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‘We would like to go back to one or two standard products which building societies and banks offer without brokers taking a cut’

Liberal Democrat Treasury spokesman Lord Oakeshott is all fired up, having just given a speech attacking Conservative Shadow Chancellor George Osborne at the party conference in Bournemouth.

Oakeshott, who is a pension fund manager at Olim Investment Managers, says senior people in the City have told him that Osborne is not fit to be Chancellor and does not understand the difference between a bank and an insurance company. He says: “He just cannot hack it. It is no wonder because he has never had a job outside politics. It is fairly personal but we think that is fair because that is the choice the country has got to make. If you want Vince as Chancellor, then vote Lib Dem.”

One of the main topics of the conference has been LibDem Shadow Chancellor Vince Cable’s announcement of a “mansion tax” – a 0.5 per cent annual levy for people owning houses over £1m. The idea has been heavily criticised, both by LibDem MPs who say they were not consulted, and from sections of the housing industry who say it is unworkable and unfair.

Oakeshott admits it was not presented in the best way but says he was involved in the proposals and supports them. “Now people are screaming about how pensioners with a £2m house will have to pay more. What about the pensioners who do not own a house at all who still have to pay council tax? People need to focus on the overall fairness. Perhaps we should not have presented it quite as much as a new tax but as a reform of unfair council tax. But we think it is absolutely right.”

He believes the Government is “pathetic” for failing to make the nationalised banks lend. “He who pays the piper calls the tune. They should tell them to lend more. That is what the country expects, it is not difficult. They should be setting month-by-month loan targets and challenging them if they do not achieve them.”

He blames this on a difference of opinion between the Treasury, which is concentrating on “taking a quick profit”, and the Prime Minister and Lord Mandelson who are more concerned with trying to get the lending flowing. “There is a paralysis at the heart of Government and we have been exposing it and we will go on exposing it but it is utterly pathetic when you own 70 per cent of the company to pretend you cannot control it.” He believes the Government will ultimately make a profit in selling off the bank stakes but says it should not rush into a sale and must take a medium to long-term view.

Oakeshott argues that very high loan to value mortgages are dangerous and should have serious health warnings. He would like to see lenders offer a standard low-cost first-time-buyer 85 per cent LTV mortgage, almost like “a Tesco value mortgage”.

He is horrified by the extent to which mortgage brokers take a cut of mortgage sales and he wants more good value, direct products to be made available. “We would like to go back to one or two standard products which building societies and banks offer without brokers taking a cut.”

On the subject of pension reform, he says FSA chairman Lord Turner “bottled out” of increasing the state pension in the Turner Commission report. “Turner and his commissioners did not face up to the absolutely critical point that you cannot have a sustainable system of private pensions in Britain while you have still got so much means-testing on the basic state pension. They ducked the hard choice and now we are paying the price so they have got to take some of the responsibility.”

Oakeshott says he was disappointed the Government and the Tories did not back the LibDems’ calls for face-to-face independent financial advice on personal accounts for people over 50 and says they are a high-risk group. “Personal accounts are looking more and more like a looming train crash. For many, many people, it is going to be money down the drain.”

He says the advice landscape is “a total mess” with hundreds of Government and industry initiatives which nobody is aware of and says the Thoresen report was “a diversionary tactic”.

“There is one trusted place where people go for debt and pension advice and it is the Citizens Advice Bureau and that is the one stop shop that we should be supporting. Thoresen is a typical Government diversionary tactic.

“How many people on Bournemouth seafront have heard of Thoresen or most of these things? But they have all heard of the CAB, so for heaven’s sake get behind the CAB and support them and build up a proper network.”


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