The phoney war is over and Britain now faces a clear choice at the next general election. The bland platitudes of “One Nation” and ”aspiration nation” from last year’s conference seasons have been blown away with some clear policy choices from all the parties.
Labour pledged to freeze energy prices until 2017, force the sale of land from developers who refuse to build and cut small business rates at the expense of a corporation tax rise.
Prime Minister David Cameron responded by bringing forward the Help to Buy 2 scheme by three months and promising a crack down on benefits for under 25 year olds.
Deputy Prime Minister Nick Clegg positioned himself in the centre ground as a handbrake on Labour’s excessive spending and Conservative ”unfairness”.
Meanwhile, former Ukip financial services spokesman Godfrey Bloom quit the party after calling a room full of women “sluts” and attacking a journalist at its conference. The media fallout overshadowed Ukip policy ideas around increasing the personal allowance and cutting corporation tax.
For advisers and their clients there was plenty to chew over:
1. Pensions tax relief
The Liberal Democrats have long wanted reform of pensions tax relief and now have a strong an ally in the Labour party.
Shadow pensions minister Gregg McClymont told Money Marketing to “watch this space” for upcoming Labour proposals on tax relief.
Labour already proposes cutting top rate relief from 45p to 20p, for those earning over £150,000, but signalled its intentions to go further.
Liberal Democrats called for a reduction in the lifetime tax free allowance to £1m. It will be cut from £1.5m to £1.25m next April.
Another reform option is flat rate relief of 30 per cent, floated by the Pensions Policy Institute and favoured by the Trades Union Congress.
2. Pensions charges
The Office for Fair Trading report into DC pension schemes savaged provider charging structures, slamming the lack of disclosure around areas such as transaction fees.
Liberal Democrat pensions minister Steve Webb struck a tough line on charges but McClymont is pressing him and the industry to go further.
McClymont launched a war of words with the Investment Management Association over their lack of action. He will table more amendments to the Pensions Bill to force extra disclosure requirements.
Conservative MP Harriett Baldwin slammed Nest for its 1.8 per cent up front charge and suggested a flat fee should replace the dual charge approach.
Labour Treasury financial secretary Chris Leslie raised the alarm over rising mortgage fees by insisting they could be the “next big scandal”.
Leslie argues rising arrangement fees are being rolled up and cost borrowers money while expensive exit fees could hurt consumers when interest rates rise on more borrowers change deals.
He also wants more transparency on the impact of fees when they are rolled up by creating annual statements detailing the effects. Brokers and lenders rejected Leslie’s concerns by arguing fees are transparent and well known to customers.
4. Financial regulation
It’s fair to say the issue of excessive financial regulation only came up at the Conservative and Ukip conferences as Labour called for a review of “insignificant” FCA fines.
Institute of Economic Affairs director-general Mark Littlewood urged Ukip to tackle excessive financial regulation while Ukip leader Nigel Farage said the UK had lost control of financial regulations to Brussels.
Treasury select committee chair Andrew Tyrie made similar remarks about the “mindless” data collection by the FCA as he warned he is eyeing the damage from the RDR.
There was also discussion of the EU and financial services with senior Tory politicians calling on the industry to bring forward ideas about what rules should be renegociated.
5. Long-term care funding
Months of intense industry lobbying from advisers may have paid off as care services minister Norman Lamb said he would “strengthen” the role of IFAs in the Care Bill.
It could see councils referring long-term care funders to regulated advisers rather than merely ”independent advice”, which could include charities and the Money Advice Service.
Meanwhile, Labour deputy Lords leader and health spokesman Lord Philip Hunt warned the new system “faces collapse” due to the weight of demand.
Care funders face assessment to start the tab on their £72,000 care costs before Government funding kicks in and Lord Hunt, former NHS Federation chief executive, warns there could be problems.
No fringe event on pensions could begin without the usual platitudes about the brilliance of auto-enrolment changes.
At the Conservative conference in Manchester, the cosy consensus was blasted open by the Federation of Small Businesses which repeated warnings over costs and administration issues.
Despite backbench Conservative support for scrapping auto-enrolment for micro-firms with under 10 staff, the FSB has given up on lobbying for exemption and will no focus on reducing the burden.
Tory MP Baldwin said there were unlikely to be any changes for micro-firms while the DWP says the momentum of reforms makes an exemption.
DWP sources also opened the door to a debate on income protection auto-enrolment by calling on the insurance industry to make the case to Government.