as only being at the level of those personnel working for McDonalds. This was a truly shameful and dismissive remark to make for which Mr Hoban ought to publish a public apology. Truly this was a reflection of the utter disdain this man holds for the IFAs in this country.”
    (Article Money Management 2010)
    The man should not have been in the job in the first place!

  8. Not me Gov. Or, should that have read; not me whilst I’m in the Gov, Gov? Is there no one who will actually take responsibility these days? This present coalition is still blaming Labour for all our ills (past and current) but when are they actually going to acknowledge they are in power now and its up to them to get it right. RDR is a disaster and the full impact is still not known.

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