I attended a seminar recently, during which we were informed that the thrust of the Government policies for fin-ancial services is to “close the savings gap”, currently running at around £27bn each year.
For this reason we were told, Sandler, CP121, Myners, Pickering and the Inland Revenue pension simplification review are being undertaken. This is, of course, causing great uncertainty for many of us in this industry and, as a small company, making it impossible for us to expand or plan for the medium and longer term.
The Government can only hope to reduce the savings gap by providing incentives for us all to save and yet they continue to pursue the opposite course.
Incentives must also stretch to those who work in this industry on the coalface who daily face the enormous frustration of a sceptical public, a negative media (they are only interested in sob stories, never success) and a Treasury that is hell-bent on strangling us with red tape, regulation, constant review and change. There can be no other industry in Britain that is so dictated to by bureaucrats as this one.
The last Budget typifies this Government. No mention of savings at all. But we are advised that it is an overriding priority.
Now we have a mountain of negative publicity concerning endowments, with no mention of the millions over the years who have successfully repaid their mortgages, many with cash to spare. The fact that markets can rise as well as fall is never mentioned.
I would like to recommend the following solution to close the savings gap. Bring back some incentives to encourage (particularly the young, they do not know what “saving” means) thrift such as tax relief of some sort on contributions. Tax breaks have been completely abolished other than for pension contributions. Pensions have been seriously undermined in recent years, with the introduction of tax on dividends and negative publicity.
Throw out tiers of regulation and stop trying to be everyone's surrogate parent. Allow this industry to operate again in the real world like any other, so we can plan for the future, take on new personnel and be rewarded for our commitment and risk. The business cycle for the simplest of policies, driven by regulation and form-filling, would be considered insane by any sensible Government that really wants to close the savings gap and see its citizens prosper.
The fact is that consumers hate forms and cannot be bothered with them.
Finally, encourage the media (although it is always in their nature to be negative) to report more positively. There are many millions of examples of success stories that will provide encouragement.
Ernest Noad Director, Ernest Noad & Associates, Bromley, Kent