Ros Altmann and her critics

If the Conservatives win the general election then Ros Altmann will become a Tory peer and consumer protection minister in the next Government.

She will conduct a review of financial fairness for consumer including looking at pension charge caps, improved rights for older mortgage borrowers, competition and extending PensionWise beyond retirement.

It raises two key questions. Should there be a consumer protection minister? And should it be Altmann?

Firstly, the job. While publicly many have welcomed the move, privately there are concerns that the job is merely a hollow election trick.

“Pure political window dressing,” says one senior pensions figure. Another agrees that it looks like a political gimmick with little substance.

A third pensions expert says it is an “extraordinary” step to announce a minister before an election and designed purely to win votes.

Governments have a long history of appointing prominent industry figures to the Lords and shoving them into a role. Think of Lord Digby Jones, ex-HSBC chief Stephen Green or Alan Sugar with their business briefs (literally brief as none lasted very long in their roles).

Neither have any of these expert ministers proved hugely successful in roles which require a level of political skill that they are not accustomed too.

So secondly, is Altmann the right person to be a minister?

She is extremely well qualified with a PHD in economics from the London School of Economics and a Kennedy Scholar at Harvard. She also chairs the LSE investment committee and worked at Rothschild for years.

She has also run national campaigns to help savers their money back from workplace schemes when the company went bust – as many as 150,000 individuals benefited from her campaigning. She is an excellent publicist and clearly knows how to get things done. She was awarded a CBE this year for services to pensioners and pension provision.

Since last year she has also been an unpaid Government older workers’ champion working with Lib Dem Steve Webb and Tory Iain Duncan Smith.

But some have questioned her independence as a pensions expert. Alongside campaigning, she was Saga Group director-general between 2010 and 2013 and, more recently, paid by Metlife to write pensions white papers. There is other consultancy work too for various financial services firms.

She is also accused of hypocrisy. For years, she campaigned for the open market option for annuity sales and against single-tied deals.

But when quizzed about Saga Group’s own single-tied deal with Legal & General she defended it. “We are not in the business of shopping around,” she told Money Marketing in 2012.

Consumer champion Which? hit out at the arrangement and, by her own admission, it could cost savers but she promoted it at Saga anyway.

Speaking to Investment Sense in 2013, six months after leaving Saga, she said single-tied deals meant “people could still lose significant amounts of money.”

It is hardly ideal preparation to be consumer protection minister.

Others claim she exaggerates her achievements. On her website she claims to have worked with the Number 10 policy unit under Tony Blair but in 2007 then-work and pensions secretary James Purnell denied it.

“I have great respect for Ros Altmann, but as far as I know she never worked as an adviser to No. 10 or No. 11, as is often said,” he told the House of Commons.

A 2006 FT profile quoted sources accusing Altmann of “slightly over-egging” her role in Government.

Altmann was furious with the claim at the time and has denounced it as a lie because she was critical of Government policy.

For Altmann, there is a personal risk to announcing the job pre-election. If the Conservatives do not take power then she will have no ministerial portfolio – and presumably no peerage – while no longer being independent campaigner.

“How does she deal with things she campaigned for when she now has this role?” says another pensions insider.

A second person says: “She will regret it because it is now absolutely clear that she is not independent. If the Tories don’t win then it will be difficult for her to be taken seriously.”

As a well-known cheerleader for pension freedoms and tradeable annuities she has certainly proven a big help to the Treasury.

Now she is an outed Conservative and already tweeting party lines about “long-term economic plans” and fears about a Miliband Government. No wonder a sceptical Labour party has kept her at arms length from its own policy process

But she has not been in full agreement with this Government. If she does get the job then it will be interesting to see how she reacts to policies she has previously criticised such as the recent reduction to the pensions tax free lifetime allowance from £1.25m to £1m.

Perhaps it is professional jealously of her public profile and achievements that makes her a divisive figure. But despite her critics, Altmann is in touching distance of the biggest job of an eclectic career where she claims she can make a bigger difference to financial fairness.

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3 thoughts on “Ros Altmann and her critics

  • That’s a good summary Sam.

    Problem she will have, if Tories win and she becomes a minister, is ‘collective responsibility’ – the understanding that Government ministers will all publicly support and vote for whatever the Government proposes – even if they don’t actually agree with it.

    So Ros will be expected to vote for and presumably, as a minister, speak for as well – even if it’s not what she’d have proposed for argued for in her previous life.

    (We leave the arguments about the undemocratic nature of the House of Lords and being able to ‘appoint’ someone to a position of legislative power, for another time…!!)

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  • Yes, many of the other expert technocrats appointed to Govt roles have stayed away from being overly party political. But, judging from her Twitter account, Ros seems to embrace trumpeting party lines and being very party political. That’s fine, commendable even to stand up for what she believes, but she’s not independent anymore. Not even a little bit….

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  • I still don’t really understand why there is need for such a position, isn’t consumer protection within financial services kind of a cornerstone of the FCA?…. certainly there appears to be the need for someone to translate language and intent between Treasury, Government and regulator and hopefully Ros will be able to do this with her years of campaigning.

    Frankly what would be more useful would be someone that can actually make a strong case to the chancellor or whoever, to stop messing around with pensions and tax whilst restoring some sense of stability and common sense. So I’d be concerned if this reduces to arguments over how to handle pension transfers, insistent clients, annuity buy-backs and guidance.

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