But has Cameron’s extreme makeover impressed financial services companies and what impact will the Tory resurgence have on them?Cicero Consulting director Iain Anderson says the Conservatives are in a better position than they have been for some time and the industry should be taking them much more seriously. The three areas where the Tories are being most vocal and are providing valuable scrutiny of Government policy are inheritance tax changes, pension reforms and home information packs. The shock IHT changes in the Budget look like to be a gift to the Tories, allowing them to attack what they claim to be an unfair tax on Middle England. The changes are at the committee stages of the Finance Bill and a Tory spokesman says the party will be putting all its weight behind amendments to water down or overturn the measures in the first couple of weeks of June before the bill reaches report stage. The changes have allowed the Tories to take on the Government in traditional territory without compromising the drastic repositioning of the party under Cameron’s leadership. But they will have to be wary of falling into the Labour trap of portraying themselves as the same old Tories sticking up for a privileged few, a tactic used by paymaster general Dawn Primarolo in a recent Commons’ debate. Pension reform is another area where the Tories are flexing their muscle and defining policy arguments more effectively than in previous years. Tory Shadow Work and Pensions Secretary Philip Hammond has attacked Government plans for the second state pension to be turned into a flat-rate payment, describing it as a stealth tax for middle-income-earners. Again, the attack will hit the Government hard in a crucial area and demonstrates that the Tories are bringing industry concerns to centre stage of policy debate. Conservative vice-chairman Richard Spring says the strong showing in local elections and recent opinion polls has given the Tories fresh impetus and the subject of financial services is fertile ground for them. Spring says the European Union’s potentially damaging impact on the financial services industry is another main area of attack for the Tories. He says: “We are tackling Government failings on pension reform and IHT and will be challenging them to take a much more assertive view about the way Brussels is controlling much of our financial services policy. “We need to protect the industry from the damage that could be done by oppressive European regulation.” Spring says the criticism of business in recent speeches from Cameron, Shadow Chancellor George Osborne and several Tory frontbenchers is not at odds with the party’s traditional City roots. He says the repositioning of the party’s social agenda is hugely important in making it electable and strong socially responsible policies can go hand in hand with sticking up for financial services. Shadow Financial Secretary to the Treasury Mark Hoban says one of the Tories’ key tasks over the next two years is to understand the financial services sector better and identify changes that could be made. He says the Tories are undertaking extensive research into the industry and a major element of convincing the electorate that the party is fit to govern will be economic competence, one of the few areas where Labour is still ahead in the polls. Hoban says: “The political terms of trade have changed in recent months. These current financial services reforms are long-term decisions and our voice is going to be essential to their implementation.” The Conservatives are in the middle of a wholesale policy review which is due to report with firm economic policies next spring. But the first hints could come with the publication of proposals of its tax reform group, led by Osborne and Thatcherite former MP Michael Forsyth, in late summer or by the party’s autumn conference. The positioning of the party – attacking the business world on anything from the selling of chocolate oranges to BHS bras – appears to have gone down well with voters but does bring up potential arguments within the party that need to be reconciled. One of the fault lines could be the recommendations of John Redwood’s economic competitiveness policy group. A traditional right-winger with previous roles including Shadow Secretary for Deregulation, Redwood is unlikely to come up with recommendations that please Osborne and Cameron. PR firm Lansons public affairs spokesman Martin Koder says the Conservatives are increasingly talking to the industry about radical ideas such as flat taxes and drastically cutting back on regulators and regulations. Koder says: “Cameron is playing a game where he is allowing the policy groups to look at the detail while setting the mood music himself. Come next summer, he is likely to simply cherrypick the most presentable policies.” With Cameron at the helm, issues of social responsibility will take precedence in policy areas, potentially at the expense of more traditional Tory voices such as Redwood’s but there is no doubt that the recent Tory renaissance gives the industry a new opportunity to engage with and influence the policy agenda. Fund name S&P fund 1 yr 3 yr stars % %
What a week for pensions. Not even pictures of John Prescott playing croquet in the garden of his grace and favour home could stop pensions stories from getting top billing in the papers last week.
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