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What the minister did next

It is June 11 and your post-election hangover has cleared. You have had

your 60 seconds with the Prime Minister and you are the new Treasury

economic secretary. That&#39s the easy bit done. What happens next?

If you are sensible, you will have read Gerald Kaufman&#39s witty and

illuminating book, How to be a Minister, so you will not be fazed by the

red boxes, private secretaries and requests from trade associations for

meetings (these can be great value, especially if the chairman of the trade

body is a former Cabinet minister, not that I am mentioning any names…).

You now have to make your mark. It is not easy in this particular

position. After a 600-section statute in the last Parliament, you can

forget any notion of follow-up legislation. No Government department can

hog the Parl-iamentary timetable to that extent. You will just have to

concentrate on a few dozen statutory instruments.

Your key task is to establish good working relations with the FSA. It is a

fully fledged statutory body set up by Parliament and it cannot be leant on

to do the Treasury&#39s bidding. Its independence is in the legislation. You

will have to influence, not direct. You next have to establish your

credentials with the financial services sector.

An enviable reputation would be one for listening. Listening is different

from consulting. We now have a rigorous consultation process which allows

everyone to comment on a predetermined agenda. Input prior to the

development of that agenda might lead to better outcomes.

The agenda? The party manifestos put a few stakes in the ground – mainly

regulatory stakes.

The Conservatives are committed to reviewing the operation of the FSA in

2004. But their new minister cannot put his or her feet up as they also

want to deregulate generally and reform annuities.

The LibDems are in favour of polarisation and a review of how the life

insurance industry is regulated. They want mortgage advice within the remit

of the FSA.

Labour has just set out what it has done in the first term. If you want a

better idea of the party&#39s future objectives for the financial services

sector, read Savings and Assets For All, which came out on the Treasury

website just before the election.

It is not just about baby bonds. There is a section on financial products.

Some of it is familiar stuff, concerning transparency and simplicity of

product, but there is a reference to the need for consumers to have access

to advice and information (not just a decision tree and a list of

comparative charges).

That at least gives a peg on which to hang what must be the IFA

community&#39s first input to any new minister – a paper which shows how

advice matters to the consumer and how IFAs can supply it to all shades of

investor; a paper which shows that independent advice is actually the

solution to some of the problems which the parties have identified, not a

problem in itself.


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