Biba warns against Tory plan to fund consumer advice line

Brokers have sounded alarm bells over Tory plans to pay for a proposed new consumer money advice line via a levy on the financial services sector.

The Conservative manifesto, published on Tuesday, said that the party will launch Britain’s first free national financial advice service if it is elected to form a government at next month’s general election.

The service, which is designed to promote greater financial responsibility among consumers, will be paid for by a new ‘social responsibility levy’ on the financial services sector.

The Tory manifesto also confirmed the party’s pledge to scrap the FSA and create a new Consumer Protection Agency.

Biba’s head of compliance and training, Steve White, said brokers would be unhappy if they had to contribute to a new levy hot on the heels of recent above-inflation payment hikes to the Financial Services Compensation Scheme.

He said: “Our members are not going to be interested in funding a financial services levy. We need to keep an eye on that and ensure that we do not end up with something unwelcome dropped on us.”

The manifesto also said that a Conservative government will take forward the Pitt Review’s recommendations to improve flood defences and curb construction in areas at high risk of inundation.

It also said a Tory government will aim to make the UK a more attractive location for multi-national companies by simplifying the controlled foreign companies rules and consulting on moves to ensure that only profits generated in the UK are taxed.

Labour’s manifesto, unveiled on Monday, pledged to give the FSA additional powers to crack down on executive pay in the financial services sector.

Labour’s call to crack down on top pay in the financial sector coincided with this week’s news that the remuneration of RSA’s top three executives rose from £4m in 2008 to £4.6m last year. RSA chief executive Andy Haste’s pay rose 14% to £2.24m.

The Labour manifesto also contained a commitment to require takeovers to command a two-thirds majority of shareholders in order to proceed. And it promised new rules governing how financial products are sold will be introduced with a crackdown on “unfair terms in contracts”.

The Liberal Democrats were due to publish their manifesto after Insurance Times went to press.