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's the easy bit done. What happens next?
If you are sensible, you will have read Gerald Kaufman's 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's 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
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's 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
That at least gives a peg on which to hang what must be the IFA
community's 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.