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Treasury minister wants to hear IFA grievances on FSA

The Economic Secretary to the Treasury has challenged the financial services industry to provide evidence of any real, tangible and specific grievances that firms may with the FSA.

In his first newspaper interview since taking up the pos- ition in May, Ivan Lewis says he wants to engage in an honest, grown-up dialogue with the industry to discuss any complaints it may have with the regulator.

He says: “It is no good having general whinges, let us have some specific examples where the industry feels that we can regulate better. If I believe there is a genuine grievance, not in the interests of the industry or necessary for consumer protect- ion, then we will act and they have my guarantee I will take all concerns seriously.”

The MP for Bury considers the FSA an excellent regula- tor but says this does not mean that it never makes mistakes. He says no regulator should be arrogant and complacent enough to say it is always right and Lewis wants to hear of specific areas of complaint rather than gen- eric “sniping exercises”.

Moving on to the future of Isas, Lewis says the Isa review will be the centrepiece of the Government’s work on incentives for savings.

He says the review, which is due to produce firm recommendations and a decision by the end of 2006, will be comprehensive, looking at all the components of the product. He says those who are talking in terms of an end to Isas are wrong, as this is not even on the Government’s agenda, with Isas set to enjoy a long future.

On the introduction of real estate investment trusts, Lewis says: “I am very hope- ful that we will be saying something about Reits in the pre-Budget report and I am personally committed to achieving rapid progress in this area.” He says there are still issues and concerns over tax issues but is confident that these can be addressed.

The Treasury recently announced the forthcom- ing publication of a consultation paper on pension regulation, including Sipps.

Lewis is quick to separate this paper from the current controversy on the tax breaks that Sipps will offer after next April, saying the paper was always planned in the run-up to simplification.

Sipps will be allowed to hold residential property after A-Day and Lewis bel- ieves that the number of people this will relate to is minuscule and he claims that the idea it will lead to a distortion of the property market is “complete nonsense”.

He says: “There are many myths around this subject. Is pension simplification going to distort the hous- ing market? The answer is no. We simply think that people have not fully understood the constraints and limitations on what indiv- iduals will be able to do,” adding that there is no way the Government will backtrack on the issue.

After the disappointing recent stakeholder pension business figures from the Association of British Insurers, Lewis says the Government will be looking at mark- eting, communication and promotion. He also says that there is no plan to look at raising the charge cap again.

“We have to look at how we can simplify our message and relate the products to a person’s ambitions and aspirations. It is something that we could do a lot better on, both the Government and the industry,” he says.

In a post-Turner world, Lewis says high-quality professional advisers will be crucial to the future of quality and credible pensions.

He says: “Professional quality advisers will be even more important if we are going to get this system right but we are not going to design a pension system to keep them in work.”

Speaking in general about the pension debate, Lewis attacks what he sees as the “most bogus, disingenuous nonsense” in the press and Opposition comments suggesting that Chancellor Gordon Brown’s so-called “5bn a year raid on pensions” is to blame for the pension problems the country faces.

Lewis says the main culprit is stockmarket fluctuation and, as the pension dilemma is something being faced by many countries, any move by Labour since coming to power in 1997 cannot be the main cause of an impending crisis.

Finally, entering the debate over whether FSA chairman Callum McCarthy’s letter in reply to Prime Minister Tony Blair’s disparaging speech on the regulator should be published, Lewis is steadfast.

He says: “I think it will undermine legitimate Government because if there is a feeling that the letter is destined to be in the public domain it will colour what is in the letter. I think that the PM should be able to correspond with one of the most senior regulators in the world safe in the knowledge it will remain in confidence.”


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