Despite having been Shadow Chancellor for five years, City and political audiences have never been convinced that George Osborne will be David Cameron’s first Chancellor. He has not courted the City in the same vein as Labour’s prawn cocktail circuit, was accused of flip-flopping on banking interventions and has failed to strike a natural rapport with the public. But after a good conference and a strong speech, Osborne ended the week with his reputation enhanced and his claims on the Treasury assured.
He appears more at ease with his brief and well suited to the bad cop, serious business of austerity. He has assembled an effective junior team, with Shadow chief secretary to the Treasury Philip Hammond and Shadow financial secretary to the Treasury Mark Hoban commanding widespread respect across financial services. Critically, we are at last getting some sense of pol-icy and direction and, better still, the industry likes much of what it is hearing.
The creation of a savings culture will be popular with IFAs who can look forward to the promotion of new products, but for the seemingly incongruous assault on child trust funds. Clarity on retirement ages will be welcomed, as will a reversal on Labour’s “tax raid” on pensions which has led to pension shortfalls.
However, much of the interesting debate came at the conference fringe. Reflecting the Treasury team review of personal accounts, and reiterating the savings agenda, Shadow Exchequer secretary David Gauke spoke of a “smaller state, with bigger citizens” and a potential shift from pensions to lifetime savings that allow for greater flexibility. While the Tories conceded their pensions proposals are still not finalised, only seven months before the election, there seems little doubt that the KiwiSaver model is the Tories’ front-runner plan, together with workplace Isas.
Elsewhere, Hoban stressed his commitment to the mutual sector and sought credit union expansion. The retail distribution review, though, was the dog that didn’t bark. Despite much talk of transparency and clear advice, genuine political interest in RDR is low.
Policy is taking shape now under Osborne and his team but, while the electoral clock ticks, much of the detail remains to be settled. The industry has just a small window now to influence manifesto commitments.
Ben Abbotts is head of public affairs at Lansons